An Empirical Analysis of the Role of China's Exports on CO2 Emissions
China is one of the world’s most rapidly growing countries and the largest consumer of energy in the world. As a result, China’s pollution emissions almost doubled from 2002 to 2007, and in 2006 it surpassed the United States to become the world’s top carbon dioxide emitter. Understanding the sources of emissions is essential towards designing policies aimed at curbing carbon emissions in China. The surge in China’s exports has been partially blamed for this increase in emissions. To understand the sources of emissions, this study uses a vector autoregression model to examine the relationship among exports, CO2 emissions, coal consumption and trade openness in China for the years 1970–2010. The study uses a modified version of Granger Causality developed by Toda and Yamamoto . The main findings within the study indicate: (1) Granger Causality running from exports to emissions; (2) Granger Causality running from coal consumption to exports; and (3) GDP determines future variability in exports and CO2 emissions. Results suggest that governmental policies aimed at controlling coal consumption could affect CO2 emissions and exports. Results from this study should assist in formulating policies to mitigate both CO2 emissions and coal consumption.
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