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The Impact of Globalization on CO2 Emissions in China

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  • Shahbaz, Muhammad
  • Khan, Saleheen
  • Ali, Amjad
  • Bhattacharya, Mita

Abstract

This paper examines the Environmental Kuznets Curve (EKC) hypothesis for China in the presence of globalization. We have applied Bayer and Hanck combined cointegration test as well as the ARDL bounds testing approach to cointegration by accommodating structural breaks in the series. The causal relationship among the variables is investigated by applying the VECM causality framework. The study covers the period of 1970-2012. The results confirm the presence of cointegration among the variables. Furthermore, the EKC hypothesis is valid in China both in short-and-long runs. Coal consumption increases CO2 emissions significantly. The overall index and sub-indices of globalization indicate that globalization in China is decreasing CO2 emissions. The causality results reveal that economic growth causes CO2 emissions confirming the existence of the EKC hypothesis. The feedback effect exists between coal consumption and CO2 emissions. CO2 emissions Granger causes globalization (social, economic and political).

Suggested Citation

  • Shahbaz, Muhammad & Khan, Saleheen & Ali, Amjad & Bhattacharya, Mita, 2015. "The Impact of Globalization on CO2 Emissions in China," MPRA Paper 64450, University Library of Munich, Germany, revised 15 May 2015.
    • Handle: RePEc:pra:mprapa:64450
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    Keywords

    China; Coal Consumption; Globalization; CO2 emissions;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • A10 - General Economics and Teaching - - General Economics - - - General

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