New insights into an old issue: exploring the nexus between economic growth and CO 2 emissions in China
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RESEARCH ARTICLE
New insights into an old issue: exploring the nexus between economic growth and CO2 emissions in China Dervis Kirikkaleli 1 Received: 26 May 2020 / Accepted: 9 July 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract It is globally acceptable that carbon dioxide (CO2) emissions are one of the greenhouse gases are considered the main factor influencing global warming and environmental degradation. The present study focuses on China, the world’s largest carbon emitter. The study aims to capture the time-frequency dependency of economic growth and CO2 emissions in China for the time period 1950–2016 using a wavelet coherence approach, which allows us to investigate both the long-run and short-run causal links of the estimated variables. In order to capture the long-run and causal linkage between economic growth and CO2 emissions, the study employs Maki cointegration, wavelet coherence, Toda-Yamamoto causality, Fourier Toda-Yamamoto causality, and nonparametric Granger causality tests. The findings of this study reveal that (i) there is a significant vulnerability between economic growth and CO2 emissions throughout the 2000s both the short-term and medium-term; (ii) there is long-run cointegration linkage between economic growth and CO2 emissions in China; (iii) economic growth in China has an important power for predicting CO2 emissions over the selected study period, especially in the short-term and medium-term; and (iv) it was observed that there is positive correlation between economic growth during the 1980s and 1990s in the short-term only. The outcome of the Toda-Yamamoto causality, Fourier Toda-Yamamoto causality, and nonparametric Granger causality tests underlines that economic growth is a robust policy variable for predicting CO2 emissions in China. Keywords Economic growth . CO2 emissions . China . Wavelet coherence
Introduction It is globally acceptable that CO2 emissions are one of the greenhouse gases and considered the main factor influencing global warming and environmental degradation. Environmental sustainability and climate changes are the main environmental issues in the world agenda, and they have attracted researchers to explore the nexus between economic growth and CO2 emissions. It is known that the burning of fossil fuel, coal, oil, and natural gas is the reason behind rising CO2 emissions and thus the main reason behind
Responsible Editor: Nicholas Apergis * Dervis Kirikkaleli [email protected] 1
Department of Banking and Finance, Faculty of Economic and Administrative Sciences, European University of Lefke, Lefke, Northern Cyprus, TR-10 Mersin, Turkey
the deterioration of natural environment. Similarly, Mardani et al. (2019) stated that despite the positive effect of economic growth on leaving standards for both the developed and developing economies, tripling the world economy in the last four decades is blamed for rising CO2 emissions and decreasing natural resources. Nowadays, China is the world’s largest carbon emitter in the world. In
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