Factor decomposition analysis of sub-national CO2 emissions in China: A dynamic panel approach

The aim of this paper is to present new evidence of relationship between economic activities and environmental conditions, and accordingly to obtain emission-cutting focus in China. This study decomposes total CO2 emissions into six determinants derived from three net effects of Environmental Kuznets Curve (EKC): scale, technique, and composition. Meanwhile, in views of huge provincial-disparity in economic situation and environmental conditions, we investigate impact factors of CO2 emissions at sub-national level via generalized method of moment estimation. Test including panel unit root, panel cointegration, Sargan and residual auto-correlation is also performed to maintain strict structure and scientific estimation. Results show that CO2 emissions substantially increase over a decade with an upward annual growth rate and a high provincial disparity; sorted in descending order, previous CO2 emissions, coal share, economic growth, and industrial energy consumption are main determinants for accelerated CO2 emissions; EKC with an inverted-U shape relationship between environment quality and income is not verified. Accordingly, emission-reducing policies at sub-national level are concluded. (C) 2015 AIP Publishing LLC.