CO2 emissions and economic growth nexus in China: A cointegration analysis of the four-stage environmental Kuznets Curve

This research puts forward four-stage EKC hypothesis based on the traditional EKC theory (two stages), and also checks the hypothesis by investigating the relationships among CO2 emissions, energy consumption and economic growth with a cubic model in logarithm form based on the panel data for 29 provinces in China over the period 1995-2010. The empirical tests find some evidences for the existence of the four-stage EKC for CO2 emissions in China. The long-run cointegrated relationships among the three variables have been found in our empirical results. The regression results find a maxima turning point of the four-stage EKC between economic growth and CO2 emissions. The causality results show that there exist two bidirectional causalities between energy consumption and CO2 emissions, and also between economic growth and energy consumption. Moreover, there is a Granger causality running from CO2 emissions to economic growth. Some policy implications of the theoretical and empirical analysis results are proposed at last.