Nexus among Energy Consumption, Economic Growth, Urbanization and Carbon Emissions: Heterogeneous Panel Evidence Considering China’s Regional Differences

Abstract

This article examines the relation among carbon emissions, energy consumption, economic growth and urbanization in four panels: national level, developed areas, medium developed areas, and underdeveloped areas, which fully considers the differences across Chinese provinces. Due to the heterogeneity among Chinese provincial panels, the heterogeneous panel analysis technique is used, which includes heterogeneous panel estimation based on dynamic ordinary least squares (DOLS) and fully modified least squares (FMOLS), and the heterogeneous panel Granger test based on Dumitrescu and Hurlin is also used. The empirical results indicate that there are long-term equilibrium relationships between carbon emissions, GDP, energy consumption structure and urbanization rate in the four panels. GDP and energy consumption structure had obvious impacts on carbon emissions in all panels, but the urbanization rate significantly affected carbon emissions only in the national and medium developed areas. The heterogeneous Granger causality test reveals that the relationship between carbon emissions and various influencing factors in different regions varies. Finally, according to the empirical research results, policy implications of reducing carbon emissions in different regions were proposed.

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