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The relationship between urbanization, income growth and carbon dioxide emissions and the policy implications for China: a cointegrated vector error correction (VEC) analysis

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Abstract

China is in a phase of rapid urbanization and economic development; in addition, the country’s carbon dioxide (CO2) emissions are increasing. Using a multivariate vector error correction model, this paper investigates the relationship between urbanization, income growth and CO2 emissions in China. The empirical evidence shows that the three variables are cointegrated, indicating a long-term relationship among urbanization, income growth and CO2 emissions. Moreover, a Granger causality test reveals that urbanization is the reason for income growth in China. There is also evidence that both urbanization and income growth lead to CO2 emissions. Hence, authorities should pay more attention to mitigating the negative effects on the environment when developing and implementing policies that promote urbanization and income growth. However, CO2 emissions do not cause changes in income and urbanization in China. Therefore, China should enforce stricter policies for reducing CO2 emissions.

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Acknowledgements

This research was financially supported by the Natural Sciences Foundation of China (NSFC) (71203203), the MOE project of Humanities and Social Sciences (12YJCZH057), the Beijing Higher Education Young Elite Teacher Project (YETP0667), the Fundamental Research Funds for the Central Universities (2652015149 and 2652016134) and the Project from the Strategic Research Center of Oil and Gas Resources of MLR of China (Grant No. 1A15YQKYQ0112).

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    Authors and Affiliations

    1. School of Humanities and Economic Management, China University of Geosciences (Beijing), Beijing, 100083, China

      Xiangrong Ma, Jianping Ge & Wei Wang

    2. Key Laboratory of Carrying Capacity Assessment for Resource and Environment, Ministry of Land and Resources, Beijing, 100083, China

      Jianping Ge & Wei Wang

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    1. Xiangrong Ma
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    Correspondence to Jianping Ge.

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    Xiangrong Ma and Jianping Ge have contributed equally to this study and shared first authorship.

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    Ma, X., Ge, J. & Wang, W. The relationship between urbanization, income growth and carbon dioxide emissions and the policy implications for China: a cointegrated vector error correction (VEC) analysis. Nat Hazards 87, 1017–1033 (2017). https://doi.org/10.1007/s11069-017-2807-5

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