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Do coal consumption and industrial development increase environmental degradation in China and India?

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Abstract

The present study is aimed to explore the relationship between coal consumption, industrial production, and CO2 emissions in China and India for the period of 1971–2011. The structural break unit root test and cointegrating approach have been applied. The direction of causal relationship between the variables is investigated by applying the VECM Granger causality test. Our results validate the presence of cointegration among the series in both countries. Our results also validate the existence of inverted U-shaped curve between industrial production and CO2 emissions for India, but for China, it is a U-shaped relationship. Coal consumption adds in CO2 emissions. The causality analysis reveals that industrial production and coal consumption Granger cause CO2 emissions in India. In the case of China, the feedback effect exists between coal consumption and CO2 emissions. Due to the importance of coal in China and India, any reduction in coal consumption will negatively affect their industrial value added as well as economic growth.

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Notes

  1. Real industrial value added (constant 2005 US$) indicates value added in mining, manufacturing, construction, electricity, water, and gas. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The origin of the value added is determined by the International Standard Industrial Classification (ISIC). Data are in constant 2005 US dollars.

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Authors and Affiliations

  1. COMSATS Institute of Information Technology, Lahore Campus, Lahore, Pakistan

    Muhammad Shahbaz

  2. LAMIDED, ISG Sousse, University of Sousse, 4000, Sousse, Tunisia

    Sahbi Farhani

  3. Faculty of Economics and Administrative Sciences, Cag University, 33800, Mersin, Turkey

    Ilhan Ozturk

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  1. Muhammad Shahbaz
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  2. Sahbi Farhani
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Correspondence to Ilhan Ozturk.

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Shahbaz, M., Farhani, S. & Ozturk, I. Do coal consumption and industrial development increase environmental degradation in China and India?. Environ Sci Pollut Res 22, 3895–3907 (2015). https://doi.org/10.1007/s11356-014-3613-1

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