Environmental Science and Pollution Research

, Volume 25, Issue 20, pp 19845–19858 | Cite as

Decoupling emissions of greenhouse gas, urbanization, energy and income: analysis from the economy of China

  • Tianqiong Wang
  • Joshua Sunday Riti
  • Yang Shu
Research Article


The adoption and ratification of relevant policies, particularly the household enrolment system metamorphosis in China, led to rising urbanization growth. As the leading developing economy, China has experienced a drastic and rapid increase in the rate of urbanization, energy use, economic growth and greenhouse gas (GHG) pollution for the past 30 years. The knowledge of the dynamic interrelationships among these trends has a plethora of implications ranging from demographic, energy, and environmental and sustainable development policies. This study analyzes the role of urbanization in decoupling GHG emissions, energy, and income in China while considering the critical contribution of energy use. As a contribution to the extant body of literature, the present research introduces a new phenomenon called “the environmental urbanization Kuznets curve” (EUKC), which shows that at the early stage of urbanization, the environment degrades however, after a threshold point the technique effects surface and environmental degradation reduces with rise in urbanization. Applying the autoregressive distributed lag model and the vector error correction model, the paper finds the presence of inverted U-shaped curve between urbanization and GHG emission of CO2, while the same hypothesis cannot be found between income and GHG emission of CO2. Energy use in all the models contributes to GHG emission of CO2. In decoupling greenhouse gas emissions, urbanization, energy, and income, articulated and well-implemented energy and urbanization policies should be considered.


Decoupling greenhouse gas Income Urbanization Energy China 



The authors of this paper acknowledged with thanks the contributions of anonymous reviewers of the manuscript for their valuable editorial comments which significantly improved the manuscript.


  1. Abid M (2015) The close relationship between informal economic growth and carbon emissions in Tunisia since 1980: the (ir) relevance of structural breaks. Sustain Cities Soc 15:11–21Google Scholar
  2. Alkhathlan K, Alam M, Javid M (2012) Carbon dioxide emissions, energy consumption and economic growth in Saudi Arabia: a multivariate cointegration analysis. Br J Econ Manag Trade 2(4):327–339CrossRefGoogle Scholar
  3. Al-mulali U, Sab CNBC, Fereidouni HG (2012) Exploring the bi-directional long run relationship between urbanization, energy consumption, and carbon dioxide emission. Energy 46(1):156–167CrossRefGoogle Scholar
  4. Al-mulali U, Fereidouni HG, Lee JY, Sab CNBC (2013) Exploring the relationship between urbanization, energy consumption, and CO2 emission in MENA countries. Renew Sust Energ Rev 23:107–112CrossRefGoogle Scholar
  5. Al-Mulali U, Weng-Wai C, Sheau-Ting L, Mohammed AH (2015) Investigating the environmental Kuznets curve (EKC) hypothesis by utilizing the ecological footprint as an indicator of environmental degradation. Ecol Indic 48:315–323CrossRefGoogle Scholar
  6. Ang JB (2008) Economic development, pollutant emissions and energy consumption in Malaysia. J Policy Model 30(2):271–278CrossRefGoogle Scholar
  7. Arvin MB, Pradhan RP, Norman NR (2015) Transportation intensity, urbanization, economic growth, and CO2 emissions in the G-20 countries. Util Policy 35:50–66CrossRefGoogle Scholar
  8. Begum RA, Sohag K, Abdullah SMS, Jaafar M (2015) CO2 emissions, energy consumption, economic and population growth in Malaysia. Renew Sust Energ Rev 41:594–601CrossRefGoogle Scholar
  9. Bekhet HA, Al-Smadi RW (2015) Determinants of Jordanian foreign direct investment inflows: bounds testing approach. Econ Model 46:27–35CrossRefGoogle Scholar
  10. Bekhet HA, Al-Smadi RW (2017) Exploring the long-run and short-run elasticities between FDI inflow and its determinants in Jordan. Int J Bus Glob 18(3):337–362CrossRefGoogle Scholar
  11. Bekhet HA, bt Othman NS (2011) Causality analysis among electricity consumption, consumer expenditure, gross domestic product (GDP) and foreign direct investment (FDI): case study of Malaysia. J Econ Int Finance 3(4):228Google Scholar
  12. Bekhet HA, Matar A (2013) FV and causality analysis between stock market prices and their determinates in Jordan. Econ Model 35:508–514CrossRefGoogle Scholar
  13. Bekhet HA, Matar A, Yasmin T (2017) CO2 emissions, energy consumption, economic growth, and financial development in GCC countries: dynamic simultaneous equation models. Renew Sust Energ Rev 70:117–132CrossRefGoogle Scholar
  14. Brown RL, Durbin J, Evans JM (1975) Techniques for testing the constancy of regression relationships over time. J R Stat Soc Ser B Methodol: 149–192Google Scholar
  15. Chang CC (2010) A multivariate causality test of carbon dioxide emissions, energy consumption and economic growth in China. Appl Energy 87(11):3533–3537CrossRefGoogle Scholar
  16. Chen PY, Chen ST, Hsu CS, Chen CC (2016) Modeling the global relationships among economic growth, energy consumption and CO2 emissions. Renew Sust Energ Rev 65:420–431CrossRefGoogle Scholar
  17. Cheng C (2013) Dynamic quantitative analysis on Chinese urbanization and growth of service sector. LISS 2012, Springer: 663–670Google Scholar
  18. Clemente J, Montañés A, Reyes M (1998) Testing for a unit root in variables with a double change in the mean. Econ Lett 59(2):175–182CrossRefGoogle Scholar
  19. Dejong DN, Nankervis JC, Savin NE (1992) Integration versus trend stationarity in time series. Econometrica 60:423–433CrossRefGoogle Scholar
  20. Dickey DA, Fuller WA (1981) Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica 49:1057–1079CrossRefGoogle Scholar
  21. Dietz T, Rosa EA (1994) Rethinking the environmental impacts of population, affluence, and technology. Hum Ecol Rev 1(2):277–300Google Scholar
  22. Dinda S, Coondoo D (2006) Income and emission: a panel data-based cointegration analysis. Ecol Econ 57(2):167–181CrossRefGoogle Scholar
  23. Dogan E, Inglesi-Lotz R (2017) Analyzing the effects of real income and biomass energy consumption on carbon dioxide (CO2) emissions: empirical evidence from the panel of biomass-consuming countries. Energy 138:721–727CrossRefGoogle Scholar
  24. Dogan E, Ozturk I (2017) The influence of renewable and non-renewable energy consumption and real income on CO2 emissions in the USA: evidence from structural break tests. Environ Sci Pollut Res 24(11):10846–10854CrossRefGoogle Scholar
  25. Dogan E, Seker F (2016a) Determinants of CO2 emissions in the European Union: the role of renewable and non-renewable energy. Renew Energy 94:429–439CrossRefGoogle Scholar
  26. Dogan E, Seker F (2016b) An investigation on the determinants of carbon emissions for OECD countries: empirical evidence from panel models robust to heterogeneity and cross-sectional dependence. Environ Sci Pollut Res 23(14):14646–14655CrossRefGoogle Scholar
  27. Dogan E, Turkekul B (2016) CO2 emissions, real output, energy consumption, trade, urbanization and financial development: testing the EKC hypothesis for the USA. Environ Sci Pollut Res 23(2):1203–1213CrossRefGoogle Scholar
  28. Dogan E, Seker F, Bulbul S (2017) Investigating the impacts of energy consumption, real GDP, tourism and trade on CO2 emissions by accounting for cross-sectional dependence: a panel study of OECD countries. Curr Issue Tour 20(16):1701–1719CrossRefGoogle Scholar
  29. Elliott GR, Thomas J, Stock JH (1996) Efficient tests for an autoregressive unit root. Econometrica 64:813–836CrossRefGoogle Scholar
  30. Engle RF, Granger CW (1987) Co-integration and error correction: representation, estimation, and testing. Econometrica 55:251–276CrossRefGoogle Scholar
  31. Farhani S, Shahbaz M, Sbia R, Chaibi A (2014) What does MENA region initially need: grow output or mitigate CO2 emissions? Econ Model 38:270–281CrossRefGoogle Scholar
  32. Ghosh S (2010) Examining carbon emissions economic growth nexus for India: a multivariate cointegration approach. Energy Policy 38(6):3008–3014CrossRefGoogle Scholar
  33. Ghosh S, Kanjilal K (2014) Long-term equilibrium relationship between urbanization, energy consumption and economic activity: empirical evidence from India. Energy 66:324–331CrossRefGoogle Scholar
  34. Global Carbon Project, 2015. Global carbon atlas 2015. Accessed 29 April, 2017
  35. Govindaraju VC, Tang CF (2013) The dynamic links between CO2 emissions, economic growth and coal consumption in China and India. Appl Energy 104:310–318CrossRefGoogle Scholar
  36. Grossman GM, Krueger AB (1991) Environmental impacts of a North American free trade agreement, National Bureau of Economic ResearchGoogle Scholar
  37. Halicioglu F (2009) An econometric study of CO 2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy 37(3):1156–1164CrossRefGoogle Scholar
  38. Han X, Wu PL, Dong WL (2012) An analysis on interaction mechanism of urbanization and industrial structure evolution in Shandong, China. Procedia Environ Sci 13:1291–1300CrossRefGoogle Scholar
  39. He Z, Xu S, Shen W, Long R, Chen H (2017) Impact of urbanization on energy related CO2 emission at different development levels: regional difference in China based on panel estimation. J Clean Prod 140:1719–1730CrossRefGoogle Scholar
  40. Hondroyiannis G, Lolos S, Papapetrou E (2002) Energy consumption and economic growth: assessing the evidence from Greece. Energy Econ 24(4):319–336CrossRefGoogle Scholar
  41. Hossain MS (2011) Panel estimation for CO2 emissions, energy consumption, economic growth, trade openness and urbanization of newly industrialized countries. Energy Policy 39(11):6991–6999CrossRefGoogle Scholar
  42. Hossain S (2012) An econometric analysis for CO2 emissions, energy consumption, economic growth, foreign trade and urbanization of Japan.
  43. Inglesi-Lotz R, Dogan E (2018) The role of renewable versus non-renewable energy to the level of CO2 emissions a panel analysis of sub-Saharan Africa’s Βig 10 electricity generators. Renew Energy 123:36–43CrossRefGoogle Scholar
  44. IPCC (Intergovernmental Panel on Climate Change) (2007) Climate change 2007: the physical science basis. Cambridge Press, New YorkCrossRefGoogle Scholar
  45. Ivy-Yap LL, Bekhet HA (2015) Examining the feedback response of residential electricity consumption towards changes in its determinants: evidence from Malaysia. Int J Energy Econ Policy 5(3):772–781Google Scholar
  46. Ivy-Yap LL, Bekhet HA (2016) Modelling the causal linkages among residential electricity consumption, gross domestic product, price of electricity, price of electric appliances, population and foreign direct investment in Malaysia. Int J Energy Technol Policy 12(1):41–59CrossRefGoogle Scholar
  47. Jalil A, Mahmud SF (2009) Environment Kuznets curve for CO2 emissions: a cointegration analysis for China. Energy Policy 37(12):5167–5172CrossRefGoogle Scholar
  48. Johansen S, Juselius K (1990) Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxf Bull Econ Stat 52(2):169–210CrossRefGoogle Scholar
  49. Kasman A, Duman YS (2015) CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: a panel data analysis. Econ Model 44:97–103CrossRefGoogle Scholar
  50. Liu Y (2009) Exploring the relationship between urbanization and energy consumption in China using ARDL (autoregressive distributed lag) and FDM (factor decomposition model). Energy 34(11):1846–1854CrossRefGoogle Scholar
  51. Liu TY, Su CW, Jiang XZ (2015) Is economic growth improving urbanization? A cross-regional study of China. Urban Stud 52(10):1883–1898CrossRefGoogle Scholar
  52. Liu Y, Yan B, Zhou Y (2016) Urbanization, economic growth, and carbon dioxide emissions in China: a panel cointegration and causality analysis. J Geogr Sci 26(2):131–152CrossRefGoogle Scholar
  53. Long X, Naminse EY, Du J, Zhuang J (2015) Nonrenewable energy, renewable energy, carbon dioxide emissions and economic growth in China from 1952 to 2012. Renew Sust Energ Rev 52:680–688CrossRefGoogle Scholar
  54. Lütkepohl H (2011) Vector autoregressive models. Springer, Berlin Heidelberg, pp 1645–1647Google Scholar
  55. Martínez-Zarzoso I, Maruotti A (2011) The impact of urbanization on CO2 emissions: evidence from developing countries. Ecol Econ 70(7):1344–1353CrossRefGoogle Scholar
  56. Masih AM, Masih R (1996) Energy consumption, real income and temporal causality: results from a multi-country study based on cointegration and error-correction modelling techniques. Energy Econ 18(3):165–183CrossRefGoogle Scholar
  57. Mehrara M, Sharzei G, Mohaghegh M (2011) The relationship between health expenditure and environmental quality in developing countries. J Health Adm 14(46)Google Scholar
  58. Menyah K, Wolde-Rufael Y (2010) Energy consumption, pollutant emissions and economic growth in South Africa. Energy Econ 32(6):1374–1382CrossRefGoogle Scholar
  59. Miao L (2017) Examining the impact factors of urban residential energy consumption and CO2 emissions in China–evidence from city-level data. Ecol Indic 73:29–37CrossRefGoogle Scholar
  60. Narayan PK (2005) The saving and investment nexus for China: evidence from cointegration tests. Appl Econ 37(17):1979–1990CrossRefGoogle Scholar
  61. Nasir M, Rehman FU (2011) Environmental Kuznets curve for carbon emissions in Pakistan: an empirical investigation. Energy Policy 39(3):1857–1864CrossRefGoogle Scholar
  62. National Bureau of Statistics of the People’s Republic of China (2015a) China statistical yearbook 2015. China Statistics Press, BeijingGoogle Scholar
  63. National Bureau of Statistics of the People’s Republic of China (2015b) New China in 65 years. China Statistics Press, BeijingGoogle Scholar
  64. Ng S, Perron P (2001) Lag length selection and the construction of unit root tests with good size and power. Econometrica 69(6):1519–1554CrossRefGoogle Scholar
  65. Ozturk I, Acaravci A (2013) The long-run and causal analysis of energy, growth, openness and financial development on carbon emissions in Turkey. Energy Econ 36:262–267CrossRefGoogle Scholar
  66. Pao HT, Tsai CM (2010) CO2 emissions, energy consumption and economic growth in BRIC countries. Energy Policy 38(12):7850–7860CrossRefGoogle Scholar
  67. Payne JE (2010) A survey of the electricity consumption-growth literature. Appl Energy 87(3):723–731CrossRefGoogle Scholar
  68. Perron P, Volgelsang TJ (1992) Nonstationarity and level shifts with an application to purchasing power parity. J Bus Econ Stat 10(3):301–320Google Scholar
  69. Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econ 16(3):289–326CrossRefGoogle Scholar
  70. Phillips PC, Perron P (1988) Testing for a unit root in time series regression. Biometrika 75(2):335–346CrossRefGoogle Scholar
  71. Poumanyvong P, Kaneko S (2010) Does urbanization lead to less energy use and lower CO2 emissions? A cross-country analysis. Ecol Econ 70(2):434–444CrossRefGoogle Scholar
  72. Pradhan RP, Arvin MB, Norman NR, Bele SK (2014) Economic growth and the development of telecommunications infrastructure in the G-20 countries: a panel-VAR approach. Telecommun Policy 38(7):634–649CrossRefGoogle Scholar
  73. Richmond AK, Kaufmann RK (2006) Is there a turning point in the relationship between income and energy use and/or carbon emissions? Ecol Econ 56(2):176–189CrossRefGoogle Scholar
  74. Riti JS, Shu Y (2016) Renewable energy, energy efficiency, and eco-friendly environment (R-E5) in Nigeria. Energy Sustain Soc 6(1):1–16Google Scholar
  75. Riti JS, Shu Y, Song D, Kamah M (2017a) The contribution of energy use and financial development by source in climate change mitigation process: a global empirical perspective. J Clean Prod 148:882–894CrossRefGoogle Scholar
  76. Riti JS, Deyong S, Shu Y, Kamah M (2017b) Decoupling CO2 emission and economic growth in China: is there consistency in estimation results in analyzing environmental Kuznets curve? J Clean Prod 166:1448–1461CrossRefGoogle Scholar
  77. Riti JS, Deyong S, Shu Y, Kamah M, Atabani AA (2018) Does renewable energy ensure environmental quality in favour of economic growth? Empirical evidence from China’s renewable development Quality and Quantity (International Journal of Methodology),
  78. Saboori B, Sulaiman J (2013a) CO2 emissions, energy consumption and economic growth in Association of Southeast Asian Nations (ASEAN) countries: a cointegration approach. Energy 55:813–822CrossRefGoogle Scholar
  79. Saboori B, Sulaiman J (2013b) Environmental degradation, economic growth and energy consumption: evidence of the environmental Kuznets curve in Malaysia. Energy Policy 60:892–905CrossRefGoogle Scholar
  80. Sadorsky P (2014) The effect of urbanization on CO2 emissions in emerging economies. Energy Econ 41:147–153CrossRefGoogle Scholar
  81. Salim RA, Shafiei S (2014) Urbanization and renewable and non-renewable energy consumption in OECD countries: an empirical analysis. Econ Model 38:581–591CrossRefGoogle Scholar
  82. Shahbaz M, Lean HH (2012) Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia. Energy Policy 40:473–479CrossRefGoogle Scholar
  83. Shahbaz M, Loganathan N, Muzaffar AT, Ahmed K, Jabran MA (2016) How urbanization affects CO2 emissions in Malaysia? The application of STIRPAT model. Renew Sust Energ Rev 57:83–93CrossRefGoogle Scholar
  84. Sodri A, Garniwa I (2016) Attractnesia. Procedia Soc Behav Sci 227:728–737CrossRefGoogle Scholar
  85. Solarin SA (2014) Tourist arrivals and macroeconomic determinants of CO2 emissions in Malaysia. Anatolia 25(2):228–241CrossRefGoogle Scholar
  86. Solarin SA, Shahbaz M (2013) Trivariate causality between economic growth, urbanisation and electricity consumption in Angola: cointegration and causality analysis. Energy Policy 60:876–884CrossRefGoogle Scholar
  87. Soytas U, Sari R (2006) Can China contribute more to the fight against global warming? J Policy Model 28(8):837–846CrossRefGoogle Scholar
  88. Soytas U, Sari R (2009) Energy consumption, economic growth, and carbon emissions: challenges faced by an EU candidate member. Ecol Econ 68(6):1667–1675CrossRefGoogle Scholar
  89. Soytas U, Sari R, Ewing BT (2007) Energy consumption, income, and carbon emissions in the United States. Ecol Econ 62(3):482–489CrossRefGoogle Scholar
  90. Stock JH, Watson MW (2001) Vector autoregressions. J Econ Perspect 15(4):101–115CrossRefGoogle Scholar
  91. Sugiawan Y, Managi S (2016) The environmental Kuznets curve in Indonesia: exploring the potential of renewable energy. Energy Policy 98:187–198CrossRefGoogle Scholar
  92. Wang Z, Zhang B, Yin J (2012) Determinants of the increased CO2 emission and adaption strategy in Chinese energy-intensive industry. Nat Hazards 62(1):17–30CrossRefGoogle Scholar
  93. Wang Y, Zhang X, Kubota J, Zhu X, Lu G (2015) A semi-parametric panel data analysis on the urbanization-carbon emissions nexus for OECD countries. Renew Sust Energ Rev 48:704–709CrossRefGoogle Scholar
  94. Wang Y, Chen L, Kubota J (2016a) The relationship between urbanization, energy use and carbon emissions: evidence from a panel of Association of Southeast Asian Nations (ASEAN) countries. J Clean Prod 112:1368–1374CrossRefGoogle Scholar
  95. Wang Y, Li L, Kubota J, Han R, Zhu X, Lu G (2016b) Does urbanization lead to more carbon emission? Evidence from a panel of BRICS countries. Appl Energy 168:375–380CrossRefGoogle Scholar
  96. World Bank (2009) 2015. Data bank: China. Accessed 29 April, 2017
  97. York R, Rosa E, Dietz T (2005) The ecological footprint intensity of national economies. J Ind Econ 2005(8):139–154Google Scholar
  98. Zhang H (2016) Exploring the impact of environmental regulation on economic growth, energy use, and CO2 emissions nexus in China. Nat Hazards 84(1):213–231CrossRefGoogle Scholar
  99. Zhang YJ, Da YB (2013) Decomposing the changes of energy-related carbon emissions in China: evidence from the PDA approach. Nat Hazards 69(1):1109–1122CrossRefGoogle Scholar
  100. Zhang C, Lin Y (2012) Panel estimation for urbanization, energy consumption and CO2 emissions: a regional analysis in China. Energy Policy 49:488–498CrossRefGoogle Scholar
  101. Zhang YJ, Liu Z, Zhang H, Tan TD (2014) The impact of economic growth, industrial structure and urbanization on carbon emission intensity in China. Nat Hazards 73(2):579–595CrossRefGoogle Scholar
  102. Zhu J (2016) Making urbanisation compact and equal: integrating rural villages into urban communities in Kunshan, China. Urban Stud: p. 0042098016643455Google Scholar
  103. Zhu HM, You WH, Zeng ZF (2012) Urbanization and CO2 emissions: a semi-parametric panel data analysis. Econ Lett 117(3):848–850CrossRefGoogle Scholar
  104. Zi C, Jie W, Hong-Bo C (2016) CO2 emissions and urbanization correlation in China based on threshold analysis. Ecol Indic 61:193–201CrossRefGoogle Scholar
  105. Zivot E, Andrews D (1992) Further evidence of great crash, the oil price shock and unit root hypothesis. J Bus Econ Stat 10:251–270Google Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  • Tianqiong Wang
    • 1
  • Joshua Sunday Riti
    • 1
    • 2
  • Yang Shu
    • 1
  1. 1.School of EconomicsHuazhong University of Science and TechnologyWuhanPeople’s Republic of China
  2. 2.Department of Economics, Faculty of Social SciencesUniversity of JosJosNigeria

Personalised recommendations