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Does electricity consumption and globalization increase pollutant emissions? Implications for environmental sustainability target for China

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Abstract

Giving that People’s Republic of China is one of the two new frontiers of globalization, the country has continued to contend with the bottleneck of sustaining its economic growth amidst environmental hiccups arising from the drawbacks of globalization and energy consumption. By investigating the challenges of the country’s drive toward environmental sustainability, the present study offers a new perspective on the role of electricity consumption and economic growth in a carbon-income function setting. This study also incorporates globalization into CO2 emissions equation for the experimental period of 1970–2014. Stationarity properties were ascertained by the Zivot and Andrew unit root test under a single structural break. Subsequently, the recent and novel combined cointegration test of Bayer and Hanck (2013) in conjunction with the Pesaran bounds testing approach is used to establish a cointegration relationship among the selected variables. Finally, the modified Wald test of the Toda-Yamamoto Granger causality test is employed to detect the direction of causality flows among the variables. Empirical piece of evidence finds a statistically positive correlation between electricity consumption and economic growth as seen in the long-run regression. This result is also affirmed by the Granger causality test. The test corroborates with the electricity-induced growth hypothesis in the case of China. However, there is an environmental trade-off, as more electricity consumptions spur increased carbon dioxide emissions (CO2). Our study finds empirical support that globalization reduced pollutant emissions in both the short and long run over our sampled period. Based on these results and outcomes, several policy prescriptions on the energy-income and environment nexus are renders for policymakers. Among such policy recommendations are (a) the need for the diversification of the Chinese energy mix to cleaner energy sources and renewables and (b) the need for decarbonization and adoption of carbon capturing and storage technologies.

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Notes

  1. The United Nations Framework Convention on Climate Change (UNFCC) is the United Nations organization that is saddle with the global climate actions. Further information on UNFCCC is available at https://unfccc.int/.

  2. The Paris Agreement is the United Nations Framework Convention on Climate Change of 2015. More details relating to the Paris Agreement of 2015 are available at: https://unfccc.int/process/conferences/pastconferences/ paris-climate-change-conference-november-2015/ Paris-agreement.

  3. For clarity sake to avoid repetition the use of China refers to People’s Republic of China

  4. The Bayer and Hanck cointegration test is preferred to other forms of cointegration tests, since it combines several individual cointegration test outcomes to generate a more robust comovement outcomes.

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Authors and Affiliations

  1. Research Department, Central Bank of Nigeria, Abuja, Nigeria

    Seyi Saint Akadiri

  2. Faculty of Economics, and Administrative and Social Sciences, Istanbul Gelisim University, Istanbul, Turkey

    Andrew Adewale Alola

  3. Department of Financial Technologies, South Ural State University, Chelyabinsk, Russia

    Andrew Adewale Alola

  4. Faculty of Economics, Administration and Social Science, Istanbul Gelisim University, Istanbul, Turkey

    Festus Victor Bekun

  5. Department of Audit, South Ural State University, Chelyabinsk, Russia

    Festus Victor Bekun

  6. Faculty of Business and Economics, Department of Economics, Famagusta, Eastern Mediterranean University, via Mersin 10, Famagusta, North Cyprus, Turkey

    Mfonobong Udom Etokakpan

  7. Economics Department, Babcock University, Ilishan-Remo, Ogun State, Nigeria

    Mfonobong Udom Etokakpan

Authors
  1. Seyi Saint Akadiri
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  2. Andrew Adewale Alola
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  3. Festus Victor Bekun
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  4. Mfonobong Udom Etokakpan
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Correspondence to Andrew Adewale Alola.

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Akadiri, S.S., Alola, A.A., Bekun, F.V. et al. Does electricity consumption and globalization increase pollutant emissions? Implications for environmental sustainability target for China. Environ Sci Pollut Res 27, 25450–25460 (2020). https://doi.org/10.1007/s11356-020-08784-3

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