Advertisement

Total retail goods consumption, industry structure, urban population growth and pollution intensity: an application of panel data analysis for China

  • Zeeshan Khan
  • Muhammad Shahbaz
  • Manzoor AhmadEmail author
  • Fazli Rabbi
  • Yang Siqun
Research Article
  • 29 Downloads

Abstract

There has been a growing concern regarding the regulation of environmental pollution in the face of a growing population, global warming, and climate change. Governments around the world have devised various mechanisms and policy strategies to ameliorate the worsening condition of natural environment around the world. Similar to the developed world, in China, the government is also aware of deteriorating environmental conditions. Hence, the existing abatement instruments include pollution discharge fees and several other policy strategies. This research is conducted to investigate the association between pollution intensity and its determinants, i.e., pollutant discharge fees and urban population, third industry structure, and total retail goods consumption. The secondary data of 29 provinces is used for empirical analysis. The principal component analysis is used to develop a single index called pollution intensity, and panel autoregressive distributed lags model (ARDL), or pooled mean group (PMG) analysis, is employed to find long-run and short-run relationship. The empirical findings show that pollution discharge fees negatively affects pollution intensity. Total retail good consumption and urban population increase pollution intensity. However, third industry structure helps to control pollution intensity. These results suggest reforms in the existing environmental regulations policy by targeting more pollutant intensive provinces.

Keywords

Pollution discharge fees Pollution intensity Environmental regulations 

Notes

References

  1. Abolhosseini S, Heshmati A, Altmann J (2014) The effect of renewable energy development on carbon emission reduction: an empirical analysis for the EU-15 countries. IZA DP No. 7989, February 2014Google Scholar
  2. Adusah-Poku F (2016) Carbon dioxide emissions, urbanization and population: empirical evidence from Sub-Sahran Africa. Energy Econ Lett 3(1):1–16Google Scholar
  3. Al-Mulali U, Saboori B, Ozturk I (2015) Investigating the environmental Kuznets curve hypothesis in Vietnam. Energy Policy 76:123–131Google Scholar
  4. Almutairi H, Elhedhli S (2014) Modeling, analysis, and evaluation of a carbon tax policy based on the emission factor. Comput Ind Eng 77:88–102Google Scholar
  5. Ambec S, Cohen MA, Elgie S, Lanoie P (2013) The Porter hypothesis at 20: can environmental regulation enhance innovation and competitiveness? Rev Environ Econ Policy 7(1):2–22Google Scholar
  6. Asteriou D, Hall SG (2015) Applied econometrics. Macmillan International Higher EducationGoogle Scholar
  7. Asteriou D, Monastiriots V (2004) What do unions do at the large scale? Macroeconomic evidence from a panel of OECD countries. J Appl Econ 7(1):27–46Google Scholar
  8. Azid A, Juahir H, Toriman ME, Kamarudin MKA, Saudi ASM, Hasnam CNC, Osman MR (2014) Prediction of the level of air pollution using principal component analysis and artificial neural network techniques: a case study in Malaysia. Water Air Soil Pollut 225(8):2063Google Scholar
  9. Bello AK, Abimbola OM (2010) Does the level of economic growth influence environmental quality in Nigeria: a test of environmental Kuznets curve (EKC) hypothesis. Pak J Soc Sci 7(4):325–329Google Scholar
  10. Birdsall N (1992) Another look at population and global warming (Vol. 1020). World Bank PublicationsGoogle Scholar
  11. Boden T, Marland G, Andres B (2009) Global CO2 emissions from fossil-fuel burning, cement manufacture, and gas flaring: 1751–2006. Carbon Dioxide Information Analysis Center (CDIAC) Laboratory, Oak Ridge National Laboratory, Oak Ridge, Tenn., USA http://cdiac.ornl.gov/ftp/ndp030/global.1751_2006.ems.
  12. Boutabba MA (2014) The impact of financial development, income, energy and trade on carbon emissions: evidence from the Indian economy. Econ Model 40:33–41Google Scholar
  13. Burchart-Korol D, Pichlak M, Kruczek M (2016) Innovative technologies for greenhouse gas emission reduction in steel production. Metalurgija 55(1):119–122Google Scholar
  14. Chandia KE, Gul I, Aziz S, Sarwar B, Zulfiqar S (2018) An analysis of the association among carbon dioxide emissions, energy consumption and economic performance: an econometric model. Carbon Manage:1–15Google Scholar
  15. Charfeddine L, Khediri KB (2016) Financial development and environmental quality in UAE: cointegration with structural breaks. Renew Sust Energ Rev 55:1322–1335Google Scholar
  16. Chen K, Stanway D (2016) China sets cap for energy consumption for first time. Reuters, Global Energy News, March, 4Google Scholar
  17. Cherni A, Jouini SE (2017) An ARDL approach to the CO2 emissions, renewable energy and economic growth nexus: Tunisian evidence. Int J Hydrog Energy 42(48):29056–29066Google Scholar
  18. Chertow MR (2000) The IPAT equation and its variants. J Ind Ecol 4(4):13–29Google Scholar
  19. Clark C, Foxon T, Gross R, Jacobs M (2001) Innovation and the environment: challenges and policy options for the UK. Imperial College of Science, Technology and MedicineGoogle Scholar
  20. Cole M (2005) Re-examining the pollution-income relationship: a random coefficients approach. Econ Bull 14(1):1–7Google Scholar
  21. Cole MA, Elliott RJ, Shimamoto K (2005) Industrial characteristics, environmental regulations and air pollution: an analysis of the UK manufacturing sector. J Environ Econ Manag 50(1):121–143Google Scholar
  22. Dar JA, Asif M (2018) Does financial development improve environmental quality in Turkey? An application of endogenous structural breaks based cointegration approach. Manag Environ Qual 29(2):368–384Google Scholar
  23. Dasgupta, S., Wheeler, D. and Huq, M. (1997). Bending the rules: discretionary pollution control in China.Google Scholar
  24. De Bruyn SM, van den Bergh JC, Opschoor JB (1998) Economic growth and emissions: reconsidering the empirical basis of environmental Kuznets curves. Ecol Econ 25(2):161–175Google Scholar
  25. Dechezleprêtre, A., Martin, R. and Bassi, S. (2016). Climate change policy, innovation and growth. London: Grantham Research Institute & Global Green Growth Institute. At http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2016/01/Dechezlepretre-et-alpolicybrief-Jan-2016.pdf.
  26. Depuy M, Xuan W (2016) China’s string of new policies addressing renewable energy curtailment: an update. Renewable Energy WorldGoogle Scholar
  27. Diallo, A. K. and Masih, M. (2017). CO2 emissions and financial development: evidence from the United Arab Emirates based on an ARDL approach.Google Scholar
  28. Dietz T, Rosa EA (1997) Effects of population and affluence on CO2 emissions. Proc Natl Acad Sci 94(1):175–179Google Scholar
  29. Dinda S (2004) Environmental Kuznets curve hypothesis: a survey. Ecol Econ 49(4):431–455Google Scholar
  30. Engelman, R. (1994). Stabilizing the atmosphere: population consumption and greenhouse gasesGoogle Scholar
  31. Fernández YF, López MF, Blanco BO (2018) Innovation for sustainability: the impact of R&D spending on CO2 emissions. J Clean Prod 172:3459–3467Google Scholar
  32. Friedl B, Getzner M (2003) Determinants of CO2 emissions in a small open economy. Ecol Econ 45(1):133–148Google Scholar
  33. Fromentin V (2017) The long-run and short-run impacts of remittances on financial development in developing countries. Q Rev Econ Finance 66:192–201Google Scholar
  34. Galeotti M, Lanza A, Pauli F (2006) Reassessing the environmental Kuznets curve for CO2 emissions: a robustness exercise. Ecol Econ 57(1):152–163Google Scholar
  35. Gao Y, Tsai SB, Xue X, Ren T, Du X, Chen Q, Wang J (2018) An empirical study on green innovation efficiency in the green institutional environment. Sustainability 10(3):724Google Scholar
  36. Georg S, Røpke I, Jørgensen U (1992) Clean technology—Innovation and environmental regulation. Environ Resour Econ 2(6):533–550Google Scholar
  37. Gokmenoglu K, Ozatac N, Eren BM (2015) Relationship between industrial production, financial development and carbon emissions: the case of Turkey. Procedia Econ Financ 25:463–470Google Scholar
  38. Greene WH (2003) Econometric analysis. Pearson Education IndiaGoogle Scholar
  39. Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353–377Google Scholar
  40. Gujarati, D. N. (2009). Basic econometrics: Tata McGraw-Hill Education.Google Scholar
  41. Guo X, Ho MS, You L, Cao J, Fang Y, Tu T, Hong Y (2018) Industrial water pollution discharge taxes in China: a multi-sector dynamic analysis. Water 10(12):1742Google Scholar
  42. Harris R, Tzavalis E (1996) Inference for unit roots in dynamic panels (No. 9604)Google Scholar
  43. Hettige H, Huq M, Pargal S, Wheeler D (1996) Determinants of pollution abatement in developing countries: evidence from South and Southeast Asia. World Dev 24(12):1891–1904Google Scholar
  44. Holtz-Eakin D, Selden TM (1995) Stoking the fires? CO2 emissions and economic growth. J Public Econ 57(1):85–101Google Scholar
  45. Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econ 115(1):53–74Google Scholar
  46. Jaffe AB, Palmer K (1997) Environmental regulation and innovation: a panel data study. Rev Econ Stat 79(4):610–619Google Scholar
  47. Jaffe AB, Peterson SR, Portney PR, Stavins RN (1995) Environmental regulation and the competitiveness of US manufacturing: what does the evidence tell us? J Econ Lit 33(1):132–163Google Scholar
  48. Jalil A, Feridun M (2011) The impact of growth, energy and financial development on the environment in China: a cointegration analysis. Energy Econ 33(2):284–291Google Scholar
  49. Jamel L, Maktouf S (2017) The nexus between economic growth, financial development, trade openness, and CO2 emissions in European countries. Cogent Econ Financ 5(1):1341456Google Scholar
  50. Jin L, Duan K, Shi C, Ju X (2017) The impact of technological progress in the energy sector on carbon emissions: an empirical analysis from China. Int J Environ Res Public Health 14(12):1505Google Scholar
  51. Jordaan SM, Romo-Rabago E, McLeary R, Reidy L, Nazari J, Herremans IM (2017) The role of energy technology innovation in reducing greenhouse gas emissions: a case study of Canada. Renew Sust Energ Rev 78:1397–1409Google Scholar
  52. Kang Y-Q, Zhao T, Yang Y-Y (2016) Environmental Kuznets curve for CO2 emissions in China: a spatial panel data approach. Ecol Indic 63:231–239Google Scholar
  53. Kanjilal K, Ghosh S (2013) Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks. Energy Policy 56:509–515Google Scholar
  54. Kemp R, Pontoglio S (2011) The innovation effects of environmental policy instruments—a typical case of the blind men and the elephant? Ecol Econ 72:28–36Google Scholar
  55. Kivyiro P, Arminen H (2014) Carbon dioxide emissions, energy consumption, economic growth, and foreign direct investment: Causality analysis for Sub-Saharan Africa. Energy 74:595–606Google Scholar
  56. Komal R, Abbas F (2015) Linking financial development, economic growth and energy consumption in Pakistan. Renew Sust Energ Rev 44:211–220Google Scholar
  57. Lee K-H, Min B, Yook K-H (2015) The impacts of carbon (CO2) emissions and environmental research and development (R&D) investment on firm performance. Int J Prod Econ 167:1–11Google Scholar
  58. Li Z, Zhao J (2017) Environmental effects of carbon taxes: a review and case study. World J Soc Sci 4(2):7Google Scholar
  59. 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):131–152Google Scholar
  60. Ma Y, Hou G, Xin B (2017) Green process innovation and innovation benefit: the mediating effect of firm image. Sustainability 9(10):1778Google Scholar
  61. Maddala GS, Wu S (1999) A comparative study of unit root tests with panel data and a new simple test. Oxf Bull Econ Stat 61(S1):631–652Google Scholar
  62. Managi S, Jena PR (2008) Environmental productivity and Kuznets curve in India. Ecol Econ 65(2):432–440Google Scholar
  63. Managi S, Kaneko S (2009) Environmental performance and returns to pollution abatement in China. Ecol Econ 68(6):1643–1651Google Scholar
  64. Martínez-Zarzoso I, Bengochea-Morancho A (2004) Pooled mean group estimation of an environmental Kuznets curve for CO2. Econ Lett 82(1):121–126Google Scholar
  65. Martínez-Zarzoso I, Maruotti A (2011) The impact of urbanization on CO2 emissions: evidence from developing countries. Ecol Econ 70(7):1344–1353Google Scholar
  66. McCleary GF (1953) The Malthusian population theory. Faber & Faber, LondonGoogle Scholar
  67. Meyerson FA (1998) Population, carbon emmissions, and global warming: the forgotten relationship at Kyoto. Popul Dev Rev 24:115–130Google Scholar
  68. Moomaw WR, Unruh GC (1997) Are environmental Kuznets curves misleading us? The case of CO2 emissions. Environ Dev Econ 2(4):451–463Google Scholar
  69. Mu Z, Bu S, Xue B (2014) Environmental legislation in China: achievements, challenges and trends. Sustainability 6(12):8967–8979Google Scholar
  70. Nasreen S, Anwar S, Ozturk I (2017) Financial stability, energy consumption and environmental quality: evidence from South Asian economies. Renew Sust Energ Rev 67:1105–1122Google Scholar
  71. Pesaran MH, Smith R (1995) Estimating long-run relationships from dynamic heterogeneous panels. J Econ 68(1):79–113Google Scholar
  72. Pesaran MH, Shin Y, Smith RP (1999) Pooled mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc 94(446):621–634Google Scholar
  73. Ponce d LBD, Marshall J (2014) Relationship between urbanization and CO2 emissions depends on income level and policy. Environ Sci Technol 48(7):3632–3639Google Scholar
  74. Press CS (2016) China Statistical Yearbook 2016Google Scholar
  75. Sadorsky P (2009) Renewable energy consumption and income in emerging economies. Energy Policy 37(10):4021–4028Google Scholar
  76. Sadorsky P (2010) The impact of financial development on energy consumption in emerging economies. Energy Policy 38(5):2528–2535Google Scholar
  77. Săndică A-M, Dudian M, Ştefănescu A (2018) Air pollution and human development in Europe: a new index using principal component analysis. Sustainability 10(2):312Google Scholar
  78. Scrimgeour F, Oxley L, Fatai K (2005) Reducing carbon emissions? The relative effectiveness of different types of environmental tax: the case of New Zealand. Environ Model Softw 20(11):1439–1448Google Scholar
  79. Sehrawat M, Giri A, Mohapatra G (2015) The impact of financial development, economic growth and energy consumption on environmental degradation: evidence from India. Manag Environ Qual 26(5):666–682Google Scholar
  80. Selden TM, Song D (1995) Neoclassical growth, the J curve for abatement, and the inverted U curve for pollution. J Environ Econ Manag 29(2):162–168Google Scholar
  81. Shaari MS, Abdullah DNC, Alias NS, Adnan NSM (2016) Positive and negative effects of research and development. Int J Energy Econ Policy 6(4)Google Scholar
  82. Shafik, N. (1994). Economic development and environmental quality: an econometric analysis. Oxford Economic Papers, 757-773.Google Scholar
  83. Shahbaz M, Solarin SA, Mahmood H, Arouri M (2013) Does financial development reduce CO2 emissions in Malaysian economy? A time series analysis. Econ Model 35:145–152Google Scholar
  84. Shen W, Wang Y (2017) Adaptive policy innovations and the construction of emission trading schemes in China: taking stock and looking forward. Environmental Innovation and Societal TransitionsGoogle Scholar
  85. Solarin, S. A., Al-Mulali, U., Gan, G. G. G. and Shahbaz, M. (2018). The impact of biomass energy consumption on pollution: evidence from 80 developed and developing countries. Environmental Science and Pollution Research, 1-17.Google Scholar
  86. Stern DI (2004) The rise and fall of the environmental Kuznets curve. World Dev 32(8):1419–1439Google Scholar
  87. Tamazian A, Rao BB (2010) Do economic, financial and institutional developments matter for environmental degradation? Evidence from transitional economies. Energy Econ 32(1):137–145Google Scholar
  88. Tamazian A, Chousa JP, Vadlamannati KC (2009) Does higher economic and financial development lead to environmental degradation: evidence from BRIC countries. Energy Policy 37(1):246–253Google Scholar
  89. Wan XY (2018) An empirical analysis of the relationship between urbanization and fiscal policy---taking Jiangxi Province of China as an example. J Math Res 10(2):140Google Scholar
  90. Wang, H. and Chen, M. (1999). How the Chinese system of charges and subsidies affects pollution control efforts by China’s top industrial polluters (Vol. 2198): World Bank Publications.Google Scholar
  91. Wang S, Ma H, Zhao Y (2014) Exploring the relationship between urbanization and the eco-environment—a case study of Beijing–Tianjin–Hebei region. Ecol Indic 45:171–183Google Scholar
  92. Xiao B, Niu D, Guo X, Xu X (2015) The impacts of environmental tax in China: a dynamic recursive multi-sector CGE model. Energies 8(8):7777–7804Google Scholar
  93. Xing T, Jiang Q, Ma X (2017) To facilitate or curb? The role of financial development in China’s carbon emissions reduction process: a novel approach. Int J Environ Res Public Health 14(10):1222Google Scholar
  94. Xu B, Lin B (2017) Does the high–tech industry consistently reduce CO2 emissions? Results from nonparametric additive regression model. Environ Impact Assess Rev 63:44–58Google Scholar
  95. Yang X, Li R (2018) Investigating low-carbon city: empirical study of Shanghai. Sustainability 10(4):1054Google Scholar
  96. Yearbook CS (2017) National Bureau of Statistics of the People’s Republic of China 2014Google Scholar
  97. Zhang Y-J (2011) The impact of financial development on carbon emissions: an empirical analysis in China. Energy Policy 39(4):2197–2203Google Scholar
  98. Zhang X-P, Cheng X-M (2009) Energy consumption, carbon emissions, and economic growth in China. Ecol Econ 68(10):2706–2712Google Scholar
  99. Zhang C, Lin Y (2012) Panel estimation for urbanization, energy consumption and CO2 emissions: a regional analysis in China. Energy Policy 49:488–498Google Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.School of Economics and Management (SEM)Tsinghua UniversityBeijingChina
  2. 2.Montpellier Business SchoolMontpellierFrance
  3. 3.School of Economics, Department of Industrial EconomicsNanjing UniversityNanjingChina
  4. 4.Department of EconomicsAbdul Wali Khan University MardanMardanPakistan
  5. 5.Department of Economics and Development StudiesUniversity of SwatSwatPakistan

Personalised recommendations