Decoupling of Emissions and GDP: Evidence from Aggregate and Provincial Chinese Data

By Gail Cohen, João Tovar Jalles, Prakash Loungani, Ricardo Marto, Gewei Wang

April 11, 2018

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Gail Cohen, João Tovar Jalles, Prakash Loungani, Ricardo Marto, and Gewei Wang. Decoupling of Emissions and GDP: Evidence from Aggregate and Provincial Chinese Data, (USA: International Monetary Fund, 2018) accessed September 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We provide a comprehensive analysis of the relationship between greenhouse gas (GHG) emissions and GDP in China using both aggregate and provincial data. The Kuznets elasticity is about 0.6 for China, higher than that in advanced countries but below that of major emerging markets. The elasticity is somewhat lower for consumption-based emissions than for production-based emissions, providing mild evidence consistent with the “pollution haven” hypothesis. The Kuznets elasticity is much lower for the last three decades than for the three previous decades, suggesting a longer-term trend toward decoupling as China has become richer. Further evidence of this comes from provincial data: richer provinces tend to have smaller Kuznets elasticities than poorer ones. In addition to the trend relationship, we find that the Environmental Okun's Law holds in China.

Subject: Business cycles, Climate change, Economic growth, Environment, Greenhouse gas emissions, National accounts, Non-renewable resources, Personal income

Keywords: Business cycles, China, Climate change, Emissions, Emissions growth, Emissions-output elasticity, Environmental Okun’s Law, GHG emission, Global, Greenhouse gas emissions, Kuznets Curve, Kuznets elasticity, Non-renewable resources, Personal income, Provinces, Real GDP, Trend emission, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/085
Stock No:

WPIEA2018085
ISBN:

9781484351000
ISSN:

1018-5941

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