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

Author/Editor:

Gail Cohen ; João Tovar Jalles ; Prakash Loungani ; Ricardo Marto ; Gewei Wang

Publication Date:

April 11, 2018

Electronic Access:

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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.

Series:

Working Paper No. 18/85

Subject:

English

Publication Date:

April 11, 2018

ISBN/ISSN:

9781484351000/1018-5941

Stock No:

WPIEA2018085

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

26

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