Pollutant emissions,energy consumption and economic development in China:Evidence from dynamic panel data

This study investigates the relationship among pollutant emissions, energy consumption and economic development in China during the period 1982–2007 by using a one-step GMM-system model under a multivariable panel VAR framework, controlling for capital stock and labor force. Regarding the data for all 28 provinces as a whole, we find that there is a unidirectional positive relationship running from pollutant emission to economic development and a unidirectional negative relationship between pollutant emission and energy consumption. Based on traditional economic planning, the panel data of 28 provinces are divided into two cross-province groups. It is discovered that in the eastern coastal region of China, there is only a unidirectional positive causal relationship leading from economic development to pollutant emission; while in the central and western regions, there are the unidirectional Granger causal relationships between pollutant emission and energy consumption, as well as between pollutant emission and economic development. There is also a unique unidirectional causal relationship running from economic development to energy consumption, which does not appear in the eastern coastal region or in China as a whole.