The effect of fossil fuel and hydropower on carbon dioxide emissions: EKC validation with structural breaks
Abstract
This research is carried out to explore the relationship between economic growth, fossil energy, carbon emissions, hydropower, industrial development and energy endowment, and the effectiveness of the environmental Kuznets curve (EKC) hypothesis in China from 1965 to 2016 is tested. To this end, some econometric methods with structural breaks are employed. The results illustrate that the EKC considering structural breaks is existed in China. Furthermore, hydropower consumption can significantly reduce carbon dioxide (CO2) emissions, however, the reduction can be masked by the increase of fossil energy consumption. In addition, industrialization level and economic growth positively and significantly affect CO2 emissions. Finally, some policies for reducing CO2 emissions are put forward.
Keyword : hydropower, Environmental Kuznets curve, structural breaks, CO2 emissions, fossil fuel, Granger causality
How to Cite
Xia, C., & Wang, Z. (2020). The effect of fossil fuel and hydropower on carbon dioxide emissions: EKC validation with structural breaks . Journal of Environmental Engineering and Landscape Management, 28(1), 36-47. https://doi.org/10.3846/jeelm.2020.11832
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Kousksou, T., Allouhi, A., Belattar, M., Jamil, A., Rhafiki, T. E., & Zeraouli, Y. (2015). Morocco’s strategy for energy security and low-carbon growth. Energy, 84, 98-105. https://doi.org/10.1016/j.energy.2015.02.048
Liu, X., Zhang, S., & Bae, J. (2017). The impact of renewable energy and agriculture on carbon dioxide emissions: investigating the environmental Kuznets curve in four selected ASEAN countries. Journal of Cleaner Production, 164, 12391247. https://doi.org/10.1016/j.jclepro.2017.07.086
Li, K., & Lin, B. Q. (2015). Impacts of urbanization and industrialization on energy consumption/CO2 emissions: does the level of development matter? Renewable and Sustainable Energy Reviews, 52, 1107-1122. https://doi.org/10.1016/j.rser.2015.07.185
Li, T., Wang, Y., & Zhao, D. (2016). Environmental Kuznets Curve in China: new evidence from dynamic panel analysis. Energy Policy, 91, 138-147. https://doi.org/10.1016/j.enpol.2016.01.002
Muhammad, B. (2019). Energy consumption, CO2 emissions and economic growth in developed, emerging and Middle East and North Africa countries. Energy, 179, 232-245. https://doi.org/10.1016/j.energy.2019.03.126
Muhammad, S., Mantu, K. M., Syed, J. H., & Shawkat, H. (2019). Testing the globalization-driven carbon emissions hypothesis: International evidence. International Economics, 158, 25-38. https://doi.org/10.1016/j.inteco.2019.02.002
Mohamed, H., Jebli, M. B., & Youssef, S. B. (2019). Renewable and fossil energy, terrorism, economic growth, and trade: Evidence from France. Renewable Energy, 139, 459-467. https://doi.org/10.1016/j.renene.2019.02.096
Meng, M., Fu, Y. N., & Wang, X. F. (2018). Decoupling, decomposition and forecasting analysis of China’s fossil energy consumption from industrial output. Journal of Cleaner Production, 177, 752-759. https://doi.org/10.1016/j.jclepro.2017.12.278
Mikayilov, J. I., Galeotti, M., & Hasanov, F. J. (2018). The impact of economic growth on CO2 emissions in Azerbaijan. Journal of Cleaner Production, 197, 1558-1572. https://doi.org/10.1016/j.jclepro.2018.06.269
Ngarambe, J., Lim, H. S., & Kim, G. (2018). Light pollution: Is there an Environmental Kuznets Curve? Sustainable Cities and Society, 42, 337-343. https://doi.org/10.1016/j.scs.2018.07.018
Ogino, K., Dash, S. K., & Nakayama, M. (2019). Change to hydropower development in Bhutan and Nepal. Energy for Sustainable Development, 50, 1-17. https://doi.org/10.1016/j.esd.2019.02.005
Pata, U. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: Testing EKC hypothesis with structural breaks. Journal of Cleaner Production, 187, 770-779. https://doi.org/10.1016/j.jclepro.2018.03.236
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16, 289-326. https://doi.org/10.1002/jae.616
Pinzón, K. (2018). Dynamics between energy consumption and economic growth in Ecuador: A granger causality analysis. Economic Analysis and Policy, 57, 88-101. https://doi.org/10.1016/j.eap.2017.09.004
Rafindadi, A. A., & Ozturk, I. (2016). Effects of financial development, economic growth and trade on electricity consumption: evidence from post-Fukushima Japan. Renewable and Sustainable Energy Reviews, 54, 1073-1084. https://doi.org/10.1016/j.rser.2015.10.023
Rahman, M. M., & Kashem, M. A. (2017). Carbon emissions, energy consumption and industrial growth in Bangladesh: Empirical evidence from ARDL cointegration and Granger causality analysis. Energy Policy, 110, 600-608. https://doi.org/10.1016/j.enpol.2017.09.006
Shabani, Z. D., & Shahnazi, R. (2019). Energy consumption, carbon dioxide emissions, information and communications technology, and gross domestic product in Iranian economic sectors: A panel causality analysis. Energy, 169, 1064-1078. https://doi.org/10.1016/j.energy.2018.11.062
Seker, F., Ertugrul, H. M., & Cetin, M. (2015). The impact of foreign direct investment on environmental quality: A bounds testing and causality analysis for Turkey. Renewable and Sustainable Energy Reviews, 52, 347-356. https://doi.org/10.1016/j.rser.2015.07.118
Ulucak, R., & Bilgili, F. (2018). A reinvestigation of EKC model by ecological footprint measurement for high, middle and low income countries. Journal of Cleaner Production, 188, 144-157. https://doi.org/10.1016/j.jclepro.2018.03.191
Wang, Y. P., Yan, W. L., Zhuang, S. W., & Zhang, Q. (2019). Competition or complementarity? The hydropower and thermal power nexus in China. Renewable Energy, 138, 531-541. https://doi.org/10.1016/j.renene.2019.01.130
Xie, Q. H., Xu, X., & Liu, X. Q. (2019). Is there an EKC between economic growth and smog pollution in China? New evidence from semiparametric spatial autoregressive models. Journal of Cleaner Production, 220, 873-883. https://doi.org/10.1016/j.jclepro.2019.02.166
Zhang, B., Wang, B., & Wang, Z. (2017). Role of renewable energy and non-renewable energy consumption on EKC: evidence from Pakistan. Journal of Cleaner Production, 156, 855-864. https://doi.org/10.1016/j.jclepro.2017.03.203
Zhang, L., Pang, J. X., Chen, X. P., & Lu, Z. (2019). Carbon emissions, energy consumption and economic growth: Evidence from the agricultural sector of China’s main grain-producing areas. Science of The Total Environment, 665, 1017-1025. https://doi.org/10.1016/j.scitotenv.2019.02.162
Zhong, R., Zhao, T. G., He, Y. H., & Chen, X. H. (2019). Hydropower change of the water tower of Asia in 21st century: A case of the Lancang River hydropower base, upper Mekong. Energy, 179, 685-696. https://doi.org/10.1016/j.energy.2019.05.059
Zhou, K., & Li, Y. W. (2019). Influencing factors and fluctuation characteristics of China’s carbon emission trading price. Physica A: Statistical Mechanics and its Applications, 524, 459474. https://doi.org/10.1016/j.physa.2019.04.249
Zhou, X. X., & Feng, C. (2017). The impact of environmental regulation on fossil energy consumption in China: Direct and indirect effects. Journal of Cleaner Production, 142, 3174-3183. https://doi.org/10.1016/j.jclepro.2016.10.152
Arestis, P., & Baltar, C. T. (2019). A model of economic growth for an open emerging country: empirical evidence for Brazil. Structural Change and Economic Dynamics, 49, 217-227. https://doi.org/10.1016/j.strueco.2018.10.005
Alam, M. M., Murad, M. W., Noman, A. H. M., & Ozturk, I. (2016). Relationships among carbon emissions, economic growth, energy consumption and population growth: testing Environmental Kuznets Curve hypothesis for Brazil, China, India and Indonesia. Ecological Indicator, 70, 466-479. https://doi.org/10.1016/j.ecolind.2016.06.043
Bai, J., & Perron, P. (2003). Computation and analysis of multiple structural change models. Cahiers de Recherche, 18, 1-22. https://doi.org/10.1002/jae.659
Balado-Naves, R., Baños-Pino, J. F., & Mayor, M. (2018). Do countries influence neighbouring pollution? A spatial analysis of the EKC for CO emissions. Energy Policy, 123, 266-279. https://doi.org/10.1016/j.enpol.2018.08.059
Bimonte, S., & Stabile, A. (2017). Land consumption and income in Italy: a case of inverted EKC. Ecological Economics, 131, 3643. https://doi.org/10.1016/j.ecolecon.2016.08.016
Bekhet, H. A., & Othman, N. S. (2018). The role of renewable energy to validate dynamic interaction between CO2 emissions and GDP toward sustainable development in Malaysia. Energy Economics, 72, 47-61. https://doi.org/10.1016/j.eneco.2018.03.028
Bhattacharya, M., Churchill, S. A., & Paramati, S. R. (2017). The dynamic impact of renewable energy and institutions on economic output and CO2 emissions across regions. Renewable Energy, 111, 157-167. https://doi.org/10.1016/j.renene.2017.03.102
Bian, N., & Yu, H. W. (2019). How does energy endowment and technological progress affect carbon emission intensity? An empirical analysis based on China’s Yangtze River economic zone. Ekoloji Dergisi, 28, 3991-4002.
Bernier, M., & Plouff, M. (2019). Financial innovation, economic growth, and the consequences of macroprudential policies. Research in Economics, 73, 162-173. https://doi.org/10.1016/j.rie.2019.04.003
Bello, M. O., Sakiru, A. S., & Yuen, Y. Y. (2018). The impact of electricity consumption on CO2 emission, carbon footprint, water footprint and ecological footprint: the role of hydropower in an emerging economy. Journal of Environmental Management, 219, 218-230. https://doi.org/10.1016/j.jenvman.2018.04.101
Bildirici, M. E., & Gökmenoğlu, S. M. (2017). Environmental pollution, hydropower energy consumption and economic growth: Evidence from G7 countries. Renewable and Sustainable Energy Reviews, 75, 68-85. https://doi.org/10.1016/j.rser.2016.10.052
BP. (2018). BP Statistical Review of Word Energy 2018. Retrieved from https://www.bp.com/en/global/corporate/energyeconomics/statistical-review-of-world-energy.html
CSY. (2018). China statistical yearbook. Retrieved from http://www.stats.gov.cn/tjsj/ndsj/2018/indexch.htm
CESY. (2017). China energy statistical yearbook. Retrieved from http://www.stats.gov.cn/tjsj/tjcbw/201806/t20180612_1604117.html
Dong, B., Wang, F., & Guo, Y. (2016). The global EKCs. International Review of Economics & Finance, 43, 210-221. https://doi.org/10.1016/j.iref.2016.02.010
Dong, K., Sun, R., & Dong, X. (2018). CO2 emissions, natural gas and renewables, economic growth: assessing the evidence from China. Science of the Total Environment, 640-641, 293-302. https://doi.org/10.1016/j.scitotenv.2018.05.322
Dong, C., Dong, X., Jiang, Q., Dong, K., & Liu, G. (2018). What is the probability of achieving the carbon dioxide emission targets of the Paris agreement? Evidence from the top ten emitters. Science of the Total Environment, 622, 1294-1303. https://doi.org/10.1016/j.scitotenv.2017.12.093
Danish, Zhang, B., Wang, B., & Wang, Z. (2017). Role of renewable energy and non-renewable energy consumption on EKC: Evidence from Pakistan. Journal of Cleaner Production, 156, 855-864. https://doi.org/10.1016/j.jclepro.2017.03.203
Du, Q., Shao, L., Zhou, J., Huang, N., Bao, T., & Hao, C. C. (2019). Dynamics and scenarios of carbon emissions in China’s construction industry. Sustainable Cities and Society, 48, 101556. https://doi.org/10.1016/j.scs.2019.101556
Gill, A. R., Viswanathana, K. K., & Hassanb, S. (2018). The Environmental Kuznets Curve (EKC) and the environmental problem of the day. Renewable and Sustainable Energy Reviews, 81, 1636-1642. https://doi.org/10.1016/j.rser.2017.05.247
Ghaffar, A., Ashraf, A., Bashir, M. K., & Cui, S. H. (2017). Exploring environmental Kuznets curve (EKC) in relation to green revolution: a case study of Pakistan. Environmental Science & Policy, 77, 166-171. https://doi.org/10.1016/j.envsci.2017.08.019
Gasparatos, A., Doll, C., Esteban, M., Ahmed, A., & Olang, T. A. (2017). Renewable energy and biodiversity: implications for transitioning to a Green Economy. Renewable and Sustainable Energy Reviews, 70, 161-184. https://doi.org/10.1016/j.rser.2016.08.030
Haraguchi, N., Martorano, B., & Sanfilippo, M. (2019). What factors drive successful industrialization? Evidence and implications for developing countries. Structural Change and Economic Dynamics, 49, 266-276. https://doi.org/10.1016/j.strueco.2018.11.002
Kasman, A., & Duman, Y. S. (2015). CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: a panel data analysis. Economic Modelling, 44, 97-103. https://doi.org/10.1016/j.econmod.2014.10.022
Kousksou, T., Allouhi, A., Belattar, M., Jamil, A., Rhafiki, T. E., & Zeraouli, Y. (2015). Morocco’s strategy for energy security and low-carbon growth. Energy, 84, 98-105. https://doi.org/10.1016/j.energy.2015.02.048
Liu, X., Zhang, S., & Bae, J. (2017). The impact of renewable energy and agriculture on carbon dioxide emissions: investigating the environmental Kuznets curve in four selected ASEAN countries. Journal of Cleaner Production, 164, 12391247. https://doi.org/10.1016/j.jclepro.2017.07.086
Li, K., & Lin, B. Q. (2015). Impacts of urbanization and industrialization on energy consumption/CO2 emissions: does the level of development matter? Renewable and Sustainable Energy Reviews, 52, 1107-1122. https://doi.org/10.1016/j.rser.2015.07.185
Li, T., Wang, Y., & Zhao, D. (2016). Environmental Kuznets Curve in China: new evidence from dynamic panel analysis. Energy Policy, 91, 138-147. https://doi.org/10.1016/j.enpol.2016.01.002
Muhammad, B. (2019). Energy consumption, CO2 emissions and economic growth in developed, emerging and Middle East and North Africa countries. Energy, 179, 232-245. https://doi.org/10.1016/j.energy.2019.03.126
Muhammad, S., Mantu, K. M., Syed, J. H., & Shawkat, H. (2019). Testing the globalization-driven carbon emissions hypothesis: International evidence. International Economics, 158, 25-38. https://doi.org/10.1016/j.inteco.2019.02.002
Mohamed, H., Jebli, M. B., & Youssef, S. B. (2019). Renewable and fossil energy, terrorism, economic growth, and trade: Evidence from France. Renewable Energy, 139, 459-467. https://doi.org/10.1016/j.renene.2019.02.096
Meng, M., Fu, Y. N., & Wang, X. F. (2018). Decoupling, decomposition and forecasting analysis of China’s fossil energy consumption from industrial output. Journal of Cleaner Production, 177, 752-759. https://doi.org/10.1016/j.jclepro.2017.12.278
Mikayilov, J. I., Galeotti, M., & Hasanov, F. J. (2018). The impact of economic growth on CO2 emissions in Azerbaijan. Journal of Cleaner Production, 197, 1558-1572. https://doi.org/10.1016/j.jclepro.2018.06.269
Ngarambe, J., Lim, H. S., & Kim, G. (2018). Light pollution: Is there an Environmental Kuznets Curve? Sustainable Cities and Society, 42, 337-343. https://doi.org/10.1016/j.scs.2018.07.018
Ogino, K., Dash, S. K., & Nakayama, M. (2019). Change to hydropower development in Bhutan and Nepal. Energy for Sustainable Development, 50, 1-17. https://doi.org/10.1016/j.esd.2019.02.005
Pata, U. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: Testing EKC hypothesis with structural breaks. Journal of Cleaner Production, 187, 770-779. https://doi.org/10.1016/j.jclepro.2018.03.236
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16, 289-326. https://doi.org/10.1002/jae.616
Pinzón, K. (2018). Dynamics between energy consumption and economic growth in Ecuador: A granger causality analysis. Economic Analysis and Policy, 57, 88-101. https://doi.org/10.1016/j.eap.2017.09.004
Rafindadi, A. A., & Ozturk, I. (2016). Effects of financial development, economic growth and trade on electricity consumption: evidence from post-Fukushima Japan. Renewable and Sustainable Energy Reviews, 54, 1073-1084. https://doi.org/10.1016/j.rser.2015.10.023
Rahman, M. M., & Kashem, M. A. (2017). Carbon emissions, energy consumption and industrial growth in Bangladesh: Empirical evidence from ARDL cointegration and Granger causality analysis. Energy Policy, 110, 600-608. https://doi.org/10.1016/j.enpol.2017.09.006
Shabani, Z. D., & Shahnazi, R. (2019). Energy consumption, carbon dioxide emissions, information and communications technology, and gross domestic product in Iranian economic sectors: A panel causality analysis. Energy, 169, 1064-1078. https://doi.org/10.1016/j.energy.2018.11.062
Seker, F., Ertugrul, H. M., & Cetin, M. (2015). The impact of foreign direct investment on environmental quality: A bounds testing and causality analysis for Turkey. Renewable and Sustainable Energy Reviews, 52, 347-356. https://doi.org/10.1016/j.rser.2015.07.118
Ulucak, R., & Bilgili, F. (2018). A reinvestigation of EKC model by ecological footprint measurement for high, middle and low income countries. Journal of Cleaner Production, 188, 144-157. https://doi.org/10.1016/j.jclepro.2018.03.191
Wang, Y. P., Yan, W. L., Zhuang, S. W., & Zhang, Q. (2019). Competition or complementarity? The hydropower and thermal power nexus in China. Renewable Energy, 138, 531-541. https://doi.org/10.1016/j.renene.2019.01.130
Xie, Q. H., Xu, X., & Liu, X. Q. (2019). Is there an EKC between economic growth and smog pollution in China? New evidence from semiparametric spatial autoregressive models. Journal of Cleaner Production, 220, 873-883. https://doi.org/10.1016/j.jclepro.2019.02.166
Zhang, B., Wang, B., & Wang, Z. (2017). Role of renewable energy and non-renewable energy consumption on EKC: evidence from Pakistan. Journal of Cleaner Production, 156, 855-864. https://doi.org/10.1016/j.jclepro.2017.03.203
Zhang, L., Pang, J. X., Chen, X. P., & Lu, Z. (2019). Carbon emissions, energy consumption and economic growth: Evidence from the agricultural sector of China’s main grain-producing areas. Science of The Total Environment, 665, 1017-1025. https://doi.org/10.1016/j.scitotenv.2019.02.162
Zhong, R., Zhao, T. G., He, Y. H., & Chen, X. H. (2019). Hydropower change of the water tower of Asia in 21st century: A case of the Lancang River hydropower base, upper Mekong. Energy, 179, 685-696. https://doi.org/10.1016/j.energy.2019.05.059
Zhou, K., & Li, Y. W. (2019). Influencing factors and fluctuation characteristics of China’s carbon emission trading price. Physica A: Statistical Mechanics and its Applications, 524, 459474. https://doi.org/10.1016/j.physa.2019.04.249
Zhou, X. X., & Feng, C. (2017). The impact of environmental regulation on fossil energy consumption in China: Direct and indirect effects. Journal of Cleaner Production, 142, 3174-3183. https://doi.org/10.1016/j.jclepro.2016.10.152