Lu Hongyou and Zhang Jingyu
(School of Economics and Management, Wuhan University)
Abstract: This paper investigates the relationship between economic growth and pollutant emissions for Guangdong province, during the period 1995-2012. The investigation is made on the basis of the environmental Kuznets curve hypothesis, using time series data and cointegration analysis. Carbon dioxide (CO2) and sulfur dioxide (SO2) are used as the environmental indicators, and GDP as the economic indicator. Our results show that there is a long-run cointegrating relationship between the per capita emissions of two pollutants and the per capita GDP. An inverted U relationship between SO2 emissions and GDP has been found, with income turning point approximately equals to 25001.72 yuan. However, a monotonically increasing relationship with GDP is found more appropriate for CO2 emissions. Furthermore, the causality results show that the relationship between income and pollution in Guangdong is one of unidirectional causality with income causing environmental changes and not vice versa, both in the short-run and long-run. This implies that an emission reduction policies and more investment in pollution abatement expense will not hurt economic growth. It could be a feasible policy tool for Guangdong to achieve its sustainable growth in the long-run.
Key Words: Environmental Kuznets Curve； Cointegration；Guangdong