Exploration of the relationship between economic growth and environmental pollution of China : Environmental Kuznets Curve hypothesis test in China

Abstract

It is well known that China is facing the dilemma of economic development and deterioration of environmental quality. Environmental Kuznets curve (EKC) is a hypothesis, which illustrates an inverted U relationship between pollution level and income, raised to provide a kind of explanation on the environmental change in relation to sustainable development. Based on EKC hypothesis, this dissertation aims to test whether or not China follows the inverted U shaped pattern, on both national level and single provincial level, and tries to give out interpretation from the view of sectoral, or industrial structures. Six kinds of pollutants from 1999 to 2015 have been chosen in this research. Panel data both nationwide and in 31 provinces were collected from the database developed by the National Bureau of Statistics of China. A regression model was built to test EKC. Meanwhile, cluster analysis on different provinces was processed in terms of their industrial structures. Comprehensive results have shown the existence of EKC in China, and China has passed the turning point of the inverted U shaped curve, which means the pollution level has begun to decline on the whole national level. On the other hand, diverse patterns of the relationships between pollution and growth have been found in the results, which reflect disparate development among different provinces. At the same time, cluster analysis revealed that the proportion of tertiary industry in one’s GDP is relevant to the position of a province on the EKC. Therefore, this dissertation suggests that the provinces which are struggling in the development-environment dilemma can seek for measures to achieve structural transition for long-term sustainable development.