How to Balance the Trade-off between Economic Development and Climate Change?

Xuejiao Ma and Qichuan Jiang
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Xuejiao Ma: School of Economics and Management, Dalian University of Technology, Dalian 116024, China
Qichuan Jiang: School of Finance, Dongbei University of Finance and Economics, Dalian 116023, China

Sustainability, 2019, vol. 11, issue 6, 1-30

Abstract: Climate change is not only an environmental issue but also a development problem. Maintaining rapid economic development while simultaneously mitigating climate change is a pivotal and challenging task. Previous studies mainly focused on testing the validity of the environmental Kuznets hypothesis but ignored the internal influencing mechanism. This paper extends the past work in three aspects. First, we theoretically discuss the interaction of the scale, structure and technology effects of economic development and their impact on carbon emissions based on a classic model and the general equilibrium theory. Second, the relationship between carbon emissions and these three effects are examined by considering the quadratic term, and the interactive mechanism among them is evaluated by applying multiple mediating analysis. Due to the important role of the technology effect, we further divide it into different sources to reveal its impact on carbon emissions and discuss the rebound effect. Finally, the policy effect is considered, and the results demonstrate that the implementation of effective environmental regulations can mitigate the adverse impact of economic development on carbon emissions. Our research is an initial attempt to thoroughly explore the pathways to balance the trade-off between development and environment from the perspective of internal influencing mechanisms. The empirical results can serve as an important reference for making policies about energy conservation and emission reduction.

Keywords: climate change; economic development; internal influencing mechanism; technical progress; industrial structure (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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