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How Green is China¡¯s Path of Catching Up? An International Comparative Evaluation

Ding Lu ()

Frontiers of Economics in China, 2014, vol. 9, issue 3, 484-498

Abstract: China¡¯s rise as a global economic power in recent decades has been achieved with tremendous environmental costs. Has China been an abnormally heavier polluter in its development path? How has pollution accounted for China¡¯s hyper economic growth? This study answers these questions by evaluating the environmental effects of China¡¯s growth using a data set of 61 countries over a period of four decades. The analysis is focused on two pollutant emissions: CO2 emissions, which carry global externalities, and particulate emissions, of which the environmental cost is more domestic. A fractional polynomial (FP) regression model is estimated to project emissions levels per worker based on lagged values of per capita GDP and other variables. It reveals that China¡¯s CO2 emissions have been higher than the projection for most years with an average margin of over 5.3% while its particulate emissions have exceeded projection by an average margin of more than 7.5%. The excessive emissions levels of both pollutants confirm the severity of China¡¯s environmental challenges and indicate great potential for the economy to work for a greener growth pattern. On the other hand, contributions of emissions to multi-factor productivity (MFP) growth are estimated by FP regressions based on a human-capital augmented growth model. The results show opposing trends of CO2 and particulates in their ¡°contributions¡± to GDP growth, which imply asymmetric incentives to abate the two types of pollution. These findings have important implications for China¡¯s environmental policy making.

Keywords: economic growth; environmental damage; pollution (search for similar items in EconPapers)
JEL-codes: O44 O47 Q56 (search for similar items in EconPapers)
Date: 2014
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Handle: RePEc:fec:journl:v:9:y:2014:i:3:p:484-498