An empirical test of the environmental Kuznets curve in China: A panel cointegration approach

This paper investigates the relationship between environmental pollution and economic growth in China based on the environmental Kuznets curve hypothesis, using Chinese provincial data over 1985-2005. Waste gas, waste water and solid wastes are used as environmental indicators and GDP is used as the economic indicator. It is found by panel cointegration test that there is a long-run cointegrating relationship between the per capita emission of three pollutants and the per capita GDP. According to comparisons with the dynamic OLS estimator and the Within OLS estimator, we find that panel cointegration estimation is preferable for all pollutants except for solid wastes. The results also show that all three pollutants are inverse U-shaped, and water pollution has been improved earlier than gas pollution and solid pollution. (c) 2007 Elsevier Inc. All rights reserved.