『Abstract
In order to prevent the destabilisation of the Earth's biosphere,
CO2 emissions must be reduced quickly and
significantly. The cause of CO2 emissions
by individual countries need to be apprehended in order to understand
the processes required for reducing emissions around the globe.
China and India are the two largest transitional countries and
growing economies, but are in two entirely different categories
in terms of structural changes in growth, trade and energy use.
CO2 emissions from the burning of fossil
fuels have significantly increased in the recent past. This paper
compares China and India using the bounds testing approach to
cointegration and the ARDL methodology to test the long- and short-run
relationships between growth, trade, energy use and endogenously
determined structural breaks. The CO2 emissions
in China were influenced by per capita income, structural changes
and energy consumption. A similar causal connection cannot be
established for India with regard to structural changes and CO2 emissions, because India's informal economy
is much larger than China's. India possesses an extraordinarily
large number of micro-enterprises that are low energy consumers
and not competitive enough to reach international markets. Understanding
these contrasting scenarios is prerequisite to reaching an international
agreement on climate change affecting these two countries.
Keywords: CO2 emissions; Energy consumption;
Environmental Kuznets curve (EKC)』
1. Introduction
2. A comparison of the structural changes in China and India
3. Literature review
4. Econometric specifications
4.1. Estimation
4.2. Unit root tests with structural breaks
4.3. Bounds testing approach to cointegration
5. Empirical results
5.1. Unit root tests with structural breaks in China and
India
5.2. Bounds testing approach to cointegration
6. Conclusions
Appendix
References