Environmental cost of natural resources utilization and economic growth: Can China shift some burden through globalization for sustainable development?

TLDR

The study investigates how China’s CO₂ emissions from 1980 to 2017 are influenced by economic growth, globalization, financial development, and natural resource use. The authors employ a suite of econometric techniques—including Bayer‑Hanck cointegration, ARDL bounds tests, FMOLS, DOLS, CCR, and frequency‑domain Granger causality—to analyze the multivariate relationships. Results indicate that economic growth and natural resource exploitation raise CO₂ emissions, while globalization improves environmental quality, financial development shows no significant effect, and long‑run causality runs from growth, globalization, and resources to emissions.

Abstract

Abstract This study aims to investigate the relationship between CO 2 emissions in China and its prospective determinants, namely economic growth, globalization, financial development, and natural resources during the period from 1980 to 2017. We present more detailed analyses across multiple econometric approaches within a multivariate system, e.g., the Bayer‐Hanck combined cointegration approach, the ARDL bounds test approach, ARDL estimates in short run and long run, robustness check by cointegration regressions (i.e., FMOLS, DOLS, CCR), and Granger causality approach in the frequency domain. Our results show that economic growth and natural resources have a positive impact on CO 2 emissions in China, although globalization contributes to improving its environmental quality. Meanwhile, there is no statistical evidence that CO 2 emissions in China could be affected by financial development. The causality analysis reveals that globalization, economic growth and natural resources all lead to CO 2 emissions in the long run, while financial development only causes the short‐run CO 2 emissions, which further demonstrate our findings. Such findings are meaningful for policymakers to achieve the sustainable development in China.