Relationship between energy consumption, economic growth and environmental pollution in China

Abstract

In recent days, many emerging nations facing severe environmental pollution problems. In order to overcome the environmental problems, many new methods and strategies have been built and some advance sources of energies were also utilized in order to overcome such issues but by using such sources, many challenges were faced. In order to find best possible solutions of such issues, this paper was aimed to minimize the gap of research by examining the effect on economic development of energy expenditure and environmental pollution and by means of finding the casual relationship between them because it has been observed that with development of economy, environmental issues always increase. Effects of both traditional and modern energies was analyzed in this research. Several explanatory variables will be used: Renewable energy consumption, CO₂ emission, economic GDP. Environmental pollution will be taken as the mediating factor that influence this association between energy utilization as well as economic development. Present study was based on the economy of China. ARDL regression model was applied in this research to increase the time series econometrics when non-stationary value demonstrated the co-integration and it is also effective for both stationary and non-stationary time series. At the end, some advanced methods of production were discussed that can be used in this era of industry 4.0. By proper implementation of such processes, many economic and environmental benefits can be achieved.

Keywords: Economic growth; Energy conservation; Environmental pollution; Renewable energy; Smart production system.