The pathway to the natural gas industry: Financial development, coal consumption, and carbon dioxide emissions in P.R. China

Authors

Teng Tong
Jaime Ortiz, The University of Texas Rio Grande Valley
Haibo Wang

Document Type

Article

Publication Date

3-3-2023

Abstract

This paper revisits the causal links between financial development, coal consumption, and CO2 emissions in P.R. China over the 1977–2017 period to validate the development of its natural gas industry. It uses a Bootstrap ARDL bound test with structural breaks to establish stationarity, short- and long-run dynamics, and causality of the series. The results show there are no long-run relationships among these three variables, but a Granger causality test does indicate the presence of both a two-way Granger causality between coal consumption and CO2 emissions, and a one-way Granger causality running from financial development to both coal consumption and CO2 emissions. These results have important policy implications for the Chinese government's efforts to meet its commitment at the 75th UN General Assembly to achieve carbon neutrality. In that context, the promotion of its natural gas industry, including carbon pricing mechanisms and taxation schemes while enacting environmentally friendly energy abatement policies become a must.

Comments

© The Author(s) 2023

Recommended Citation

Tong, T., Ortiz, J. and Wang, H., 2023. The pathway to the natural gas industry: Financial development, coal consumption, and carbon dioxide emissions in PR China. Science Progress, 106(1), p.00368504231160643. https://doi.org/10.1177/00368504231160643

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Publication Title

Science Progress

DOI

10.1177/00368504231160643