Environmental regulations an option: Asymmetry effect of environmental regulations on carbon emissions using non-linear ARDL

Abstract

Zeeshan Khan*a http://orcid.org/0000-0003-1374-0836, Zhu Sisia http://orcid.org/0000-0002-2788-9423 & Yang Siquna http://orcid.org/0000-0001-6539-7289a School of Economics and Management (SEM), Tsinghua University, Beijing, ChinaCONTACT Zeeshan Khan zeeshan.17@sem.tsinghua.edu.cnColor versions of one or more of the figures in the article can be found online at www.tandfonline.com/ueso.ABSTRACTThe current study reported the asymmetry effect of environmental regulations in the presence of controlled variables such as research and development spending, urban population growth, energy consumption, and financial development on carbon emissions in case of China for the period of 1991–2015. Econometric techniques such as ADF and PP is used to check the stationarity of the data while asymmetry or non-linear ARDL is used to check the asymmetry. The results suggest symmetric or linear relationship between environmental regulations and carbon emissions. Linear ARDL is applied to check long-run and short-run relationship amongst the variables. The results verified that there exists negative and statistically significant relationship exists both in short and long-run between environmental regulation and carbon emissions. Similarly, research and development and financial development also improve carbon emissions. However, urban population growth and energy consumption increase carbon emissions. The study further suggests that sustainable, green urbanization, green credit concept to promote sustainable financial development, innovation in technology through research and development and current environmental regulation should be strengthening to achieve China 2030 target of reducing carbon emissions.