Empirical Analysis on the Relationship between China´s Carbon Dioxide Emissions and Economic Growth Based on ECM

By introducing the equation of IPCC guidelines (2006), China´s total carbon dioxide emissions from 1953-2008 were calculated. Using Johansen´s co-integration tests and Error Correction Model (ECM) preceded by various unit root or non-stationarity tests, this paper tested for co-integration between gross emissions and GDP of China. Findings are as follows: (1) the GDP is the Granger causality of carbon emissions, but the emissions is not the Granger causality of GDP. (2) Both in long and short term China´s GDP increase would result in the increase of the carbon emissions. (3) The extent of GDP´s effect on carbon emissions in short-term is larger than long-run effect. Based on the results, this paper proposed several strategic implications.