1) The document analyzes factors that influence carbon emissions in China using regression analysis.
2) It finds that GDP, energy efficiency, energy structure, and industry structure have a significant impact on carbon emissions in China.
3) The government should emphasize advanced technology development and optimizing industrial structure to reduce carbon emissions.
This chapter is an exract from my final dissretation on 'Environmental effects of shipping imports from China and their economic valutaion. The case of valve components in aluminium, iron and steeel'.
Impact of CNG Load Shedding on Daily Routine: A Study of PakistanMuhammad Arslan
People of Pakistan are facing a number of problems due to CNG load shedding. This study investigated the consequences of energy on routines of people and also on social and economic performance of people. Primary data has been collected by conducting video recorded interviews and comment based interviews from twin cities i.e. Islamabad and Rawalpindi of Pakistan. The sample of study includes students, housewives, businessmen and professional workers who are affecting by this CNG shortage. This study focuses on relationship between CNG shortage and its effect on daily routine life and performance of people. It also focuses on psychological issues as well as the economic issues that are caused due to this shortage. This study utilizes in depth semi structured interviews to conduct the qualitative study. N-Vivo 10 is used as tool of data analysis. The CNG shortage in Pakistan caused many critical issues like unemployment, decrease in export contracts and commodities prices are increasing due to this shortage. Less working hours, lack of social and family gathering, increase in work load, depression and anxiety are results caused by CNG shortage. It is concluded that CNG shortage has bad impact on people’s lives and on their overall performance.
This chapter is an exract from my final dissretation on 'Environmental effects of shipping imports from China and their economic valutaion. The case of valve components in aluminium, iron and steeel'.
Impact of CNG Load Shedding on Daily Routine: A Study of PakistanMuhammad Arslan
People of Pakistan are facing a number of problems due to CNG load shedding. This study investigated the consequences of energy on routines of people and also on social and economic performance of people. Primary data has been collected by conducting video recorded interviews and comment based interviews from twin cities i.e. Islamabad and Rawalpindi of Pakistan. The sample of study includes students, housewives, businessmen and professional workers who are affecting by this CNG shortage. This study focuses on relationship between CNG shortage and its effect on daily routine life and performance of people. It also focuses on psychological issues as well as the economic issues that are caused due to this shortage. This study utilizes in depth semi structured interviews to conduct the qualitative study. N-Vivo 10 is used as tool of data analysis. The CNG shortage in Pakistan caused many critical issues like unemployment, decrease in export contracts and commodities prices are increasing due to this shortage. Less working hours, lack of social and family gathering, increase in work load, depression and anxiety are results caused by CNG shortage. It is concluded that CNG shortage has bad impact on people’s lives and on their overall performance.
Public engagement in Ontario's energy policy 2009 2016Marco Covi
Major Research Project on the evolution of public engagement in Ontario on energy and environmental policy compared and contrasted against the UK. Lessons that can be learned are discussed as well as limitations to implementation of robust public engagement processes.
Tang Jihua is a Carbon Finance Officer who works for the French NGO, Initiative Développement, where he is responsible for the carbon development of rural clean and renewable energy projects. He has over 5 years of experience in the field of rural development projects, including end-user training, project follow-up, communication with stakeholders and carbon finance project development. Jihua also holds a M.S. Degree in Ecology from Yunnan University, China.
Jihua's talk is about how his NGO is trying to reduce the fossil fuel consumption by farmers in Yunnan and Guizhou by introducing carbon finance measures. Project so far shows a promising pattern on the sustainability of the projects and thus maximizing the positive impact which will eventually benefit the local communities and the environment.
Business guide on carbon emission redution and sustainabilityBarney Loehnis
Guide on how businesses can reduce their carbon footprint, with a focus on Asia and Hong Kong, but broadly relevant for any global brand.
The guide was developed by contributions from Cathay Pacific, HSBC, Hang Seng, Hang Lung, Hong Kong Land, OSBC, Bank of East Asia (BEA), Aegis, MTR Corporation, Sino Group, Standard Chartered, Gammon Hong Kong Electric, China Light and Power (CLP), OOCL, PCCW, DTZ, Town Gas and Swire Pacific
A global_outlook_of_economic_expansion_and_environmental_degradation-__an_emp...Marwadi University Rajkot
The study initiated with the questioning about the relation among economic growth, energy use in industries and environmental pollutants of countries in the world. This research work uses cubic function for which data collected in both time series and cross section the panel econometric models such as pooled OLS, unit root tests, co-integration, ADL models were used. This study measures the relationship between CO2 emissions, energy consumption and economic growth. The research advocates that the correlation among CO2, energy consumption and economic development in major countries of the world on both co-integration and individual cross-country results. The study also recombed on the lower time period as well as long term relation embrace environmental protection plan such as re-usable sources, greenery development as directed by United Nations Framework Convention on Climate Change and other Environmental agencies in the world and vis versa to control on carbon emissions in coming years.
Keywords: Industrial energy use, environmental pollutants, economic growth, CO2 emissions, panel data models, Environmental Kuznets Curve
Low Carbon China - Innovation Beyond Efficiencypolicysolutions
Radical innovation is essential to achieve green growth. This paper presents three case studies of business model innovation: fertilizer, lighting services and end-of-life treatment of tires. It makes the case that a culture of innovation is the basis for a low-carbon economy, which demands that we individually and collectively:
• Aspire to transformational, not incremental change;
• Adopt new behaviors and think differently.
English translation of Mandarin original (in press with the Chinese journal Plant Engineering Consultants)
Air Pollution: A New Approach on Global WarmingIJLT EMAS
In a move to curb pollution from the coal- based
power sector. The Union Ministry of Environment ,Forest and
Climate change(MOEF&CC) had announced new emission
limits for power stations ,both existing and upcoming. The
enhanced pace of developmental activities after industrial
revolution i.e. 18th century and rapid urbanization have resulted
in stress on natural resources and quality of life. Pollution is now
a common place term that our ears are attuned to. We hear
about the various forms of pollution and read about it through
the mass media. Air pollution is one such form that refers to the
contamination of the air, irrespective of indoors or outside. A
physical, biological or chemical alteration to the air in the
atmosphere can be termed as pollution. Thus air pollutants are
substances emitted into the air from an anthropogenic, biogenic,
or geogenic source, that is either not part of natural atmosphere
or is present in higher concentrations than the natural
atmosphere, and may cause a short term or long term adverse
effect. It occurs when any harmful gases, dust, smoke enters into
the atmosphere and makes it difficult for plants, animals and
humans to survive as the air becomes dirty. A WHO report
released in May 2014 showed that most of Indian cities are death
traps due to very high air pollution levels. The urban air quality
database of WHO, covering 1600 cities across 91 countries
showed that Indian cities are among those with highest levels of
(Particulate Matter) PM 10 and PM 2.5 and less. Black carbon is
also a kind of particulate matter, responsible for global warming.
Public engagement in Ontario's energy policy 2009 2016Marco Covi
Major Research Project on the evolution of public engagement in Ontario on energy and environmental policy compared and contrasted against the UK. Lessons that can be learned are discussed as well as limitations to implementation of robust public engagement processes.
Tang Jihua is a Carbon Finance Officer who works for the French NGO, Initiative Développement, where he is responsible for the carbon development of rural clean and renewable energy projects. He has over 5 years of experience in the field of rural development projects, including end-user training, project follow-up, communication with stakeholders and carbon finance project development. Jihua also holds a M.S. Degree in Ecology from Yunnan University, China.
Jihua's talk is about how his NGO is trying to reduce the fossil fuel consumption by farmers in Yunnan and Guizhou by introducing carbon finance measures. Project so far shows a promising pattern on the sustainability of the projects and thus maximizing the positive impact which will eventually benefit the local communities and the environment.
Business guide on carbon emission redution and sustainabilityBarney Loehnis
Guide on how businesses can reduce their carbon footprint, with a focus on Asia and Hong Kong, but broadly relevant for any global brand.
The guide was developed by contributions from Cathay Pacific, HSBC, Hang Seng, Hang Lung, Hong Kong Land, OSBC, Bank of East Asia (BEA), Aegis, MTR Corporation, Sino Group, Standard Chartered, Gammon Hong Kong Electric, China Light and Power (CLP), OOCL, PCCW, DTZ, Town Gas and Swire Pacific
A global_outlook_of_economic_expansion_and_environmental_degradation-__an_emp...Marwadi University Rajkot
The study initiated with the questioning about the relation among economic growth, energy use in industries and environmental pollutants of countries in the world. This research work uses cubic function for which data collected in both time series and cross section the panel econometric models such as pooled OLS, unit root tests, co-integration, ADL models were used. This study measures the relationship between CO2 emissions, energy consumption and economic growth. The research advocates that the correlation among CO2, energy consumption and economic development in major countries of the world on both co-integration and individual cross-country results. The study also recombed on the lower time period as well as long term relation embrace environmental protection plan such as re-usable sources, greenery development as directed by United Nations Framework Convention on Climate Change and other Environmental agencies in the world and vis versa to control on carbon emissions in coming years.
Keywords: Industrial energy use, environmental pollutants, economic growth, CO2 emissions, panel data models, Environmental Kuznets Curve
Low Carbon China - Innovation Beyond Efficiencypolicysolutions
Radical innovation is essential to achieve green growth. This paper presents three case studies of business model innovation: fertilizer, lighting services and end-of-life treatment of tires. It makes the case that a culture of innovation is the basis for a low-carbon economy, which demands that we individually and collectively:
• Aspire to transformational, not incremental change;
• Adopt new behaviors and think differently.
English translation of Mandarin original (in press with the Chinese journal Plant Engineering Consultants)
Air Pollution: A New Approach on Global WarmingIJLT EMAS
In a move to curb pollution from the coal- based
power sector. The Union Ministry of Environment ,Forest and
Climate change(MOEF&CC) had announced new emission
limits for power stations ,both existing and upcoming. The
enhanced pace of developmental activities after industrial
revolution i.e. 18th century and rapid urbanization have resulted
in stress on natural resources and quality of life. Pollution is now
a common place term that our ears are attuned to. We hear
about the various forms of pollution and read about it through
the mass media. Air pollution is one such form that refers to the
contamination of the air, irrespective of indoors or outside. A
physical, biological or chemical alteration to the air in the
atmosphere can be termed as pollution. Thus air pollutants are
substances emitted into the air from an anthropogenic, biogenic,
or geogenic source, that is either not part of natural atmosphere
or is present in higher concentrations than the natural
atmosphere, and may cause a short term or long term adverse
effect. It occurs when any harmful gases, dust, smoke enters into
the atmosphere and makes it difficult for plants, animals and
humans to survive as the air becomes dirty. A WHO report
released in May 2014 showed that most of Indian cities are death
traps due to very high air pollution levels. The urban air quality
database of WHO, covering 1600 cities across 91 countries
showed that Indian cities are among those with highest levels of
(Particulate Matter) PM 10 and PM 2.5 and less. Black carbon is
also a kind of particulate matter, responsible for global warming.
HZGD#18-A - Hangzhou's climate change politics, climate governance and green ...HangzhouGreenDrinks
Hangzhou Green Drinks
HZGD#18-A Presentation Event 22Apr2013
Hangzhou's climate change politics, climate governance and green city making
by Prof. Jørgen Delman from the University of Copenhagen
Presentation by Dr. Chris Skinner, Director Product Platforms, Owens Corning, at CAMX on October 16, 2014.
Future market options for alternative energy – wind, geothermal, solar, ocean/tidal, flywheel technology, battery technology, and biofuels – are a growing area of interest for composites and advanced materials businesses. Knowing how to determine which source provides the most promise for composites applications, navigating the regulatory issues, and determining what design, materials, and manufacturing issues should be kept top of mind are discussed during this session.
IPCC, role of IPCC, IPCC AR5, key messages. approach in climate change mitigation, trends of green house gases, mitigation pathways and measures, mitigation policies and institutions,
An Overview of Power Plant CCS and CO2-EOR ProjectsHusen E . Bader
CO2 has been used for many decades in the industrial processes and food manufacturing, including soft drinks.
Likewise, it is an essential component of other everyday items such as fire extinguishers. In very high
concentrations, CO2 like any dense gas, can act as an asphyxiate material, which can be dangerous to humans with
its adverse impact on respiration. Thus, CO2 is captured to minimize risks to humans’ health and the environment. A
general overview of the current carbon capture and storage (CCS) and CO2 based enhanced oil recovery (CO2-EOR)
projects is presented in this paper. This work provides a summary of the current worldwide CCS and CO2-EOR
projects along with their potential benefits. CCS is a process used to capture CO2 that is produced by industrial
facilities. The CCS technology involves CO2 capture, transport and storage. On the other hand, EOR is a generic
term for various techniques to increase recovery from oil fields. The injection of CO2 into underground rock
formation of oil reservoirs in order to improve their recovery is called CO2-EOR.
Research on the Factors that Influence Carbon Emission in China
1. Researchonthe Factors that Influence CarbonEmission inChina
Research on
the Factors
that Influence
Carbon
Emission
in China
Shuang Zheng
2. Research on the Factors that Influence Carbon Emission in China
1
Abstract
Greenhouse effect is a hot topic in recent years all over the world. It is related
with everyone’s daily life. I make the research on the factors that influence
carbon emission in China by doing regression analysis. By finding out that
GDP, energy efficiency and energy structure of China have a significant impact
on carbon emission, I think that the government should emphasize on the
development of advanced technology and the optimization of industrial
structure.
3. Research on the Factors that Influence Carbon Emission in China
2
Contents
1. Introduction .............................................................................................................. 3
1.1 Background........................................................................................................ 3
1.2 Aim..................................................................................................................... 3
2. Research Design...................................................................................................... 4
2.1 Selection of the Dependent and Independent Variables...................................... 4
2.2 Expectation ........................................................................................................ 5
2.3 Data Collection and Processing.......................................................................... 5
2.3.1 Data Collection of Independent Variables ................................................. 5
2.3.2 Calculation of Carbon Emission................................................................ 6
3. Model Establishment and Modification...................................................................... 7
3.1 Function Form Design ........................................................................................ 7
3.1.1 Test for Linearity....................................................................................... 7
3.1.2 Logarithmic Model .................................................................................... 8
3.2 Test for Outliers .................................................................................................. 9
3.3 Regression (1st time) .......................................................................................... 9
3.4 Ramsey Reset Test .......................................................................................... 10
3.5 Regression (2nd time)........................................................................................ 10
3.6 Hypothesis Tests.............................................................................................. 12
3.6.1 Test for Heteroscedasticity...................................................................... 12
3.6.2 Test for Normality.................................................................................... 13
3.6.3 Test for Zero Mean Value........................................................................ 14
3.6.4 Test for Auto-correlation.......................................................................... 14
4. Interpretation.......................................................................................................... 16
5. Conclusion ............................................................................................................. 16
6. Limitations .............................................................................................................. 16
Appendix....................................................................................................................... 18
4. Research on the Factors that Influence Carbon Emission in China
3
1. Introduction
1.1 Background
Recently, the weather condition in Shanghai is so bad that many old people
and children have been to hospitals for asthma, respiratory infection etc. A
research conducted by Peking University indicated that every year more than
8500 people died because of fog and haze in Beijing, Shanghai and Xian. On
December.23, 2013, PM2.5of Shanghai was higher than 600 and fog red
warning was released, which had a great impact on citizens’ life and health.
In addition, greenhouse effect is also a big problem that bothers people all over
the world. The warming weather resulted in the rise of sea level and the
appearance of some vital virus. World’s agriculturemay also be affected
because of desertification andhot weather.
The two circumstances were both largely caused by carbon emission. PM2.5
was closely related to the CO2 produced by heating in winter and industrial
emission. And greenhouse gases like CO2 also contribute to greenhouse
effect. It is time to reduce the emission of carbon, especially CO2.
China consumes about 18% of world total coal consumption every year and it
is the second largest coal consumption country. It is calculated that in 2012,
China released about 2 billion tons CO2. So it is an urgent task for China to
reduce its carbon emission and protect the environment.
1.2 Aim
The aim of the report is to analyze the factors that influence the carbon
emission of China, which may contribute to formulate scientific and reasonable
5. Research on the Factors that Influence Carbon Emission in China
4
policies of energy-saving and emission-reducing.
2. Research Design
To explore the factors that influence carbon emission in China, I decide to
establish a multiple regression model.
2.1 Selection of the Dependent and Independent Variables
In order to choose appropriate variables, I read a lot of literature about study
on the factors that influence carbon emission. Scholars in China, such as Tan
Dan (2008) and DuanYing (2010), improved that the amount of carbon
emission is related to the structure of industry. Xu Dafeng(2010) found that
most of the carbon emission of China is from the second industry. Foreign
scholars have made researches on the influence of social development. For
example, Johan Albrechta, DelphineFrancois, KoenSchoors(2002) analyzed
the carbon emission of four countries from 1960 to 2006 using the Shapley
decomposition methodand found that energy efficiency, economic
development and population growth had large impact on carbon emission.
According to the researches, I finally choose carbon emission (CO2) as the
dependent variable. The following 8 variables are included as independent
variables: GDP (GDP), population (POPU), income level (INCOME), energy
structure (STRU), total export-import volume (NX), industry structure (SEC),
energy efficiency (EFFI) and car production (CAR).
GDP describes the comprehensive economic strength of a country and POPU
indicates the population growth. I use INCOME to measure people’s income
level, which equals to sum ofrural per capita net income and urban per capita
disposable income. I use the ratio of coal consumption to total energy
consumption to measure energy structure (STRU) and energy efficiency (EFFI)
6. Research on the Factors that Influence Carbon Emission in China
5
is valued by the amount of energy consumed per unit of GDP. NX describes
the situation of foreign trade. Industry structure (SEC) is replaced by ratio of
added value of the second industry to GDP. CAR reflects the amount of carbon
generated by cars, which is one of the sources of carbon emission.
2.2 Expectation
With reference to the related literature and theories, I make following
expectations:
(1) The increase of GDP, population, foreign trade and income level will lead to
more carbon emission because the development of society means more
human activities. I think that the increase of GDP should be the main cause
of the growth of carbon emission.
(2) Taking into account the fact that in China, the second industry emits most of
the carbon, I think that the industry structure should also have a
significantly positive influence on carbon emission.
(3) If the ratio of coal consumption to total energy consumption is larger, then
there will be more carbon emission. The more energy is consumed per unit
of GDP, the lower the energy efficiency is, which means more carbon
emission. So the coefficients of STRU and EFFI should both be positive.
(4) Car production should have a large influence on carbon emission because
of the car exhaust.
2.3 Data Collection and Processing
2.3.1 Data Collection of Independent Variables
I collect annual data (1978-2012) of the whole country from the statistics
7. Research on the Factors that Influence Carbon Emission in China
6
database of China economic information network. Our sample size is 35 and
there is no missing data. To eliminate the impact of price changes, I adjust
GDP, rural per capita net income and urban per capita disposable income
using the fixed base price index (1978=100). (See appendix 1)
2.3.2 Calculation of Carbon Emission
With reference to the carbon emissions decomposition model established by
Xu Guoquan, I take the following formula to calculate the annual carbon
emission of China from 1978 to 2012:
In this formula, TC represents the total amount of carbon emission and Ci
represents the carbon emission generated by the ith category of energy. is
the carbon emission index of the ithcategory of energy, is the ratio of the ith
category of energy to total energy and E is the total consumption of energy.
Considering the condition of energy consumption of China, I only take into
account the carbon emission of coal, oil and gas. By reading the literature, I
collect the carbon emission index provided by some research organizations
and use the mean value to do the calculation. (See Table 1)
Table 1 Carbon Emission Index
8. Research on the Factors that Influence Carbon Emission in China
7
Using the carbon emissions decomposition model and the data collected from
the statistics database of China economic information network, I calculate the
amount of carbon emission of China from 1978 to 2012. (See appendix 2)
3. Model Establishment and Modification
After selecting variables and collecting data, I start to establish the regression
model.
3.1 Function Form Design
3.1.1 Test for Linearity
Firstly, I draw some scatter plots of dependent variable and independent
variables and observe the relationship between them. (See Graph 1) I can see
that the independent variables are not linear with the dependent variable,
especially EFFI, SEC and STRU. So I consider establishing a logarithmic
model to meet the requirement of linearity.
Graph 1 Scatter plots
9. Research on the Factors that Influence Carbon Emission in China
8
To find out whether the linear model or the logarithmic model is better, I do the
MWD test. (See appendix 3)
Following is the process:
(1) Estimate the linear model and obtain the estimated CO2 values, that is, ye.
(2) Estimate the logarithmic model and obtain the estimated ln CO2 values,
that is, yee.
(3) Obtain z=log(ye)-yee
(4) Regress CO2 on the independent variables and z.
(5) Obtain zz=exp(yee)-ye
(6) Regress lnCO2 on the independent variables’ logarithmic form and zz.
Under the significance level of 95%, Z is statistically significant and ZZ is not,
so I should reject H0: Y is a linear function of the X’s and should not reject H1:
ln Y is a linear function of the X’s or a log of the X’s.
That is to say, I should establish a logarithmic regression model so I do a
logarithmic transformation to our data. (See appendix 4) Now the dependent
variable is lnCO2, independent variables are lnGDP, lnEFFI, lnCAR,
lnINCOME, lnNX, lnPOPU, lnSEC and lnSTRU.
3.1.2 Logarithmic Model
Following is our logarithmic model:
lnCO2=B0+B1*lnGDP+B2*lnEFFI+B3*lnCAR+B4*lnINCOME+B5*lnNX
+B6*lnPOPU+B7*lnSEC+B8*lnSTRU+μ
In this formula, Bo is the intercept and B1~B8 measures the elasticity of CO2
10. Research on the Factors that Influence Carbon Emission in China
9
with respect to the variables. μ is the stochastic error.
3.2 Test for Outliers
Before doing the regression, I make a box-plot to find out whether there are
outliers in the data or not. (See Graph 2)
Graph 2 Box-plot
3.3 Regression (1st time)
Then I start to do the regression. (See appendix 5) The fitting results are as
follows:
2ln CO = -1.007+0.005*lnNX+0.001*lnCAR-0.053*lnPOPU+0.08*lnINCOME
+0.3*lnSTRU+1.005*lnEFFI+0.076*lnSEC+0.888*lnGDP
Se=(1.785) (0.007) (0.006) (0.144) (0.034) (0.026) (0.014) (0.034) (0.038)
p-value=(0.578) (0.465) (0.839) (0.714) (0.026) (0.000) (0.000) (0.034) (0.000)
R^2=0.999966491
I find that although the R^2 is very high, there are many variables which are
not significant. What’s more, the VIF is very high, especially those of lnGDP
and lnINCOME. So I think that there exists multicollinearity between the
11. Research on the Factors that Influence Carbon Emission in China
10
explanatory variables. What’s more, from the residual scatter plot, I find that
the residual may show some pattern. (See graph 3)
Graph3 Residual Plot
3.4 Ramsey Reset Test
To find out whether the model is correctly specified, I decide to do the Ramsey
reset test. (See appendix 6) The p-value is 0.0593, which indicates that the
model has been well specified. So I think the major problem is that the model is
an over-fitting model, which leads to multicollinearity.
3.5 Regression (2nd time)
I reconsider the model and decide to eliminate the variable lnINCOME
because lnGDP can also reflect the income level to some extent. Then I do the
regression again. (See appendix 7) The results are as follows:
2ln CO = -3.99-0*lnNX+0.007*lnCAR+0.188*lnPOPU+0.301*lnSTRU
+0.997*lnEFFI+0.110*lnSEC+0.967*lnGDP
Se=(1.361) (0.007) (0.006) (0.109) 0.028) (0.015) ( 0.033) (0.018)
12. Research on the Factors that Influence Carbon Emission in China
11
p-value=(0.007) (0.900) (0.235) (0.098) (0.000) (0.000) (0.002) (0.000)
R^2=0.999959
The model is significantly better than the previous one but the VIFs are still
very large. The VIF of lnNX is 402.211. So I eliminate this variable because the
foreign trade condition can also be measured by GDP to some extent and the
coefficient of lnNX is 0.
The results of our new regression are as follows:
2ln CO = -3.846-0.007*lnCAR+0.176*lnPOPU+0.3*lnSTRU+0.996*lnEFFI
+0.108*lnSEC+0.966*lnGDP
Se=(0.731) (0.005) (0.063) (0.027) (0.013) (0.029) (0.016)
p-value=(0.000) (0.224) (0.010) (0.000) (0.000) (0.001) (0.000)
R^2=0.999959
I find that some of the VIFs are still larger than 100 and the coefficient of
lnCAR is negative, which does not meet our original expectation. I think that
the multicollinearity still exists, so I eliminate lnCAR because lnSEC, the
proportion of the second industry, can also reflect the car use condition in
China to some extent.
Then I get another regression result:
2ln CO = -3.547+0.159*lnPOPU+0.311*lnSTRU+0.981*lnEFFI+0.106*lnSEC
+0.952*lnGDP
Se=(0.697) (0.062) (0.025) (0.004) (0.030) (0.012)
p-value=(0.000) (0.016) (0.000) (0.000) (0.001) (0.000)
R^2=0.999957
13. Research on the Factors that Influence Carbon Emission in China
12
Although the variables are all statistically significant, the VIFs of lnPOPU and
lnGDP are still very large, about 100. However, according to the literature I
have found, the population growth and economic growth both have a large
influence on carbon emission. Finally I decide to eliminate lnPOPU because I
think that the influence of population growth on carbon emission is not as large
as that of GDP.
The final regression model is:
2ln CO = -1.825+0.325*lnSTRU+0.982*lnEFFI+0.051*lnSEC+0.983*lnGDP
Se=(0.180) (0.027) (0.005) (0.022) (0.002)
p-value=(0.000) (0.000) (0.000) (0.028) (0.000)
R^2=0.999947
Now all the variables are statistically significant and all the coefficients meet
our original expectation. The VIFs of the independent variables are very small,
approximate 2. I think that this model is a very good estimation of carbon
emission.
3.6 Hypothesis Tests
3.6.1 Test for Heteroscedasticity
To check whether the variance of error term is constant or not, I draw a
residual plot, the residual versus the estimation of the dependent variable.
(See Graph 4)
14. Research on the Factors that Influence Carbon Emission in China
13
Graph 4 Residual Plot
I also do White’s general heteroscedasticity test, the p-value is 0.0751. Under
the significance level of 95%, I should not reject the H0: There is no
heteroscedasticity. (See appendix 8)
Combining the residual plot and the result of White’s general
heteroscedasticity test, I confirm that the variance of error term is constant.
3.6.2 Test for Normality
From the histogram of residual, I find that the error term is approximately
normal. What’s more, the p-value of Jarque-Bera test is 0.47, so I should not
reject the H0: The sample obeys normal distribution, which means that the
normality of the error term distribution is confirmed. (See graph 5)
Graph 5 Histogram of Residual
15. Research on the Factors that Influence Carbon Emission in China
14
3.6.3 Test for Zero Mean Value
Then I draw the residual plot, residual versus time, to check that the error term
has a zero mean value. (See graph 6)
Graph 6 Residual Plot
I find that there is no outliers which are larger than +2se or -2se, so the test for
zero mean value is passed.
3.6.4 Test for Auto-correlation
From graph 5, I find that the residual may have autocorrelation. What’s more,
the Durbin-Watson value of the model is 0.729, lower than the critical dL
(1.160), which means that the error terms are correlated. To apply remedies for
the assumption violation, I use the Cochrane-Orcutt iterative procedure to
modify our regression model until the Durbin-Watson value is larger than dU
(1.803), which means that there is no autocorrelation. (See appendix 9) The
residual plot also indicates that the error term has no auto-correlation.
(See graph 7)
16. Research on the Factors that Influence Carbon Emission in China
15
Graph 7 Residual Plot
The residuals of the modified regression model are more normally distributed
than those of the previous model according to the bell-shaped histogram and
the p-value of Jarque-Bera test which is 0.99. (See graph8)
Graph 8 Histogram of Residual
The modified regression model is:
2ln CO = -2.281+0.985*lnEFFI+0.990*lnGDP+0.038*lnSEC+0.425*lnSTRU
+ [AR (1) = 0.834, AR (2) = - 0.208]
Se=(0.008) (0.004) (0.029) (0.043) (0.230) (0.206) (0.180)
p-value=(0.000) (0.000) (0.198) (0.000) (0.000) (0.000) (0.259)
R^2=0.999972
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4. Interpretation
The modified regression model meets our original expectation that GDP is
positively related with carbon emission and it is the main factor that influences
carbon emission. I find that energy efficiency and energy industry are also
major factors that influence carbon emission. The impact of industry structure
is not so large.
If energy efficiency increases by 1%, which means that the energy consumed
per unit of GDP increases by 1%, then carbon emission will increase by 98.5%.
If GDP increases by 1%, then carbon emission will increase by about 99%. If
ratio of added value of the second industry to GDP increases by 1%, then
carbon emission will increase by 3.8%. If the ratio of coal consumption to total
energy consumption increases 1%, then carbon emission will increase 42.5%.
5. Conclusion
According to our research, I think that the government should pay more
attention to increasing energy efficiency and optimizing energy structure of our
country. For example, technology of energy utilization of China can still be
improved and I should make full use of low carbon energy such as wind.
6. Limitations
However, our model still has some limitations.
Firstly, the sample size is small. Considering that the preferred ratio of
observations to variables is 15:1, I’d better do the regression with a sample
size of more than 60. Now I only have 35 observations.
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Secondly, I handle the problem of multicollinearity by eliminating independent
variables according to their meanings and VIFs. In fact there are some other
ways to solve this problem such as ridge regression analysis and principal
component analysis. It should be better if I can use them.
Thirdly, I find that lnSEC is not statistically significant after modifying the
regression model using Cochrane-Orcutt iterative procedure while this variable
should have a large influence on carbon emission according to researches
done by some scholars.
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3. Process of MWD Test
(1) Linear Model Regression Result
(2) Logarithmic Model Regression Result
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(3) Regression of CO2 on variables and z
(4) Regression of lnCO2 on variables’ logarithmic form and zz
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5. Results of Regression (1st time)
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6. Ramsey Reset Test
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7. Regression (2nd time)
(1) Eliminate lnINCOME
(2) Eliminate lnNX
(3) Eliminate lnCAR
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(4) Eliminate lnPOPU (final model)
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8. White’s general heteroscedasticity test
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9. Cochrane-Orcutt iterative procedure
(1) 1st order
(2) 2nd order