School of Economics and Finance

No. 659: Long-term Nexus of Industrial Pollution and Income in China

Duo Qin , Queen Mary, University of London

February 1, 2010

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This study examines the long-run relationship between industrial pollution and income in China using provincial panel data. Four types of pollutants are modelled: waste water, solid wastes, soot and SO2 emission. Two types of income effects are considered: the scale and growth effects. The study finds little evidence of inverse U shape curves as postulated by EKC models; pollutant emissions may go positively or negatively with income irrespective of income levels whereas certain sign of alleviation in pollutant concentration due to income growth is discernible; trade is found to be insignificant while the hazardous nature of pollutants appears to be an important factor for heterogeneity in the income effect estimates; the heterogeneity cautions us against simple panel model specification

J.E.L classification codes: C51, O53, Q53, Q56

Keywords:Environmental Kuznets curve, Pollution, Economic growth, Trade, Heterogeneity