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Reconsidering the environmental Kuznets curve, pollution haven, and pollution halo hypotheses with carbon efficiency in China: A dynamic ARDL simulations approach
(Springer, 2023) Ozkan, Oktay; Coban, Mustafa Necati; Iortile, Iormom Bruce; Usman, Ojonugwa
Given a new perspective on the environmental hypothesis, this paper systematically investigates the validity of the envi ronmental Kuznets curve (EKC), pollution haven, and pollution halo hypotheses using carbon efciency as the dependent variable. Applying the dynamic autoregressive distributed lag simulations based on the annual time series data over the period 1990–2019, the study found that real GDP per capita has negative efects on China’s environmental quality both in the short and long run, whereas the square of real GDP per capita has positive impacts. This validates the EKC hypothesis for China. Furthermore, foreign direct investment has negative efects on environmental quality in China, implying that the case of China exemplifes the pollution haven hypothesis and not the pollution halo hypothesis. The empirical results also demonstrate that energy efciency and trade openness improve China’s environmental quality both in the short run and long run. These fndings, therefore, provide insights into achieving the ambitious climate goals in China by 2050.