The Impact of Technological Progress in the Energy Sector on Carbon Emissions: An Empirical Analysis from China

Abstract

This paper investigates the relationship between technological progress in the energy sector and carbon emissions based on the Environment Kuznets Curve (EKC) and data from China during the period of 1995–2012. Our study confirms that the situation in China conforms to the EKC hypothesis and presents the inverted U-curve relationship between per capita income and carbon emissions. Furthermore, the inflection point will be reached in at least five years. Then, we use research and development (R & D) investment in the energy industry as the quantitative indicator of its technological progress to test its impact on carbon emissions. Our results show that technological progress in the energy sector contributes to a reduction in carbon emissions with hysteresis. Furthermore, our results show that energy efficiency improvements are also helpful in reducing carbon emissions. However, climate policy and change in industrial structure increase carbon emissions to some extent. Our conclusion demonstrates that currently, China is not achieving economic growth and pollution reduction simultaneously. To further achieve the goal of carbon reduction, the government should increase investment in the energy industry research and improve energy efficiency.