Spatial economic dependency in the Environmental Kuznets Curve of carbon dioxide: The case of China

Abstract Modeling the driving factors and spatial nexus of carbon dioxide ( CO 2 ) emissions may be complicated by the fact that trans-provincial transportation of energy- and pollution-intensive products, maybe or to a large extent, transports their emissions to the exporting provinces due to the frequent occurrence of bilateral economic-trade ties and the asynchrony of economic development in China. In this paper, a spatial econometric tool is utilized to examine to what extent CO 2 spillover depends on provinces’ bilateral geographical and economic linkages. Besides, different subgroups are built to estimate and compare the degree of spatial interactions among regions under five definitions of spatial dependency, to determine how the spatial effects of CO 2 emissions behave among our selected subgroups. The results demonstrate an N-shaped relationship, either before or after grouping, which shows a strong correlation against the effectiveness of the Environmental Kuznets Curve (EKC) hypothesis. Additionally, the results show that economic linkage significantly outperforms all the other linkages in capturing the spatial dependencies between provinces, and the spatial dependence of CO 2 emissions in the high-energy structure group is far greater than that in the low-energy structure group. Our results suggest that even though considering the spatial aggregation effect, the economic relations behind CO 2 emissions can also capture the spatial features more accurately, providing valuable references for policymaking and carbon emission reduction.