Unraveling the determinants of transportation carbon emissions in China

Koay, Zhi Qi and Lim, Zhong Jun (2025) Unraveling the determinants of transportation carbon emissions in China. Final Year Project, UTAR.

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Abstract

China is the world’s largest carbon dioxide emitter and has recorded the fastest transportation growth rate among the top-emitting countries. The rapid expansion of its economies and urbanization have significantly increased the demand for transport services, leading to a surge in private car ownership and overall transport activity, thereby contributing to rising carbon emissions. This study investigates how explanatory variables such as urbanization, GDP per capita and renewable energy influence the transportation carbon emission, with particular focus on existence of the Environmental Kuznets Curve (EKC) hypothesis in China over the 38-year period from 1985 to 2023. Data for all variables were collected from the World Bank and Our World in Data. The study employs the Autoregressive Distributed Lag (ARDL) approach to examine the long-run relationship with robustness checks conducted using such as Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS) and Canonical Cointegration Regression (CCR). The empirical results showing that GDP per capita has significantly negative long-run relationship with transport carbon emission, indicating that the EKC hypothesis does not hold for China’s transport sector. Urbanization is found to be positively associated with emissions whereas renewable energy consumption shows a significant negative effect. All these results provide critical policy implications toward policymakers to achieve China’s dual carbon goals of peaking emissions by 2023 and reaching carbon neutrality by 2060.

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