Impact of urbanization on energy related CO2 emission at different development levels: Regional difference in China based on panel estimation

We examined the influence of urbanization on CO2 emission at different development levels employing the stochastic impacts by regression on population, affluence and technology (STIRPAT) model on provincial panel data from 1995 to 2013 for China. To investigate regional differences based on development levels in the effects of urbanization on CO2 emission, we divided the 29 provinces of China into three regions according to their per capita real GDP at constant value (1990 = 100). The panel estimation for the whole dataset and the three regions showed an inverted U relationship between urbanization and CO2 emission in the major regions of China. Specifically, the effects of urbanization vary significantly across the regions. In region 2 and region 3, a threshold level was identified, beyond which the emission urbanization elasticity was negative, and further increases in the urbanization rate did not contribute to higher emissions. However, in region 1, only population and affluence, rather than urbanization, were significant factors affecting CO2 emissions. In addition, the results did not confirm the environmental Kuznets Curve relationship between income and CO2 emission, where CO2 emission increases monotonically with income. We propose a series of policy implications based on these outcomes to help realize emission reduction targets better.