Toward to economic growth without emission growth: The role of urbanization and industrialization in China and India

The contradiction between economic growth and carbon emissions in China and India is the most prominent in the world. Both countries have faced tremendous pressures to curb carbon emissions, because they are major source of new added emission sources. Meanwhile, both countries have faced greater pressures to achieve industrialization and urbanization in order to eradicate poverty. Better understanding the decoupling status and its drivers can serve to develop effective policy to achieve economic growth without an increase in emission. This paper comparatively analyses the decoupling effect of the economic growth from the carbon emissions as well as its drivers during the period 1980-2014 in China and India. The Tapio decoupling model was used to analyze the decoupling status, and the co-integration theory and the impulse response functions were applied to investigate the effects of urbanization, industrialization, per capita GDP and carbon emission intensity to decoupling. The results show that China mainly performed a weak decoupling of economic growth from carbon emissions in 1980-2014, while the decoupling status of India was no regular. In China, carbon emission intensity is the biggest contributor of decoupling, followed by urbanization, per capita GDP, and industrialization. In India, the biggest driver of decoupling is also the carbon emission intensity, followed by urbanization, industrialization, and per capita GDP. Therefore, improving energy efficiency is the best policy to toward economic growth without emission growth in China and India.