Gasoline to Diesel Consumption Ratio: A New Socioeconomic Indicator of Carbon Dioxide Emissions in China

Abstract

In recent years, gross domestic product (GDP) has grown rapidly in China, but the growth rate of carbon dioxide (CO2) emissions has begun to decline. Some scholars have put forward the environmental Kuznets curve (EKC) hypothesis for CO2 emissions in China. This paper utilized the panel data of 30 provinces in China from 1997 to 2016 to verify the EKC hypothesis. To explore the real reasons behind the EKC, the index gasoline to diesel consumption ratio (GDCR) was introduced in this paper. The regression results showed that CO2 emissions and GDP form an inverted U-shaped curve. This means that the EKC hypothesis holds. The regression results also showed that a 1% GDCR increase was coupled with a 0.118186% or 0.114056% CO2 emission decrease with the panel fully modified ordinary least squares or panel dynamic ordinary least squares method, respectively. This means that CO2 emissions negatively correlate with GDCR. From the discussion of this paper, the growth rate reduction of CO2 emissions is caused by the economic transition in China. As changes of GDCR can, from a special perspective, reflect the economic transition, and as GDCR is negatively correlated with CO2 emissions, GDCR can sometimes be used as a new socioeconomic indicator of carbon dioxide emissions in China.