Estimating the environmental Kuznets curve and its influencing factors of CO2 emissions: Insights from development stages and rebound effects

Abstract

Revealing the heterogeneity in Environmental Kuznets Curve (EKC) is crucial for tackling environmental challenges while fostering sustainable development. Anchored in the EKC hypothesis and using quantile regression approaches, this study explores the varied effects of socioeconomic factors on CO₂ emissions for cities at different development stages in the Pearl River Delta (PRD) region from 2000 to 2020. In addition, the impact of rebound effects of technological advancements on CO₂ emissions are also explored across cities. We find that an N-shaped relationship exists between GDP per capita and CO₂ emissions, supporting the EKC hypothesis in the PRD urban clusters. Urbanization significantly increases CO₂ emissions in cities with low to moderate emissions (e.g., a 1% increase in urbanization leads to a 0.963% rise in emissions in cities at the 25th quantile), while its impact diminishes in high-emission cities (e.g., resulting in a 0.199% reduction in cities at the 95th quantile).Additionally, openness and foreign trade exert a significant inhibitory effect on CO₂ emissions in all cities; and a rebound effect is identified in cities with medium and high emission levels (above the 50th percentile) in the PRD region. By analyzing the drivers of CO₂ emissions, taking into account development stages and rebound effects, this study highlights the heterogeneity in how different factors impact CO2 emissions across cities at varying stages of development within the PRD urban cluster. These findings emphasize that policymakers must recognize this heterogeneity when formulating emission reduction and development strategies. Tailoring policies to the specific economic, spatial, and industrial dynamics of cities at different stages within urban agglomerations is essential to effectively address the sustainable development.