Dynamic nexus between transportation, economic growth and environmental degradation in China: Fresh insights from the QARDL approach

The continuous growth of the transport sector and the increase in transportation carbon emissions attract policymakers’ attention. It is of great importance to understand the determinants of pollution from transportation. This study explores the dynamic nexus between transportation, growth, and environmental degradation in China. The QARDL approach is used for the empirical investigation of data series from 1995 to 2018. The findings exposed mixed results in both the long and short run. The result for freight transportation only improves the environment at upper extreme quantiles, while the results are insignificant in the short run. The results show that passenger transportation reduces CO2 emissions at the lower bottom quantiles in the long run, while the results are significant at upper extreme quantiles in the short run. In the case of GDP, the results endorsed the EKC hypothesis in the long run, while in short-run dynamics, the results for GDP2 are found insignificant, which elaborates that China’s economic growth enhances the CO2 emissions. Besides, the quantile causality test showed a bi-directional causality between all variables. The findings of this study provide concrete evidence to the policymakers of China to strengthen the sustainable transportation system by promoting eco-friendly and energy-efficient modes of transportation.