IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v74y2021ics0301420721003238.html
   My bibliography  Save this article

Determinants of the load capacity factor in China: A novel dynamic ARDL approach for ecological footprint accounting

Author

Listed:
  • Pata, Ugur Korkut
  • Isik, Cem

Abstract

The load capacity factor tracks a certain ecological threshold by comparing biocapacity and ecological footprint, thus enabling a comprehensive research on environmental degradation. It can be observed that the environmental degradation rises with decreasing the load capacity factor. However, until now, researchers have empirically considered environmental issues using ecological footprint, carbon dioxide, sulfur dioxide, nitrogen oxide emissions, and similar indicators. The use of these indicators can lead to the neglect of the supply side of environmental issues. To compensate for this shortcoming, this study aims to investigate the influence of human capital, natural resource rent, per capita income, and energy intensity on the load capacity factor, which focuses on environmental concerns on both the supply and demand sides. In this regard, the study utilizes a recently developed dynamic autoregressive distributed lag (ARDL) simulation model for China from 1981 to 2017. The results of dynamic ARDL demonstrates that an increase in income, energy intensity, and resource rent leads to a decline in the load capacity factor, while human capital improves environmental quality in the long-run. Moreover, according to Narayan and Narayan (2010) approach, the environmental Kuznets curve hypothesis is valid for China because the short-run income elasticity is lower than the long-run elasticity (−0.644 was compared with −0.460). Based on the results, policy recommendations for China's sustainable development are presented.

Suggested Citation

  • Pata, Ugur Korkut & Isik, Cem, 2021. "Determinants of the load capacity factor in China: A novel dynamic ARDL approach for ecological footprint accounting," Resources Policy, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:jrpoli:v:74:y:2021:i:c:s0301420721003238
    DOI: 10.1016/j.resourpol.2021.102313
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420721003238
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2021.102313?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    2. Cem Ișik & Munir Ahmad & Uğur Korkut Pata & Serdar Ongan & Magdalena Radulescu & Festus Fatai Adedoyin & Engin Bayraktaroğlu & Sezi Aydın & Ayse Ongan, 2020. "An Evaluation of the Tourism-Induced Environmental Kuznets Curve (T-EKC) Hypothesis: Evidence from G7 Countries," Sustainability, MDPI, vol. 12(21), pages 1-11, November.
    3. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    4. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    5. Lan, Jing & Munro, Alistair, 2013. "Environmental compliance and human capital: Evidence from Chinese industrial firms," Resource and Energy Economics, Elsevier, vol. 35(4), pages 534-557.
    6. Umar, Bamanga & Alam, Md. Mahmudul & Al-Amin, Abul Quasem, 2021. "Exploring the Contribution of Energy Price to Carbon Emissions in African Countries," OSF Preprints ru4jz, Center for Open Science.
    7. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    8. Robert McNown & Chung Yan Sam & Soo Khoon Goh, 2018. "Bootstrapping the autoregressive distributed lag test for cointegration," Applied Economics, Taylor & Francis Journals, vol. 50(13), pages 1509-1521, March.
    9. Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Roubaud, David & Farhani, Sahbi, 2018. "How economic growth, renewable electricity and natural resources contribute to CO2 emissions?," Energy Policy, Elsevier, vol. 113(C), pages 356-367.
    10. Ugur Korkut Pata, 2021. "Do renewable energy and health expenditures improve load capacity factor in the USA and Japan? A new approach to environmental issues," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1427-1439, December.
    11. Zameer, Hashim & Yasmeen, Humaira & Wang, Rong & Tao, Jing & Malik, Muhammad Nasir, 2020. "An empirical investigation of the coordinated development of natural resources, financial development and ecological efficiency in China," Resources Policy, Elsevier, vol. 65(C).
    12. Chang, Yen-Chiang & Wang, Nannan, 2010. "Environmental regulations and emissions trading in China," Energy Policy, Elsevier, vol. 38(7), pages 3356-3364, July.
    13. Sam, Chung Yan & McNown, Robert & Goh, Soo Khoon, 2019. "An augmented autoregressive distributed lag bounds test for cointegration," Economic Modelling, Elsevier, vol. 80(C), pages 130-141.
    14. Sebastian Kripfganz & Daniel C. Schneider, 2020. "Response Surface Regressions for Critical Value Bounds and Approximate p‐values in Equilibrium Correction Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(6), pages 1456-1481, December.
    15. Charfeddine, Lanouar & Mrabet, Zouhair, 2017. "The impact of economic development and social-political factors on ecological footprint: A panel data analysis for 15 MENA countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 138-154.
    16. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    17. Narayan, Paresh Kumar & Narayan, Seema, 2010. "Carbon dioxide emissions and economic growth: Panel data evidence from developing countries," Energy Policy, Elsevier, vol. 38(1), pages 661-666, January.
    18. Chankrajang, Thanyaporn & Muttarak, Raya, 2017. "Green Returns to Education: Does Schooling Contribute to Pro-Environmental Behaviours? Evidence from Thailand," Ecological Economics, Elsevier, vol. 131(C), pages 434-448.
    19. Pata, Ugur Korkut, 2018. "The influence of coal and noncarbohydrate energy consumption on CO2 emissions: Revisiting the environmental Kuznets curve hypothesis for Turkey," Energy, Elsevier, vol. 160(C), pages 1115-1123.
    20. Wang, Yuan & Zhang, Chen & Lu, Aitong & Li, Li & He, Yanmin & ToJo, Junji & Zhu, Xiaodong, 2017. "A disaggregated analysis of the environmental Kuznets curve for industrial CO2 emissions in China," Applied Energy, Elsevier, vol. 190(C), pages 172-180.
    21. Pata, Ugur Korkut & Caglar, Abdullah Emre, 2021. "Investigating the EKC hypothesis with renewable energy consumption, human capital, globalization and trade openness for China: Evidence from augmented ARDL approach with a structural break," Energy, Elsevier, vol. 216(C).
    22. Soren Jordan & Andrew Q. Philips, 2018. "Cointegration testing and dynamic simulations of autoregressive distributed lag modelsJournal: Stata Journal," Stata Journal, StataCorp LP, vol. 18(4), pages 902-923, December.
    23. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    24. Ahmed, Zahoor & Asghar, Muhammad Mansoor & Malik, Muhammad Nasir & Nawaz, Kishwar, 2020. "Moving towards a sustainable environment: The dynamic linkage between natural resources, human capital, urbanization, economic growth, and ecological footprint in China," Resources Policy, Elsevier, vol. 67(C).
    25. Kangyin Dong & Xiucheng Dong & Cong Dong, 2019. "Determinants of the global and regional CO2 emissions: What causes what and where?," Applied Economics, Taylor & Francis Journals, vol. 51(46), pages 5031-5044, October.
    26. Pata, Ugur Korkut & Aydin, Mucahit & Haouas, Ilham, 2021. "Are natural resources abundance and human development a solution for environmental pressure? Evidence from top ten countries with the largest ecological footprint," Resources Policy, Elsevier, vol. 70(C).
    27. Ouyang, Xiaoling & Lin, Boqiang, 2015. "An analysis of the driving forces of energy-related carbon dioxide emissions in China’s industrial sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 838-849.
    28. Wang, Yuan & Han, Rong & Kubota, Jumpei, 2016. "Is there an Environmental Kuznets Curve for SO2 emissions? A semi-parametric panel data analysis for China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1182-1188.
    29. Peng Li & Yaofu Ouyang & Lina Zhang, 2020. "The nonlinear impact of renewable energy on CO2 emissions: empirical evidence across regions in China," Applied Economics Letters, Taylor & Francis Journals, vol. 27(14), pages 1150-1155, July.
    30. Shahbaz, muhammad & Solarin, Sakiru Adebola & Sbia, Rashid & Bibi, Sadia, 2015. "Does Energy Intensity Contribute to CO2 Emissions? A Trivariate Analysis in Selected African Countries," MPRA Paper 64335, University Library of Munich, Germany, revised 19 Mar 2015.
    31. Zafar, Muhammad Wasif & Zaidi, Syed Anees Haider & Khan, Naveed R. & Mirza, Faisal Mehmood & Hou, Fujun & Kirmani, Syed Ali Ashiq, 2019. "The impact of natural resources, human capital, and foreign direct investment on the ecological footprint: The case of the United States," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    32. Jalil, Abdul & Mahmud, Syed F., 2009. "Environment Kuznets curve for CO2 emissions: A cointegration analysis for China," Energy Policy, Elsevier, vol. 37(12), pages 5167-5172, December.
    33. Muhammad, Shahbaz & Adebola Solarin, Solarin & Ozturk, Ilhan, 2016. "Environmental Kuznets curve hypothesis and the role of globalization in selected African countries," MPRA Paper 69859, University Library of Munich, Germany, revised 04 Mar 2016.
    34. Zhi-Fu Mi & Yi-Ming Wei & Bing Wang & Jing Meng & Zhu Liu & Yuli Shan & Jingru Liu & Dabo Guan, 2017. "Socioeconomic impact assessment of China's CO2 emissions peak prior to 2030," CEEP-BIT Working Papers 103, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pata, Ugur Korkut & Ertugrul, Hasan Murat, 2023. "Do the Kyoto Protocol, geopolitical risks, human capital and natural resources affect the sustainability limit? A new environmental approach based on the LCC hypothesis," Resources Policy, Elsevier, vol. 81(C).
    2. Pata, Ugur Korkut & Caglar, Abdullah Emre, 2021. "Investigating the EKC hypothesis with renewable energy consumption, human capital, globalization and trade openness for China: Evidence from augmented ARDL approach with a structural break," Energy, Elsevier, vol. 216(C).
    3. Hossain, Md. Emran & Islam, Md. Sayemul & Bandyopadhyay, Arunava & Awan, Ashar & Hossain, Mohammad Razib & Rej, Soumen, 2022. "Mexico at the crossroads of natural resource dependence and COP26 pledge: Does technological innovation help?," Resources Policy, Elsevier, vol. 77(C).
    4. Muhammet Daştan & Hakan Eygü, 2024. "An empirical investigation of the link between economic growth, unemployment, and ecological footprint in Turkey: Bridging the EKC and EPC hypotheses," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(7), pages 18957-18988, July.
    5. AM Priyangani Adikari & Haiyun Liu & DMSLB Dissanayake & Manjula Ranagalage, 2023. "Human Capital and Carbon Emissions: The Way forward Reducing Environmental Degradation," Sustainability, MDPI, vol. 15(4), pages 1-17, February.
    6. Ahmed, Zahoor & Asghar, Muhammad Mansoor & Malik, Muhammad Nasir & Nawaz, Kishwar, 2020. "Moving towards a sustainable environment: The dynamic linkage between natural resources, human capital, urbanization, economic growth, and ecological footprint in China," Resources Policy, Elsevier, vol. 67(C).
    7. Ugur Korkut Pata, 2021. "Do renewable energy and health expenditures improve load capacity factor in the USA and Japan? A new approach to environmental issues," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1427-1439, December.
    8. Zhou, Runyu & Abbasi, Kashif Raza & Salem, Sultan & Almulhim, Abdulaziz.I. & Alvarado, Rafael, 2022. "Do natural resources, economic growth, human capital, and urbanization affect the ecological footprint? A modified dynamic ARDL and KRLS approach," Resources Policy, Elsevier, vol. 78(C).
    9. Shokoohi, Zeinab & Dehbidi, Navid Kargar & Tarazkar, Mohammad Hassan, 2022. "Energy intensity, economic growth and environmental quality in populous Middle East countries," Energy, Elsevier, vol. 239(PC).
    10. Soumen Rej & Barnali Nag & Md. Emran Hossain, 2022. "Can Renewable Energy and Export Help in Reducing Ecological Footprint of India? Empirical Evidence from Augmented ARDL Co-Integration and Dynamic ARDL Simulations," Sustainability, MDPI, vol. 14(23), pages 1-21, November.
    11. Long, Hai & Li, Wen-Wei & Otrakçı, Caner, 2023. "Sustaining environment through natural resource and human development: Revisiting EKC curve in China through BARDL," Resources Policy, Elsevier, vol. 85(PB).
    12. Azad Haider & Wimal Rankaduwa & Muhammad Iftikhar ul Husnain & Farzana Shaheen, 2022. "Nexus between Agricultural Land Use, Economic Growth and N 2 O Emissions in Canada: Is There an Environmental Kuznets Curve?," Sustainability, MDPI, vol. 14(14), pages 1-23, July.
    13. Solomon Prince Nathaniel & Festus Bekun & Alimshan Faizulayev, 2021. "Modelling the Impact of Energy Consumption, Natural Resources, and Urbanization on Ecological Footprint in South Africa: Assessing the Moderating Role of Human Capital," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 130-139.
    14. Manuel A. Zambrano‐Monserrate & Mario Andres Fernandez, 2017. "An Environmental Kuznets Curve for N2O emissions in Germany: an ARDL approach," Natural Resources Forum, Blackwell Publishing, vol. 41(2), pages 119-127, May.
    15. Chindo Sulaiman & A. S. Abdul-Rahim, 2018. "Population Growth and CO2 Emission in Nigeria: A Recursive ARDL Approach," SAGE Open, , vol. 8(2), pages 21582440187, April.
    16. Azad Haider & Muhammad Iftikhar ul Husnain & Wimal Rankaduwa & Farzana Shaheen, 2021. "Nexus between Nitrous Oxide Emissions and Agricultural Land Use in Agrarian Economy: An ARDL Bounds Testing Approach," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    17. Musah, Mohammed & Onifade, Stephen Taiwo & Ankrah, Isaac & Gyamfi, Bright Akwasi & Amoako, George Kofi, 2024. "Achieving net-zero emission target in Africa: Are sustainable energy innovations and financialization crucial for environmental sustainability of sub-Saharan African state?," Applied Energy, Elsevier, vol. 364(C).
    18. Shahbaz, Muhammad & Haouas, Ilham & Hoang, Thi Hong Van, 2019. "Economic growth and environmental degradation in Vietnam: Is the environmental Kuznets curve a complete picture?," Emerging Markets Review, Elsevier, vol. 38(C), pages 197-218.
    19. Xin, Yongrong & Ajaz, Tahseen & Shahzad, Mohsin & Luo, Jia, 2023. "How productive capacities influence trade-adjusted resources consumption in China: Testing resource-based EKC," Resources Policy, Elsevier, vol. 81(C).
    20. Danish, & Ulucak, Recep, 2022. "Analyzing energy innovation-emissions nexus in China: A novel dynamic simulation method," Energy, Elsevier, vol. 244(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:74:y:2021:i:c:s0301420721003238. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.