The impact of hydropower energy consumption on economic growth and CO₂ emissions in China

The present study empirically investigates the impact of hydropower energy consumption on economic growth and CO₂ emissions in China, spanning the period 1965-2016. Using the ARDL bounds testing approach to cointegration, this study confirms the existence of a long-run relationship among the variables. Moreover, hydropower energy consumption has a positive impact on economic growth, while CO₂ emissions have a long-run negative impact on economic growth. However, economic growth and CO₂ emissions have a positive impact on hydropower energy consumption. Further, the study failed to provide a support of the environmental Kuznets curve (EKC) hypothesis for China. The Granger causality test reveals that there is a unidirectional causality running from hydropower energy consumption to economic growth. Furthermore, there is a bidirectional causality among the hydropower energy consumption, economic growth, and CO₂ emissions in the long run. Given these findings, we argue that hydropower energy consumption is considered as the driving force to enhance the economic growth in China.