How asymmetric is the response of CO2 emissions to economic restructuring in China? Evidence from NARDL approach.

China has experienced a remarkable economic progression since the implementation of its reform and opening-up policy. Yet, it is crucial to confront the challenge of achieving sustainable and high-quality economic growth while concurrently enhancing environmental quality. This study adopts the nonlinear autoregressive distributed lag (NARDL) approach to explore how economic structure adjustments impacted China's carbon dioxide (CO 2) emissions from 1980 to 2020. The empirical results reveal some asymmetries in the influence of agricultural progression, industrial development, and foreign direct investment (FDI) on CO 2 emissions in short and long-term contexts. Specifically, in the long run, a 10% positive change in agricultural development increases CO 2 emissions by 1.55%, nearly double the mitigation effect of a negative change (0.78%); a 10% positive (negative) change in industrialization is associated with a 0.6% decrease (0.23% increase) in CO 2 emissions; a 10% positive change in FDI results in a 2.30% increase in CO 2 emissions, supporting the "Pollution Haven" hypothesis, while a 10% negative change contributes to a 4.51% increase. In the short run, a 10% negative change in agricultural and industrial sectors increases CO 2 emissions by 0.27% and 0.21%, respectively, while a 10% negative change in FDI leads to a 2.0% increase in CO 2 emissions. Additionally, short-term positive changes in agricultural and industrial sectors and positive shocks in FDI exert negligible influence on CO 2 emissions. These findings highlight the necessity of economic structure transformation and refinement of current environmental policies. [Display omitted] • The asymmetric response of CO 2 emissions to some critical variables is analyzed. • Agricultural growth cannot reduce CO 2 emissions in both the short and long run. • Industrial development can mitigate CO 2 emissions in the long run. • The "Pollution Haven" hypothesis on FDI is validated in China. • Foreign trade positively correlates with CO 2 emissions in China. [ABSTRACT FROM AUTHOR]