Revisiting the linkages between economic growth, human capital and environmental quality

Various anthropogenic activities that cause the release of greenhouse gases have increased the problems caused by climate change. The increasing necessity of mitigating the damaging impacts of worldwide warming draws attention to the environmental degrading effects of fossil fuels. This empirical research explores the relationship among China’s human capital (lhc), GDP growth (lgdp), energy intensity (lei) and environmental degradation (lco2) by using the data from 1990 to 2019. In this study, macroeconomic data of China is analyzed; the Bayer - Hanck test is employed in the analysis of cointegration, and the Toda - Yamamoto test is conducted for causality analysis. The following are the study’s findings: the cointegration analysis shows that there exist a cointegrated relationship between lco2, lhc, lgdp and lei. In other words, it shows that the factors have a cointegrated relationship. According to the outcomes of FMOLS analysis, increases in energy intensity, GDP growth, and human capital increase carbon dioxide releases in the long term. As evidenced by the findings, improvement in energy efficiency is associated with favorable outcomes for the environment, though economic expansion and the augmentation of human capital are linked to adverse effects on environmental conditions. The Toda - Yamamoto causality test has yielded results indicating the presence of causality links between human capital and carbon emissions, as well as between human capital and energy intensity. Furthermore, it has been observed that the former variable exerts a unidirectional influence on the latter. There is also a unidirectional causality from all variables to carbon emissions, GDP growth and energy intensity, respectively