Investigating the environmental Kuznets curve between economic growth and chemical fertilizer surpluses in China: a provincial panel cointegration approach

Abstract

This study investigated the relationship between fertilizer nitrogen (N) and phosphate (P) surpluses and economic development on the regional level in China. With a balanced panel dataset covering 30 provinces of mainland China from 1988 to 2019, we employed panel cointegrating polynomial regression (CPR) analysis using fully modified OLS (FM-OLS) estimators. Our results suggested that all provinces exhibit a long-run cointegrated relationship between fertilizer surpluses and real per capita gross regional product (GRP). A total of 22 provinces out of 30 showed a significant inverted U-shaped environmental Kuznets curve (EKC). Among those, 14 provinces are considered to have reached the peak and 8 provinces are considered to be before the peak. The group-mean turning points on the EKC are CNY 7022, CNY 9726, CNY 4697, CNY 3749, and CNY 5588 per capita GRP (1978 = 100) for the Northeast, Northcentral, Middle, and lower reaches of the Yangtze River, Southwest and Northwest China, respectively. The overall turning point of China is CNY 6705 per capita real gross domestic product (GDP), which was reached in circa 2012. This shows a general improvement of chemical fertilizer management in China. However, six provinces still exhibit linear growth in fertilizer surpluses when the economy grows. These regions are characterized by high cash-crop ratios and are mostly located along the southeast coast. Therefore, more effort and attention should be given to these regions to promote further fertilizer reduction. At the same time, nutrient use efficiencies should be improved, especially for cash crops such as fruit and vegetables.