In my latest post about climate change, I argued that China’s unique economic system explains a big chunk of the country’s carbon dioxide (CO2) emissions, and by extension of the world’s CO2 emissions. In particular, I made a link with monetary policy by pointing out that credit supply by the People’s Bank of China (PBoC) lied behind the housing and infrastructure construction boom that has taken place in China. Today’s post will explore that phenomenon further.
In an earlier post, I made the point that CO2 emissions were tightly coupled to economic growth, and that this had to do with our reliance on fossil fuels for producing the goods and services that make up GDP. In this new post, I will provide more detail on where those CO2 emissions come from. And as you will see, some of the results can be rather surprising.