Abstract: This paper examined the cointegration and the causal relationship between economic growth, carbon emissions, energy consumption,labour and capital in China for the period 1970–2010 by applying the cointegration approach developed by Pesaran et al.(2001) and using the modi?ed version of the Granger causality test proposed by Toda and Yamamoto (1995). Our empirical results suggest that there was a short-run relationship between the variables with a positive and a signi?cant relationship between capital and economic growth and between labour and economic growth,but the effect of energy consumption and carbon emissions on economic growth is not signi?cant. we found a long-run relationship among the variables with a positive and a statistically signi?cant relationship between capital and economic growth, but the effect of energy consumption,labour and carbon emissions on economic growth is not signi?cant. Further, applying a modi?ed version of the Granger causality test we also found a bi-directional causality running from carbon emissions to economic growth and from energy consumption to economic growth all with a feedback,And we also found a unidirectional causality running from energy consumption to carbon emissions without a feedback.The econometric evidence suggests that China has to sacri?ce economic growth or reduce its energy consumption per unit of output or both in order to reduce carbon emissions.however, the government of China can purse conservative energy policy and carbon emissions reduction policy in the long run without impeding economic growth.

Key words: carbon emission, economic growth, bounds test, TY causality