Regional energy-growth nexus and energy conservation policy in China

Yuk Shing Cheng, Raymond Li*, Chi Keung Woo

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    21 Citations (Scopus)

    Abstract

    China's ambitious decarbonization strategy disaggregates the national energy conservation target by province. Using panel data of 30 provinces for 1995–2017, we revisit China's energy-growth nexus that considers the likely cross-section dependence among the provinces within each of China's three regions. Our key finding is a bidirectional causal relationship of energy (natural log of per capita energy consumption) and income (natural log of per capita real GDP) for the Eastern and Central regions and a unidirectional causal relationship from income to energy for the Western region. The Eastern and Central regions’ bidirectional relationship suggests caution in China's energy conservation policy which may decelerate these regions’ economic growth. The Western region's unidirectional relationship suggests promoting energy conservation without adversely affecting this region's economic growth. Hence, the East and Central regions’ conservation effort should be accompanied by cost-effective development of emissions-free renewable resources like hydro, solar and wind for displacing China's fossil-fuel consumption.

    Original languageEnglish
    Article number119414
    JournalEnergy
    Volume217
    Early online date28 Nov 2020
    DOIs
    Publication statusPublished - 15 Feb 2021

    Scopus Subject Areas

    • Civil and Structural Engineering
    • Building and Construction
    • Pollution
    • Mechanical Engineering
    • Industrial and Manufacturing Engineering
    • Electrical and Electronic Engineering

    User-Defined Keywords

    • China's energy policy
    • Intra-region cross-section dependence
    • Regional causality
    • Regional energy-growth nexus

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