Regional energy-growth nexus and energy conservation policy in China

Yuk-Shing CHENG, Raymond LI, Chi Keung WOO

Research output: Contribution to journalArticlespeer-review

1 Citation (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. Copyright © 2020 Elsevier Ltd. All rights reserved.
Original languageEnglish
Article number119414
JournalEnergy
Volume217
Early online date28 Nov 2020
DOIs
Publication statusPublished - 15 Feb 2021

Citation

Cheng, Y.-S., Li, R., & Woo, C.-K. (2021). Regional energy-growth nexus and energy conservation policy in China. Energy, 217. Retrieved from https://doi.org/10.1016/j.energy.2020.119414

Keywords

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

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