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Articles

An Empirical Study on Electricity Consumption, Economic Growth and CO2 Emission-Panel Data of China

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  • Economics and Management School, Wuhan University, Wuhan 430072, China

Received date: 2016-11-18

  Revised date: 2017-03-22

  Online published: 2018-05-24

Abstract

Global climate change has attracted wide attention of the international community, countries around the world have studied climate change to develop the corresponding energy policy. China as the world's largest carbon emitter, the power industry is an important basic industry for the development of the national economy,exploring the causal relationship between electricity consumption,economic growth and CO2 emissions has important practical significance for the relevant authorities in China in developing low-carbon economy and energy policy planning for power sector.
In this paper, the causal relationship between electricity consumption,economic growth and CO2 emissions is discussed based on the panel data of WDI database during 1990-2013 by using econometric techniques,including cointegration test,Granger causality test and impulse response functions. First, the unit root is used to test whether the time series data is stable, because only the stable time series data can be cointegration test and Granger causality test. Then the VAR model is used to explore the long-term equilibrium relationships between electricity consumption, economic growth and CO2 emissions and the short-term interactions between variables. Finally, the impulse response functions is used to analyze the effect of stochastic perturbation on the other variables in the model.
The empirical results show that there exists aco-integration relationship between electricity consumption,economic growth and CO2 emissions,which means long-term equilibrium relationship.While there does not exists Granger causality between electricity consumption and CO2 emissions,economic growth and CO2 emissions,and there exists a two-way Granger causality between economic growth and electricity consumption. It is concluded from the VAR model that the lag of electricity consumption has a positive effect on current economic growth and CO2 emissions;the lag of economic growth has a negative effect on current electricity consumption and CO2 emissions, while the lag of CO2 emissions has no significant impact on current economic growth. Which implies that the previous period economic growth promotes the current economic growth in the short term, as the environmental Kuznets curve described it will stimulate technological innovation and improve energy efficiency in the long term,reducing the current CO2 emissions as results.
Based on the empirical results, some advice on China's low-carbon economy development and energy policy planning is provided for the power sector. Electricity consumption will increase the amount of CO2 emissions, but not directly promote economic growth. Therefore, in order to reduce CO2 emissions while maintaining economic growth, it is necessary to improve the efficiency of energy consumption, through technological progress or industrial structure adjustment, making per unit of electricity consumption reduction, thus "low energy consumption, low emission, high yield" green development can be achieved.in addition,it can also actively promote the power industry structure optimization or to find new energy to develop low-carbon economy.

Cite this article

PAN Wei, XIONG Jian-wu . An Empirical Study on Electricity Consumption, Economic Growth and CO2 Emission-Panel Data of China[J]. Chinese Journal of Management Science, 2018 , 26(3) : 152 -159 . DOI: 10.16381/j.cnki.issn1003-207x.2018.03.016

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