An Empirical Research on Relationship between Economic Growth and New Energy Consumption in China

Abstract

This article took the lead to study the relationship between new energy consumption, traditional energy consumption and economic growth in China from 1990 to 2012, employed methods of regressive model and Granger causality estimation. Econometric software—Eviews 6.0 was used during the calculation process. The empirical study showed that both new energy consumption and traditional energy consumption could promote economic growth in China. However the influences of new energy consumption and traditional energy consumption on Chinese economic growth have the asymmetry. The effect of new energy consumption on economic growth was lower than that of traditional energy consumption. In the short term, new energy consumption was the Granger causality of economic growth in China. However economic growth was also the Granger causality of new energy consumption in the long term. Therefore, in order to achieve sustainable development and low carbon economy in China, it is imperative to make new energy sources play a more important role in economic growth and replace traditional energy sources gradually.