Analysis on the Influence of China’s Energy Consumption on Economic Growth

Bin Liu,Maolin Cheng

doi:10.3390/su11143982

Abstract

Many studies have shown that energy consumption has a great influence on economic growth. This paper divides China’s energy into coal, oil, natural gas and clean energy (hydroenergy, nuclear energy, wind energy and solar energy), and then studies the influences of China’s coal, oil, natural gas and clean energy on economic growth quantitatively using econometric models. This paper uses three methods. The first method is correlative degree analysis. The paper calculates the correlative degrees between four energy consumption and economic growth (GDP), and then compares the influences of four different kinds of energy consumption on economic growth in terms of the correlative degree. The second method is multiplier analysis. The paper uses the lagged variable regression model to calculate four energy consumption’s current multipliers, dynamic multipliers and long-term multipliers for economic growth, and then compares the influences of four kinds of energy consumption on economic growth in terms of marginal effect. The third method is contribution rate analysis. The paper calculates the rates of contribution of four kinds of energy consumption to economic growth and then compares the influences of four energy consumption on economic growth in terms of input and output. The paper makes an empirical analysis on influences of China’s energy consumption on economic growth. Analysis results show that in terms of correlative degree, natural gas has the greatest influence on GDP, followed by clean energy, oil and coal; in terms of the multiplier effect, natural gas has the biggest current multiplier and long-term multiplier, followed by clean energy, oil and coal; in terms of contribution rate, clean energy has the biggest contribution rate, followed by natural gas, oil and coal. Overall, China’s natural gas consumption and clean energy consumption have more influence on economic growth than coal consumption and oil consumption, and show a rising trend.

Highlights

Economists began to study the relationship between the economy and energy in the 1970s
(1) The paper calculates the correlative degrees between four energy consumption and economic gTrohwe tpha(pGeDr Pm)atkoecsoamqpuaarnettihtaetiivnefluanenaclyessisofofnouforuerneenrgeyrgcyoncosunmsupmtipotnioonn’secinofnluomeniccegsroonwethcoinnotmermic s of egcroonwccroGoo(t1mhrr)=rreeifcrTll0aoagh.ttm9riievv1ot3eewph2ddate;hepetfgghoe(GrrreleleDoececwo.PabrlRi)ercntteeugwolslauatcethtoleietvrmnsseeesGpdthaahDeorsegwPepretcaehtcoenhtersdabr.iteneOlttfahwliutesieevcreneOoncre=drGseeDlo0gafP.rt6iefv2oae0euns2rdd;beetRenhgteerwierscgeeoryeRbrnrec=eotlwfnao0steui.ue7vrmn9e4eGpd9nte.DiegorBPrngeeyaeconanbduceeostCcnewosirneusGeomrnm>CpGi=trciDRog0nP>r.o6a1rwanO5ntd2dh>;GthriCes, natural gas has the greatest influence on GDP, followed by clean energy, oil and coal
Results show that the contribution rates of coal, oil, natural gas and clean energy consumption were 8.85%, 14.44%, 14.50% and 16.66%, respectively, from 2000 to 2016

Summary

Introduction

Economists began to study the relationship between the economy and energy in the 1970s. Energy consumption was only considered as a part of capital which could affect economic growth and didn’t attract much attention from researchers. New classical economists considered energy consumption as an intermediate variable generated by production factors, so when constructing the Cobb–Douglas production function for related research, they only considered labor and capital but failed to take energy into consideration as an independent endogenous variable. Researchers began to pay attention to the relationship between economic growth and energy consumption and understood the role of energy consumption in economic growth deeply, in which case it was improper to consider energy consumption as a component of capital. The clean energy industry emerging in the 1970s is a young subject, and existing research mainly focuses on the policies of clean energy development but less on the empirical analysis on data

Methods

Results

Conclusion