Dynamic Relationship between Green Economy and Energy Utilization Level: Evidence from China

Abstract

Based on the panel data from 30 provinces in China from 2010 to 2020, this paper employs the panel vector autoregression (PVAR) model to investigate the dynamic relationship between a green economy and energy utilization level. The results show that: (1) the green economic development level and energy utilization level of 30 provinces in China have been continuously enhancing in recent years, the increase in green economic development level is higher than energy utilization level, and the geographical characteristics of both levels are significant, decreasing from East to West; (2) the causal relationship between the green economy and the energy utilization level has passed the Granger test; the two have formed a relatively high-level balanced relationship over a long period, showing a benign and orderly development trend; (3) the green economy generates a positive pulse response on energy utilization level in the initial period, but the impulse response weakens in the period of lag 1, entailing the relationship needs to be further strengthened in the long term; (4) in the process of continuous enhancement of energy utilization level, it is difficult to drive economic benefits due to high input costs in the initial stage, but it can form a two-way interaction relationship with a green economy as time goes by.