Empirical Study on the Relationship between Economic Growth and Carbon Emissions in Resource-dependent Cities Based on Vector Autoregression Model

Abstract The contradiction between economy and environment is a great challenge for resource-dependent city in the process of transition to low carbon economy. According to economic development and energy consumption data of Zibo city, 1999-2009, empirical research of dynamic relationship between economic growth and carbon emissions is made based on VAR (Vector autoregression) model with the use of impulse response functions and variance decomposition. It is concluded that in resource-dependent cities per capita GDP changes lead to Granger cause changes in carbon emissions; economic growth and carbon emissions do not exist inverted U-shaped relationship in the dynamic sense; per capita GDP contribute highly to the interpretation of predictive variance decomposition of carbon emissions, carbon reduction targets constraint is bound to cause the expense of economic growth to some extent. Therefore, the study suggested that in resource-dependent cities carbon reduction potential and the impact on the economy in determining carbon target constraints should be fully considered, the attention to harmonious development between economic growth and carbon emission reductions should be paid.