Abstract
The empirical conclusions regarding the relationship between energy price and energy efficiency are relatively mixed. This paper systematically examines the influence of energy price on energy efficiency in China based on data from 30 provinces between 2003 and 2017, using linear and nonlinear effect analysis. We found that the impact of energy price on energy efficiency in China was positive in general. However, there existed heterogeneous effects of energy price on energy efficiency in various regions, and the effect differed with differences in energy efficiency levels based on the panel quantile regression analysis. Finally, the nonlinear effect analysis based on the panel threshold model indicated that the effect of energy price on energy efficiency increased with the rise of the environmental regulation level and economic growth rate, while it decreased with the ascent of the degree of energy price distortion and economic development level. In particular, when the value of a region’s economic development level and economic growth rate was within a certain range, the impact was not statistically significant. Overall, these findings contribute to a deeper understanding regarding the effect of energy price on energy efficiency in China.
Highlights
Energy efficiency improvement and the sustainable development of developing countries require a better understanding of the linkage between energy price and energy efficiency
We contribute to the empirical literature as follows: on the one hand, different from existing literature which focuses on the linear effects investigation, besides the analysis of the linear relationship, the current study examines the nonlinear impact by exploring the role of four factors in moderating the price–efficiency link based on the panel threshold regression model which can provide a deeper understanding of the relationship between them
FE-IV1 and RE-IV1 are the fixed-effect instrumental variables model and the random-effect instrumental variables model, where the one-year lagged value of the log of energy price was selected as the instrument variable
Summary
Energy efficiency improvement and the sustainable development of developing countries require a better understanding of the linkage between energy price and energy efficiency. As the first developing country in the world in terms of its size, has made great achievements in its economic development, while at the same time, its energy constraint problems become more and more serious. The energy consumption per unit of GDP (i.e., energy intensity (the higher the energy intensity, the lower the energy efficiency)) in China in 2015 was 0.027 mtoe per 100 million US dollars, 1.48 times that of the world average level (data are from the World Bank and calculated by the authors). This statistic suggests that China’s energy efficiency is quite low. Energy price, which can directly influence energy efficiency through price adjustment mechanism and substitution effect of production factor, as well as indirectly affect energy efficiency through promoting technology advancement and optimizing industrial structure, is supposed to play an important role in the improvement of energy efficiency
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