Exploring decoupling relationship between ICT investments and energy consumption in China's provinces: Factors and policy implications

Abstract

Prior studies on ICT and energy consumption in China lack exploration of the decoupling relationship and reasons and fail to propose policy implications for provinces based on energy and ICT investment features. We investigate the decoupling relationship between ICT investments and energy consumption in China's 30 provinces, exploring factors impacting decoupling using the Generalized Divisia Index Method decomposition analysis, including ICT investment scale, revenue scale, gross investment scale, energy intensity of ICT investment scale, energy intensity of ICT revenue, energy intensity of gross investment, ICT investment structure, and efficiency. We find most Chinese provinces showed weak decoupling between energy consumption and ICT investment from 2006 to 2020, except for Beijing, Tianjin, Sichuan, and Hubei which achieved strong decoupling during the 13th Five-Year-Plan period. In many provinces, ICT investment, ICT revenue, and gross fixed asset investment led to an increase in the decoupling index, but energy intensities of these factors were found to significantly reduce the decoupling index. Furthermore, we use K-Means clustering to classify China's provinces based on four ICT-related factors and propose targeted energy-saving policies for each cluster, considering their respective ICT investment characteristics.