How to reduce energy intensity in China's heavy industry—Evidence from a seemingly uncorrelated regression

Abstract

Abstract With rapid development and large scale urbanization, China's environmental and resource constraints are becoming increasingly severe. Compared to other industries, China's heavy industry is energy-intensive and emission-intensive, which exerts pressure on energy conservation policies. In this paper, by establishing a theoretical model of the impact factors of energy intensity, we investigate the effects of energy prices, ownership structure, and industrial concentration and R&D investment on the energy intensity of China's heavy industry, and seemingly unrelated regression model was used in the estimation of corresponding coefficients. The results show that increase in energy prices, decrease in state-owned enterprises and increase in industrial concentration may reduce the energy intensity of the industry. Also, the study points to evidence that an increase in R&D investment may reduce the oil intensity of heavy industry.