Research on the Relationship Between Energy Consumption, Economic Growth and Carbon Emissions in China——Based on The System GMM Model

Abstract

Under the current climate change and economic fluctuations, studying the relationship between economic growth, energy consumption and carbon emissions has become a vital issue for the high-quality economic development of various countries. This paper selects the provincial data from 2004 to 2019, and constructs a dynamic simultaneous equation system. Based on the analysis of the impact of economic growth and energy consumption on carbon emissions, the system GMM estimation is used to empirically test the dynamic relationship between the three and analyze it. The heterogeneity of the relationship at the regional level was analyzed, and then a fixed-effects model was used to test the robustness. The results show that: (1) Under the full sample, energy consumption drives the increase of carbon emissions, and economic growth and industrial upgrading are conducive to realizing carbon emission reduction goals. (2) There is a two-way causal relationship between energy consumption and carbon emissions. (3) There is a two-way relationship between energy consumption, economic growth, and carbon emission in the middle and eastern regions. The economic growth in eastern China drives the increase in carbon emissions. In the central region, carbon emission has a certain restraint effect on economic growth. The model has a certain stability, and provides a useful reference for the coordinated development of China's economic growth, energy consumption, and carbon emissions.