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Does artificial intelligence improve energy efficiency? Evidence from provincial data in China

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Listed:
  • Li, Xin
  • Li, Shiyuan
  • Cao, Jifeng
  • Spulbar, Andrei Cristian

Abstract

As global energy demand rises and environmental awareness increases, improving energy efficiency (EE) has become crucial to achieving sustainable development. This paper employs a two-way fixed effects panel model using data from 30 provinces in China, from 2000 to 2021, to investigate the impact of artificial intelligence (AI) on EE. The research results reveal that advancements in AI have greatly facilitated the improvement of EE. Furthermore, green technology innovation capability plays a positive moderating role between AI and EE. A heterogeneity analysis indicates that the impact of AI on EE is more significant in economically-developed regions. In energy-deficient regions, AI can significantly improve EE, whereas conversely, in energy-abundant regions, AI's impact on EE is negative. Further analysis using a spatial Durbin model (SDM) confirms the presence of spatial effects in the impact of AI on EE. This paper aims to expand the scholarly understanding of the relationship between AI and EE and provides empirical evidence for decision-makers during this critical period of energy transition. By delving into the potential of AI to enhance EE, the paper seeks to illuminate specific strategies and approaches for policymakers and industry participants.

Suggested Citation

  • Li, Xin & Li, Shiyuan & Cao, Jifeng & Spulbar, Andrei Cristian, 2025. "Does artificial intelligence improve energy efficiency? Evidence from provincial data in China," Energy Economics, Elsevier, vol. 142(C).
    • Handle: RePEc:eee:eneeco:v:142:y:2025:i:c:s0140988324008582
    DOI: 10.1016/j.eneco.2024.108149
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    More about this item

    Keywords

    Artificial intelligence; Energy efficiency; Green technology innovation;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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