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Macro-Economic Impact of Policies for Controlling Fossil Energy Consumption in China

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  • Fang Yang

    (Research School for Southeast Asian Studies, Xiamen University, Xiamen 361005, China
    Center for Southeast Asian Studies, Xiamen University, Xiamen 361005, China)

  • Jie Dian

    (Graduate Institute for Taiwan Studies, Xiamen University, Xiamen 361005, China)

Abstract

This paper analyzes the macro-economic impact of controlling fossil energy consumption in China by using a social accounting matrix framework. The empirical results show that, first, restricting the exploitation of fossil energy resources will lead to a decline in the output of other production activities, thereby reducing the factor income and the living standards of residents. Second, improving energy efficiency can promote increased output in other production sectors, and raise factor returns and residents’ living standards. Third, raising the price of energy products will result in higher costs of the entire society. The stronger the dependence on the energy sector, the greater the increase in the industrial cost. Therefore, the government should increase investment in energy efficiency, keep to energy intensity constraints, restrict the extraction amount of energy resources, and reasonably control energy prices based on market environmental factors.

Suggested Citation

  • Fang Yang & Jie Dian, 2022. "Macro-Economic Impact of Policies for Controlling Fossil Energy Consumption in China," Energies, MDPI, vol. 15(3), pages 1-19, January.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:3:p:1051-:d:739146
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    References listed on IDEAS

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    1. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    2. Tang, Chor Foon & Tan, Bee Wah & Ozturk, Ilhan, 2016. "Energy consumption and economic growth in Vietnam," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1506-1514.
    3. Yi Hu & Dongmei Guo & Mingxi Wang & Xi Zhang & Shouyang Wang, 2015. "The Relationship between Energy Consumption and Economic Growth: Evidence from China’s Industrial Sectors," Energies, MDPI, vol. 8(9), pages 1-15, August.
    4. Acheampong, Alex O., 2018. "Economic growth, CO2 emissions and energy consumption: What causes what and where?," Energy Economics, Elsevier, vol. 74(C), pages 677-692.
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    Cited by:

    1. Sun, Yiqun & Ji, Hao & Cai, Xiurong & Li, Jiangchen, 2023. "Joint extreme risk of energy prices-evidence from European energy markets," Finance Research Letters, Elsevier, vol. 56(C).

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