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Analysis on the Influence of China’s Energy Consumption on Economic Growth

Author

Listed:
  • Maolin Cheng

    (Department of Statistics, Suzhou University of Science and Technology, Suzhou 215009, China)

  • Bin Liu

    (Department of Finance, Suzhou University of Science and Technology, Suzhou 215009, China)

Abstract

Many studies have shown that energy consumption has a great influence on economic growth. This paper divides China’s energy into coal, oil, natural gas and clean energy (hydroenergy, nuclear energy, wind energy and solar energy), and then studies the influences of China’s coal, oil, natural gas and clean energy on economic growth quantitatively using econometric models. This paper uses three methods. The first method is correlative degree analysis. The paper calculates the correlative degrees between four energy consumption and economic growth (GDP), and then compares the influences of four different kinds of energy consumption on economic growth in terms of the correlative degree. The second method is multiplier analysis. The paper uses the lagged variable regression model to calculate four energy consumption’s current multipliers, dynamic multipliers and long-term multipliers for economic growth, and then compares the influences of four kinds of energy consumption on economic growth in terms of marginal effect. The third method is contribution rate analysis. The paper calculates the rates of contribution of four kinds of energy consumption to economic growth and then compares the influences of four energy consumption on economic growth in terms of input and output. The paper makes an empirical analysis on influences of China’s energy consumption on economic growth. Analysis results show that in terms of correlative degree, natural gas has the greatest influence on GDP, followed by clean energy, oil and coal; in terms of the multiplier effect, natural gas has the biggest current multiplier and long-term multiplier, followed by clean energy, oil and coal; in terms of contribution rate, clean energy has the biggest contribution rate, followed by natural gas, oil and coal. Overall, China’s natural gas consumption and clean energy consumption have more influence on economic growth than coal consumption and oil consumption, and show a rising trend.

Suggested Citation

  • Maolin Cheng & Bin Liu, 2019. "Analysis on the Influence of China’s Energy Consumption on Economic Growth," Sustainability, MDPI, vol. 11(14), pages 1-25, July.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:14:p:3982-:d:250729
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