Study On The Relationship Of China’s Renewable Energy And Economic Growth

Energy is one of the fundamental materials for the development of economy and society and also the basic protection for the development of national economy and people’s living. After the reform and opening up, China gets a rapid economic development, in which traditional fossil energy plays an important role. But several financial crises in recent years reflected the country’s economic development is unsustainability. The reason is that energy consumption patterns based on fossil fuels makes the carrying capacity of our environment and resources reaches the limits. At this stage China needs more effective energy structure adjustment and transformation of existing energy patterns to change the mode of economic development. All in all, the issue of China’s economic development is essentially energy sustainability.The paper firstly reviews the related research on energy consumption and economic growth, and analyzes the law of traditional energy and renewable energy development. The time series of China’s energy consumption structures are divided into four stages and the Markov transition probability models are built. The results show that the processes of energy consumption structure transition from mode1to mode3are gentle, without any essential changes. The processes of energy consumption structure transition from mode3to mode4are active which form a new energy movement pattern. In the new pattern renewable energy developed gradually and its importance is revealed.The paper joins the renewable energy into Cobb-Douglas function and analyzes China’s renewable energy and economic growth through cointegration Analysis and vector error correction model. The results show that capital stock, labor, traditional energy and renewable energy affect economic growth in short term. The contribution of traditional fossil energy to economic growth will become increasingly weak in long term. Development of renewable energy is not only to give economy a new growth excitement, but also to achieve the sustainable development of China’s economy.The paper tries to put forward the pertinent suggestions in the conclusion by conducting a further study of the regional differences between China’s renewable energy and economic growth relation. During zoning,30provinces, cities and autonomous regions of China are re-zoned based on the high, medium and lower energy efficiency with mostly concerned energy saving and consumption reduction as target and unit GDP energy consumption index for grouping. After that, the panel data model is established for three regions after re-zoning for calculation. The results indicate that China’s renewable energy development differs greatly in different regions, and its role on regional economic growth is very different. The verified result also indicates that resource environment in different regions shall be utilized in a manner that is suitable for local condition, and development of the renewable energy in the regions shall be accelerated as much as possible.Finally, this paper puts forward policy recommendations according to the energy regulations, economic development and technology reform.