Research On Causality Between Energy Consumption And Economic Growth In Beijing Based On Evidence From Cross-Industry Data

Energy is an important resource of survival and development of human society, energy becomes an important economic and social development constraints. These years, Beijing has a rapid development in economic. There is suitable adjustment in economic structure and economic layout, meanwhile the way of economic development also has certain transformation. They are of great practical significance to accelerate the sustained, rapid and healthy and harmonious economic development in Beijing. Along with fast economic growth, Beijing has been consuming more and more energy these years. Because there are a lot of problems on energy development and usage, it will be a realistic problem how to do the reduction in energy-saving work and arrange sustainable development in Beijing:By studying the relationship between energy consumption and economic development in Beijing, and analyzing influencing factors of energy consumption, we can get the method of saving energy in Beijing.This paper applies the most recently developed panel unit root, heterogeneous panel cointegration and panel-based error correction models to investigate the causal relationship between energy consumption and economic growth for three industries in Beijing during the period of1980-2009. The empirical results indicate that there is bidirectional Granger causality in the short run, but unidirectional Granger causality running from energy consumption to economic growth in the long run.This paper attempts to identify and quantify the underlying driving forces for three industries which affect change of aggregated energy consumption in Beijing during the period2000-2009and for seventeen industries during2005-2009. By using decomposition technique of LMDI, the change in aggregated energy consumption is decomposed into the contributions from three factors:output effect, structure effect and intensity effect. The production effect means that the economic growth contributes to the change of energy use, the structure effect is that the adjustments of industry structure contribute to the change of energy consumption, and intensity effect implies that the improvement in energy usage contributes to the change of energy consumption. The empirical results indicate that the production effect plays a significant positive role in increasing energy consumption, while the structure and intensity effects negatively contribute to energy consumption increase. However, the production effect outweighs the sum of structure and intensity effects, and therefore the aggregate energy consumption increased in the study period. Energy saving is a main direction in energy development of Beijing. In the end,this article discussed the policy suggestion of energy saving from the adjustment of industrial structure and the adjustment of energy structure, and so on.