Study On The Dynamic Relationship Between Economic Growth, Energy Consumption And Carbon Emissions Of China

Climate change is a major global challenge to face. China as the world’s largestenergy producer and consumer, also the second largest carbon emission’s country,should find a way to solve the urgently problem which is how to balance therelationship between economic growths, energy consumption and environmentalpollution. Now our country is into the late-industrialization period, the traditional modeof Economic Growth is therefore under enormous pressure from public opinion at homeand abroad for its low-use, high pollution and high consumption. In order to reduce theemission of carbon and encourage the economic growth, our country has madecontinous efforts in recent years. At the beginning of the “11th five-year plan”, ourgovernment has clearly put forward an energy intensity target, asking the energyconsumption per unit of gross domestic product to20%lower than2005at the end ofthe “11th five-year plan”. Not only has that, in the beginning of the “12th five-yearplan”, the government announced a clear quantitative target of the carbon emissions,which decide to make the carbon dioxide emissions per unit of GDP fell40%to45%lower than the volum of2005in2020. Changing the aim from controlling the energyintensity to controlling the carbon dioxide emissions is the qualitative change in energysaving and emissions reduction policy of China. And from these, we can see thedetermination and perseverance of China to solve the climate change. On basis ofbofore, this paper analyses the relationship between economic growth, energyconsumption, and carbon emissions of China in order to provide basis for China’senergy saving andemission reduction policy.Firstly, this paper analyses the current situation of economic growth, energyconsumption and carbon emissions of China based on the classifications of sustainabledevelopment,“3E” system and some relevant theories. Then the paper analyses thelong-term and short-term relationship between economic growth, energy consumptionand carbon emissions by using the data from1971to2008through unit root, Jonhansencointegration, granger causality test and impulse response function. Finally, this paperputs forward some policy suggestions on the basis of the above study, hoping to providea little help for changing economic growth mode from extensive to intensiverestructuring and improving the quality of economic growth in China.The main conclusions are as follow: (1) Since the era of reform and opening-up, the economy of our country is rapiddevelopment, especially the second industry, however the traditional model of highinvestment, high consumption, and high pollution development has become a bottleneckof a sustainable road, in order to countinue the miracle of China’s economic growth, weneed to find a low carbon economy development path immediately.(2) There is an interactive relationship between economic growth, energyconsumption and carbon emissions. Energy consumption is one of the main factors ofeconomic growth, meaning the increase of energy consumption can promote economicgrowth. Not only that, energy consumption also the main reason for the carbon dioxideemissions, so the increase of energy consumption will aggravate environment pollution.(3) Basing on the data from1978to2008, using the variables of GDP, energyconsumption, carbon emission, population size and the actual total investment in fixedassets for an empirical analysis, we find some interesting results. The Granger causalitytest shows that in the short term, the population size and energy consumption are theone-way Granger reason of GDP, the energy consumption are the one-way Grangerreason of carbon emission. The impulse response function shows that in the long run,the three variables have a positive influence to each other.(4) Dealing with the relationship between economic, energy and carbon dioxideemissions lies in a low carbon economy development path. The advices andsuggenstons include: enhancing economic structure, promoting industrial development,improving energy efficiency, insisting on technology innovation, improving theenvironmental standards, and implementing the market mechanism of carbon tax and soon.