Forecast And Analysis Of The Relationship Between China’s Renewable Energy Consumption And Economic Growth

With China’s rapid economic growth, the demand for energy of manufacturingand high energy-consuming industries is growing, the problems caused by the highconsumption of energy are beginning to appear, such as environmental pollution,sustainable use of energy, alternative energy, and so on. Renewable energy isreceiving widespread attention for its renewability with no pollution or Little damageto the environment. In this context, it’s of great significance to study the relationshipbetween renewable energy consumption and economic growth, to predict the trend ofChina’s energy consumption and economic growth, for the formulation of China’senergy policy and development plan of energy-related industries.Based on the theory of energy consumption and economic growth, the paperconstructs an endogenous growth model which contains the consumption ofrenewable energy, proposes the following three hypotheses:(1) energy consumptionhas a positive incentive effect on economic growth.(2) non-renewable energy stockswill eventually run out, you can ease the contradiction between economic growth andenergy demand and supply by increasing the regeneration rate of renewable energy.(3)changes in energy efficiency and the growth rate of the economy mainly depend onthe technological innovation capability, the proportion of renewable energy in theenergy system, as well as the output elasticity of productive labor input.And then the paper uses the time series data from1991to2011, to do anempirical analysis of the relationship between capital stock, productive labor,renewable energy consumption, traditional fossil energy consumption and GDPgrowth in China. Then it comes to the following conclusions: the impact on output ofnon-renewable energy consumption and renewable energy consumption is different,there is a two-way causal relationship between the non-renewable energyconsumption and real GDP, GDP growth is not the main driver of renewable energy consumption, while economic growth will be affected by renewable energyconsumption, that is one-way Granger causality of renewable energy consumption toreal GDP. Furthermore, by using GM (1,1) model with data from2001to2010, thepaper makes a prediction of the growing speed of the proportion of renewable energyconsumption in energy consumption and economic growth in China in2020. Finally,taking into account China’s specific national conditions, the paper makes somesuggestions.