A Study On The Relationship Between Net Energy Yield And Economic Growth In China

Since the reform and opening,economy of China has maintained high-speed growth with a high-energy,high-pollution extensive pattern of development.Under the both constraints of limited resources and environmental protection,energy supply is crucial to economic growth.The energy production process requires energy input,so after removing the necessary energy input,the remaining energy output,which is the net energy yield,is the real valuable energy for social economic growth.However,rising energy costs make net energy yield unsustainable.Therefore,the study of Chinese net energy yield and its relationship with economic growth of China are important for understanding the characteristics and sustainability of economic growth in China.Firstly,this paper uses the input-output model to analyze energy costs during the energy production process,and then quantifies environmental pollution control investment of China into energy input innovatively through energy intensity to obtain accurate net energy yield data of China.The result shows that net energy yield of China continued to increase from 1990 to 2012,but the growth rate slowed down due to rising energy costs,and the gap between energy consumption and net energy widened gradually.Then,this paper fits the energy production function to investigate which can explain economic growth better,net energy or energy consumption.The model result shows that the net energy fits China's economic growth better.Finally,the paper uses linear exponential production function to solve the output elasticity of the capital,labor and energy elements and its trend in 1990 to 2012.The results show that the net energy has replaced the capital factor as the most sensitive factor of economic growth.