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Has China's coal consumption actually reached its peak? National and regional analysis considering cross-sectional dependence and heterogeneity

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  • Qiao, Hui
  • Chen, Siyu
  • Dong, Xiucheng
  • Dong, Kangyin

Abstract

To investigate whether China's coal consumption has actually peaked, this study tests the national and regional coal Kuznets curve (CKC) hypothesis by using a panel dataset of 30 provinces covering 2000 to 2016. To fully capture the trends of coal consumption at the national, regional, and provincial levels, this study proposes a novel regional division method based on coal dependence and economic level. Considering the potential cross-sectional dependence and slope homogeneity, the newly developed methods allowing for heterogeneous slope coefficients are employed. The whole panel and subpanel results validate the CKC hypothesis for China, and province-specific results are mixed. The subpanel results reveal that only in the coal-dependent developing region has the peak of coal consumption not been reached, and for other regions, coal consumption displays a downward trend along with gross domestic product (GDP) increases. Furthermore, the province-specific results suggest that coal consumption will continue to increase slightly in certain provinces. This study implies that to reduce coal consumption, the coal-dependent developing region and provinces with a future turning point should act with great urgency to achieve a balance of economic growth and environmental responsibility. In addition, policymakers formulating coal consumption reduction policy in China must consider the remarkable differences across regions and provinces.

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  • Qiao, Hui & Chen, Siyu & Dong, Xiucheng & Dong, Kangyin, 2019. "Has China's coal consumption actually reached its peak? National and regional analysis considering cross-sectional dependence and heterogeneity," Energy Economics, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:eneeco:v:84:y:2019:i:c:s0140988319302981
    DOI: 10.1016/j.eneco.2019.104509
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    Keywords

    Peak coal consumption; Coal Kuznets curve; Cross-sectional dependence and heterogeneity; Regional analysis; China;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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