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Impact of International Oil Price on Energy Conservation and Emission Reduction in China

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  • Jian Chai

    (School of Economics & Management, Xidian University, Xi’an 710126, China
    International Business School, Shaanxi Normal University, Xi’an 710119, China
    Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Youhong Zhou

    (International Business School, Shaanxi Normal University, Xi’an 710119, China)

  • Ting Liang

    (International Business School, Shaanxi Normal University, Xi’an 710119, China)

  • Limin Xing

    (International Business School, Shaanxi Normal University, Xi’an 710119, China)

  • Kin Keung Lai

    (Department of Management Sciences, City University of Hong Kong, Hong Kong)

Abstract

In the context of “new normal” economy and frequent “haze”, the strategy of energy conservation and emission reduction aiming to lower costs and reduce pollution is currently still a major strategic direction in China and the world, and will remain so for some time in the future. This paper uses the annual data of West Texas Intermediate (WTI) crude oil price in 1987–2014 as samples. We firstly present the direction and mechanism of the influence of oil price change on total consumption of every kind of energy by path analysis, and then consider establishing a Structural Vector Autoregression model of energy conservation and emission reduction in three statuses. Research shows that if the international oil price increases by 1%, the energy consumption per GDP and carbon dioxide emission increase by 0.092% and 0.053% respectively in the corresponding period. In the status of high energy consumption and high emission, if the international oil price increases by 1%, the energy consumption per GDP and carbon dioxide emission increase by 0.043% and 0.065% respectively in the corresponding period. In the status of low energy consumption and low emission, if the international oil price increases by 1%, the energy consumption per GDP per unit increases by 0.067% and carbon dioxide emission decreases by 0.085% in the corresponding period.

Suggested Citation

  • Jian Chai & Youhong Zhou & Ting Liang & Limin Xing & Kin Keung Lai, 2016. "Impact of International Oil Price on Energy Conservation and Emission Reduction in China," Sustainability, MDPI, vol. 8(6), pages 1-17, May.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:6:p:508-:d:70864
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