IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v168y2016icp672-682.html
   My bibliography  Save this article

Identifying the determinants of energy intensity in China: A Bayesian averaging approach

Author

Listed:
  • Zhang, Dayong
  • Cao, Hong
  • Wei, Yi-Ming

Abstract

Facing serious energy constraints and environmental challenges, policy makers in China have set up clear targets to reduce energy intensity in order to secure a sustainable economic growth; however, it is unclear in theory what the determining forces are. The empirical evidence, although intensively discussed in the literature, also remain divided in opinion. This paper contributes to the existing literature full of heated debates using a Bayesian averaging approach to identify robust determinants of energy intensity in China. Using provincial level data, key contributors that help explain the level of energy intensity across China are found. By ranking the relative importance of explanatory variables according to their posterior inclusion probabilities, this study can also offer support to policy makers in designing intensity reduction policies. It is suggested that policies should focus on those robust and relatively more important factors such as fiscal expenditure, infrastructure and economic structure.

Suggested Citation

  • Zhang, Dayong & Cao, Hong & Wei, Yi-Ming, 2016. "Identifying the determinants of energy intensity in China: A Bayesian averaging approach," Applied Energy, Elsevier, vol. 168(C), pages 672-682.
    • Handle: RePEc:eee:appene:v:168:y:2016:i:c:p:672-682
    DOI: 10.1016/j.apenergy.2016.01.134
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261916301222
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2016.01.134?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hatzigeorgiou, Emmanouil & Polatidis, Heracles & Haralambopoulos, Dias, 2011. "CO2 emissions, GDP and energy intensity: A multivariate cointegration and causality analysis for Greece, 1977-2007," Applied Energy, Elsevier, vol. 88(4), pages 1377-1385, April.
    2. Fang, Guochang & Tian, Lixin & Fu, Min & Sun, Mei, 2013. "The impacts of carbon tax on energy intensity and economic growth – A dynamic evolution analysis on the case of China," Applied Energy, Elsevier, vol. 110(C), pages 17-28.
    3. Chai, Jian & Guo, Ju-E & Wang, Shou-Yang & Lai, Kin Keung, 2009. "Why does energy intensity fluctuate in China?," Energy Policy, Elsevier, vol. 37(12), pages 5717-5731, December.
    4. Elliott, Robert J.R. & Sun, Puyang & Chen, Siyang, 2013. "Energy intensity and foreign direct investment: A Chinese city-level study," Energy Economics, Elsevier, vol. 40(C), pages 484-494.
    5. Moosa, Imad A. & Cardak, Buly A., 2006. "The determinants of foreign direct investment: An extreme bounds analysis," Journal of Multinational Financial Management, Elsevier, vol. 16(2), pages 199-211, April.
    6. Liao, Hua & Fan, Ying & Wei, Yi-Ming, 2007. "What induced China's energy intensity to fluctuate: 1997-2006?," Energy Policy, Elsevier, vol. 35(9), pages 4640-4649, September.
    7. Jones, Donald W., 1991. "How urbanization affects energy-use in developing countries," Energy Policy, Elsevier, vol. 19(7), pages 621-630, September.
    8. Donald W. Jones, 1989. "Urbanization and Energy Use In Economic Development," The Energy Journal, , vol. 10(4), pages 29-45, October.
    9. Yan Dong & Kui-Wai Li & Dayong Zhang, 2011. "Determinants of Chinese and American Outward Investment," Chinese Economy, Taylor & Francis Journals, vol. 44(2), pages 58-77, March.
    10. McAleer, Michael & Pagan, Adrian R & Volker, Paul A, 1985. "What Will Take the Con out of Econometrics?," American Economic Review, American Economic Association, vol. 75(3), pages 293-307, June.
    11. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    12. Richard F. Garbaccio & Mun S. Ho & Dale W. Jorgenson, 1999. "Why Has the Energy-Output Ratio Fallen in China?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 63-91.
    13. Wang, Ce & Liao, Hua & Pan, Su-Yan & Zhao, Lu-Tao & Wei, Yi-Ming, 2014. "The fluctuations of China’s energy intensity: Biased technical change," Applied Energy, Elsevier, vol. 135(C), pages 407-414.
    14. Wu, Yanrui, 2012. "Energy intensity and its determinants in China's regional economies," Energy Policy, Elsevier, vol. 41(C), pages 703-711.
    15. Robert J R Elliott & Puyang Sun & Tong Zhu, 2014. "Urbanization and Energy Intensity: A Province-level Study for China," Discussion Papers 14-05, Department of Economics, University of Birmingham.
    16. Timma, Lelde & Zoss, Toms & Blumberga, Dagnija, 2016. "Life after the financial crisis. Energy intensity and energy use decomposition on sectorial level in Latvia," Applied Energy, Elsevier, vol. 162(C), pages 1586-1592.
    17. Li, Yi & Sun, Linyan & Feng, Taiwen & Zhu, Chunyan, 2013. "How to reduce energy intensity in China: A regional comparison perspective," Energy Policy, Elsevier, vol. 61(C), pages 513-522.
    18. Yu, Huayi, 2012. "The influential factors of China's regional energy intensity and its spatial linkages: 1988–2007," Energy Policy, Elsevier, vol. 45(C), pages 583-593.
    19. Yuxiang, Karl & Chen, Zhongchang, 2010. "Government expenditure and energy intensity in China," Energy Policy, Elsevier, vol. 38(2), pages 691-694, February.
    20. Zhao, Xiaoli & Ma, Chunbo & Hong, Dongyue, 2010. "Why did China's energy intensity increase during 1998-2006: Decomposition and policy analysis," Energy Policy, Elsevier, vol. 38(3), pages 1379-1388, March.
    21. Fisher-Vanden, Karen & Jefferson, Gary H. & Liu, Hongmei & Tao, Quan, 2004. "What is driving China's decline in energy intensity?," Resource and Energy Economics, Elsevier, vol. 26(1), pages 77-97, March.
    22. Herrerias, M.J. & Cuadros, A. & Orts, V., 2013. "Energy intensity and investment ownership across Chinese provinces," Energy Economics, Elsevier, vol. 36(C), pages 286-298.
    23. Leamer, Edward E, 1983. "Let's Take the Con Out of Econometrics," American Economic Review, American Economic Association, vol. 73(1), pages 31-43, March.
    24. Richard B. Howarth & Lee Schipper & Bo Andersson, 1993. "The Structure and Intensity of Energy Use: Trends in Five OECD Nations," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 27-46.
    25. Song, Feng & Zheng, Xinye, 2012. "What drives the change in China's energy intensity: Combining decomposition analysis and econometric analysis at the provincial level," Energy Policy, Elsevier, vol. 51(C), pages 445-453.
    26. Ma, Chunbo & Stern, David I., 2008. "China's changing energy intensity trend: A decomposition analysis," Energy Economics, Elsevier, vol. 30(3), pages 1037-1053, May.
    27. Granger, Clive W. J. & Uhlig, Harald F., 1990. "Reasonable extreme-bounds analysis," Journal of Econometrics, Elsevier, vol. 44(1-2), pages 159-170.
    28. Lin, Boqiang & Du, Kerui, 2014. "Decomposing energy intensity change: A combination of index decomposition analysis and production-theoretical decomposition analysis," Applied Energy, Elsevier, vol. 129(C), pages 158-165.
    29. Krey, Volker & O'Neill, Brian C. & van Ruijven, Bas & Chaturvedi, Vaibhav & Daioglou, Vassilis & Eom, Jiyong & Jiang, Leiwen & Nagai, Yu & Pachauri, Shonali & Ren, Xiaolin, 2012. "Urban and rural energy use and carbon dioxide emissions in Asia," Energy Economics, Elsevier, vol. 34(S3), pages 272-283.
    30. Ma, Hengyun & Oxley, Les & Gibson, John, 2009. "Substitution possibilities and determinants of energy intensity for China," Energy Policy, Elsevier, vol. 37(5), pages 1793-1804, May.
    31. Gilbert E. Metcalf, 2008. "An Empirical Analysis of Energy Intensity and Its Determinants at the State Level," The Energy Journal, , vol. 29(3), pages 1-26, July.
    32. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
    33. Sadorsky, Perry, 2013. "Do urbanization and industrialization affect energy intensity in developing countries?," Energy Economics, Elsevier, vol. 37(C), pages 52-59.
    34. Cagno, Enrico & Trianni, Andrea, 2013. "Exploring drivers for energy efficiency within small- and medium-sized enterprises: First evidences from Italian manufacturing enterprises," Applied Energy, Elsevier, vol. 104(C), pages 276-285.
    35. Herrerias, M.J. & Cuadros, A. & Luo, D., 2016. "Foreign versus indigenous innovation and energy intensity: Further research across Chinese regions," Applied Energy, Elsevier, vol. 162(C), pages 1374-1384.
    36. Leamer, Edward E & Leonard, Herman B, 1983. "Reporting the Fragility of Regression Estimates," The Review of Economics and Statistics, MIT Press, vol. 65(2), pages 306-317, May.
    37. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
    38. Feng, Taiwen & Sun, Linyan & Zhang, Ying, 2009. "The relationship between energy consumption structure, economic structure and energy intensity in China," Energy Policy, Elsevier, vol. 37(12), pages 5475-5483, December.
    39. Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, vol. 75(3), pages 308-313, June.
    40. Fernández González, P., 2015. "Exploring energy efficiency in several European countries. An attribution analysis of the Divisia structural change index," Applied Energy, Elsevier, vol. 137(C), pages 364-374.
    41. Poumanyvong, Phetkeo & Kaneko, Shinji, 2010. "Does urbanization lead to less energy use and lower CO2 emissions? A cross-country analysis," Ecological Economics, Elsevier, vol. 70(2), pages 434-444, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Dayong & Li, Jun & Ji, Qiang, 2020. "Does better access to credit help reduce energy intensity in China? Evidence from manufacturing firms," Energy Policy, Elsevier, vol. 145(C).
    2. Gutiérrez-Pedrero, María Jesús & Tarancón, Miguel Ángel & del Río, Pablo & Alcántara, Vicent, 2018. "Analysing the drivers of the intensity of electricity consumption of non-residential sectors in Europe," Applied Energy, Elsevier, vol. 211(C), pages 743-754.
    3. Lin, Boqiang & Zhou, Yicheng, 2021. "Does fiscal decentralization improve energy and environmental performance? New perspective on vertical fiscal imbalance," Applied Energy, Elsevier, vol. 302(C).
    4. Jian Chai & Ying Jin, 2020. "The Dynamic Impacts of Oil Price on China’s Natural Gas Consumption under the Change of Global Oil Market Patterns: An Analysis from the Perspective of Total Consumption and Structure," Energies, MDPI, vol. 13(4), pages 1-16, February.
    5. Ji, Qiang & Zhang, Dayong, 2019. "How much does financial development contribute to renewable energy growth and upgrading of energy structure in China?," Energy Policy, Elsevier, vol. 128(C), pages 114-124.
    6. Hongyun Han & Shu Wu, 2018. "Structural Change and Its Impact on the Energy Intensity of Agricultural Sector in China," Sustainability, MDPI, vol. 10(12), pages 1-23, December.
    7. David Guan & Ubaldo Comite & Muhammad Safdar Sial & Asma Salman & Boyao Zhang & Stefan B. Gunnlaugsson & Urszula Mentel & Grzegorz Mentel, 2021. "The Impact of Renewable Energy Sources on Financial Development, and Economic Growth: The Empirical Evidence from an Emerging Economy," Energies, MDPI, vol. 14(23), pages 1-13, December.
    8. Shemelis Kebede Hundie & Megersa Debela Daksa, 2019. "Does energy-environmental Kuznets curve hold for Ethiopia? The relationship between energy intensity and economic growth," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-21, December.
    9. Qiang Du & Yi Li & Libiao Bai, 2017. "The Energy Rebound Effect for the Construction Industry: Empirical Evidence from China," Sustainability, MDPI, vol. 9(5), pages 1-11, May.
    10. Jin, Taeyoung, 2022. "Impact of heat and electricity consumption on energy intensity: A panel data analysis," Energy, Elsevier, vol. 239(PA).
    11. Zhang, Tong & Shi, Xunpeng & Zhang, Dayong & Xiao, Junji, 2019. "Socio-economic development and electricity access in developing economies: A long-run model averaging approach," Energy Policy, Elsevier, vol. 132(C), pages 223-231.
    12. Tang, Pengcheng & Yang, Shuwang & Fu, Shuke, 2018. "Do political incentive affects China's land transfer in energy-intensive industries?," Energy, Elsevier, vol. 164(C), pages 550-559.
    13. Azhgaliyeva, Dina & Liu, Yang & Liddle, Brantley, 2020. "An empirical analysis of energy intensity and the role of policy instruments," Energy Policy, Elsevier, vol. 145(C).
    14. Wang, Ying & Zhang, Dayong & Ji, Qiang & Shi, Xunpeng, 2020. "Regional renewable energy development in China: A multidimensional assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 124(C).
    15. Chao Bi & Minna Jia & Jingjing Zeng, 2019. "Nonlinear Effect of Public Infrastructure on Energy Intensity in China: A Panel Smooth Transition Regression Approach," Sustainability, MDPI, vol. 11(3), pages 1-21, January.
    16. Liangliang Liu & Wenqing Zhang, 2022. "Vertical fiscal imbalance and energy intensity in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(2), pages 509-526, October.
    17. Li, Yaya & Cobbinah, Joana & Abban, Olivier Joseph & Veglianti, Eleonora, 2023. "Does green manufacturing technology innovation decrease energy intensity for sustainable development?," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1010-1025.
    18. Sha, Yezhou & Zhang, Ping & Wang, Yiru & Xu, Yifan, 2022. "Capital market opening and green innovation——Evidence from Shanghai-Hong Kong stock connect and the Shenzhen-Hong Kong stock connect," Energy Economics, Elsevier, vol. 111(C).
    19. Yu, Weihua & Liang, Wenjing & Yao, Xin, 2024. "The effect of the county-to-district conversion policy on energy efficiency of enterprises: Evidence from China," Energy Economics, Elsevier, vol. 134(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yan, Huijie, 2015. "Provincial energy intensity in China: The role of urbanization," Energy Policy, Elsevier, vol. 86(C), pages 635-650.
    2. Dayong Zhang and David C. Broadstock, 2016. "Club Convergence in the Energy Intensity of China," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    3. Elliott, Robert J.R. & Sun, Puyang & Zhu, Tong, 2017. "The direct and indirect effect of urbanization on energy intensity: A province-level study for China," Energy, Elsevier, vol. 123(C), pages 677-692.
    4. Jiang, Lei & Folmer, Henk & Ji, Minhe, 2014. "The drivers of energy intensity in China: A spatial panel data approach," China Economic Review, Elsevier, vol. 31(C), pages 351-360.
    5. Ma, Ben, 2015. "Does urbanization affect energy intensities across provinces in China?Long-run elasticities estimation using dynamic panels with heterogeneous slopes," Energy Economics, Elsevier, vol. 49(C), pages 390-401.
    6. Robert J R Elliott & Puyang Sun & Tong Zhu, 2014. "Urbanization and Energy Intensity: A Province-level Study for China," Discussion Papers 14-05, Department of Economics, University of Birmingham.
    7. Huang, Junbing & Du, Dan & Tao, Qizhi, 2017. "An analysis of technological factors and energy intensity in China," Energy Policy, Elsevier, vol. 109(C), pages 1-9.
    8. Yang, Guangfei & Li, Wenli & Wang, Jianliang & Zhang, Dongqing, 2016. "A comparative study on the influential factors of China's provincial energy intensity," Energy Policy, Elsevier, vol. 88(C), pages 74-85.
    9. Adom, Philip Kofi, 2015. "Business cycle and economic-wide energy intensity: The implications for energy conservation policy in Algeria," Energy, Elsevier, vol. 88(C), pages 334-350.
    10. Yulan Lv & Wei Chen & Jianquan Cheng, 2019. "Direct and Indirect Effects of Urbanization on Energy Intensity in Chinese Cities: A Regional Heterogeneity Analysis," Sustainability, MDPI, vol. 11(11), pages 1-20, June.
    11. Wu, Shu & Ding, Song, 2021. "Efficiency improvement, structural change, and energy intensity reduction: Evidence from Chinese agricultural sector," Energy Economics, Elsevier, vol. 99(C).
    12. Hong, Junjie & Shi, Fangyuan & Zheng, Yuhan, 2023. "Does network infrastructure construction reduce energy intensity? Based on the “Broadband China” strategy," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    13. Wu, Yanrui, 2012. "Energy intensity and its determinants in China's regional economies," Energy Policy, Elsevier, vol. 41(C), pages 703-711.
    14. Lv, Yulan & Chen, Wei & Cheng, Jianquan, 2020. "Effects of urbanization on energy efficiency in China: New evidence from short run and long run efficiency models," Energy Policy, Elsevier, vol. 147(C).
    15. Huang, Junbing & Hao, Yu & Lei, Hongyan, 2018. "Indigenous versus foreign innovation and energy intensity in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 1721-1729.
    16. Huang, Junbing & Chen, Xiang, 2020. "Domestic R&D activities, technology absorption ability, and energy intensity in China," Energy Policy, Elsevier, vol. 138(C).
    17. Lei Jiang & Minhe Ji, 2016. "China’s Energy Intensity, Determinants and Spatial Effects," Sustainability, MDPI, vol. 8(6), pages 1-15, June.
    18. Hongyun Han & Shu Wu, 2018. "Structural Change and Its Impact on the Energy Intensity of Agricultural Sector in China," Sustainability, MDPI, vol. 10(12), pages 1-23, December.
    19. Chen, Xiude & Qin, Quande & Wei, Y.-M., 2016. "Energy productivity and Chinese local officials’ promotions: Evidence from provincial governors," Energy Policy, Elsevier, vol. 95(C), pages 103-112.
    20. Adom, Philip Kofi & Adams, Samuel, 2018. "Energy savings in Nigeria. Is there a way of escape from energy inefficiency?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2421-2430.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:168:y:2016:i:c:p:672-682. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.