Energy and carbon intensity in China during the urbanization and industrialization process: A panel VAR approach

This paper first estimates the energy-related carbon dioxide (CO2) emissions and carbon intensity of China's 30 provinces from 2000 to 2015. By constructing a 4-variable Panel Vector Auto-regression (PVAR) model, the paper quantitatively analyzes the dynamic relationship among urbanization, industrial structure, energy and carbon intensity in China during urbanization and industrialization stage. The results show that urbanization process and the advancement of industrial structure are consistent with the optimization goals of energy and carbon intensity. In the long term, energy and carbon intensity will decline with the development of urbanization and the advancement of industrial structure. But urbanization process has an inverted U-shaped effect on energy and carbon intensity, while the influence of industrial structure advancement on energy and carbon intensity increases over time. In contrast, the positive impact of energy intensity on carbon intensity is mainly reflected in the short term. This paper confirms the importance of urbanization and upgrading of industrial structure in the goal of energy saving and emissions reduction. Thus, this paper suggests that each province should adopt the upgrading of industrial structure as one of the policy goals, and constantly promote new urbanization process, following their own development characteristics.