Energy consumption and income in Chinese provinces: Heterogeneous panel causality analysis

► We examine the Granger causality between GDP and energy use for Chinese provinces. ► We use panel causality techniques and take into consideration panel heterogeneity. ► Homogeneous causality tests fail and we test for panel heterogeneous causality. ► Causality holds for 19 provinces from GDP to energy and in the opposite direction for 14 provinces. ► The results point to the importance of the government's recent energy-saving policies.