Energy Consumption - Economic Growth Relationship and Carbon Emissions in Twelve Provinces of West of China

This paper applies the panel unit root, heterogeneous panel cointegration and panel-based dynamic OLS to re-investigate the co-movement and relationship between energy consumption and economic growth for 12 provinces(autonomous regions, municipalities) in West of China from 1989 to 2009. The empirical results show that there is a positive long-run cointegrated relationship between real GDP per capita and energy consumption variables. Furthermore, we investigate three cross-regional groups, namely the stronger-level, medium-level and weaker-level groups, and get more important results and implications. In the long-term, a 1% increase in real GDP per capita increases the consumption of energy by different rates for three groups respectively, and subsequently it increases at different rates in three groups of the carbon emissions in West of China. The economic growth in stronger-level group is energy-dependent to a great extent, and the income elasticity of energy consumption in stronger-level group is over several times than that of the weaker-level groups. At present, West of China are subject to tremendous pressures formitigating climate change issues. It is possible that the GDP per capita elasticity of carbon emissions would be controlled in a range that orients sustainable development by the great effort.