Research of the relationship and empirical study on GHG emissions, energy consumption and economic growth

Developing a low-carbon economy has become a global economic issue. It involves the key factors of energy consumption, economic growth, and greenhouse gas (GHG) emissions. This paper investigates through empirical tests by using time series variables for the periods from 1980 to 2009. First, by using a regression model, we find that a 1% increase in energy consumption will lead to a 0.36% growth of GDP. Second, the Granger Causality test demonstrates that there is not significant causality between the capital, labor, energy, and emissions on the economic growth. And there is significant pairwise Granger Causality between GHG emissions and energy consumption at 5% level and there is Granger Causality of investment to economic growth at 10% level. Economic growth is more dependent on the energy consumption because of the industrialization development. Energy consumption can lead to the increase of GHG emissions. Finally, In order to deal with the relationship between GHG emissions, energy consumption and economic growth, the Chinese government must continue to reduce the proportion of coal in energy consumption, increase the efficiency of coal use and promote the shift of China's economic structure.