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Estimating the heterogeneous and dynamic economic impacts of China’s energy consumption control policy

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Abstract

In the late stages of its industrialization, China’s economy still largely relies on energy. With increasing pressures to protect the environment and reduce carbon emissions, in 2013, the Chinese government officially issued four policies in succession to control total energy consumption. In this paper, we use the single difference model to estimate the average and dynamic economic impacts of such policies. We also introduce the energy dependence degree and divide all industrial sectors into two categories to estimate heterogeneous and dynamic policy effects based on the difference-in-differences (DID) model. Our empirical study shows that the implementation of energy consumption control policies results in a decrease in economic growth rates. Meanwhile, the negative dynamic economic effects of such policies decrease levels of volatility. Furthermore, such policies have heterogeneous economic effects on levels of energy dependence across sectors and have more significantly negative economic impacts on heavily energy-dependent industries but with hysteresis. Heterogeneous and dynamic economic effects on heavily energy-dependent industries are decreasing. We conclude with recommendations on ways to mitigate the negative effects observed.

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Data availability

The datasets used, generated, and analyzed during the current study are available in the China industrial economy statistical yearbook and Appendix in this paper.

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Funding

This research is supported by the Basic Research Expenses for Municipal Universities in Beijing (Grant No. X21009).

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Authors and Affiliations

  1. School of Urban Economics and Management, Beijing University of Civil Engineering and Architecture, Beijing, 102616, China

    Qianqian Zhang

  2. UIBE Business School, University of International Business and Economics, No.10 Huixin Dongjie, Chaoyang District, Beijing, 100029, China

    Rui-Ning Liu

Authors
  1. Qianqian Zhang
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  2. Rui-Ning Liu
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed by Qianqian Zhang and Rui-Ning Liu. The first draft of the manuscript was written by Qianqian Zhang and Rui-Ning Liu and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

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Correspondence to Rui-Ning Liu.

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Appendix

Appendix

Table 9 Energy dependence division in industrial sectors
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Zhang, Q., Liu, RN. Estimating the heterogeneous and dynamic economic impacts of China’s energy consumption control policy. Environ Sci Pollut Res 28, 60537–60549 (2021). https://doi.org/10.1007/s11356-021-14957-5

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