Impact of Energy Transition on China's Economic Growth under Carbon Neutrality Climate Policies

Chen Rurong (2023) Impact of Energy Transition on China's Economic Growth under Carbon Neutrality Climate Policies. In: SDGs in practice – how to operate sustainable? Budapesti Gazdasági Egyetem, Budapest, Magyarország, pp. 38-50. ISBN 978-615-6342-69-0

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Abstract

President Xi has proposed climate action, and China will be carbon neutral by 2060. This paper investigates the changes in the energy consumption market during the energy crisis and finds out how different economic agents responded. In order to simulate the development of a high-quality economy, a vector auto-regression model (VAR) is constructed by using updated energy factors. First, it identifies the relationship between the factors that will influence carbon emissions development and the digital economy. To determine how carbon emissions, energy consumption, and the digital economy respond to shocks generated between carbon emissions, energy consumption, and the digital economy, this paper performs impulse response analysis on three indicators. Digital economy development requires a lot of energy to fuel its economic activities. Furthermore, technological improvements will reduce the unnecessary consumption of energy and thus contribute to carbon neutrality. In this paper, the greatest contribution is the use of VAR models to investigate the impulse effects of carbon neutrality. This is a challenging energy environment. Using impulse response analysis, the model takes into account effects on energy consumption and income, which makes it more realistic when simulating carbon neutrality.