Impact of International Oil Price on Energy Conservation and Emission Reduction in China

Abstract

Abstract:In the context of "new normal" economy and frequent "haze", the strategy of energy conservation and emission reduction aiming to lower costs and reduce pollution is currently still a major strategic direction in China and the world, and will remain so for some time in the future. This paper uses the annual data of West Texas Intermediate (WTI) crude oil price in 1987-2014 as samples. We firstly present the direction and mechanism of the influence of oil price change on total consumption of every kind of energy by path analysis, and then consider establishing a Structural Vector Autoregression model of energy conservation and emission reduction in three statuses. Research shows that if the international oil price increases by 1%, the energy consumption per GDP and carbon dioxide emission increase by 0.092% and 0.053% respectively in the corresponding period. In the status of high energy consumption and high emission, if the international oil price increases by 1%, the energy consumption per GDP and carbon dioxide emission increase by 0.043% and 0.065% respectively in the corresponding period. In the status of low energy consumption and low emission, if the international oil price increases by 1%, the energy consumption per GDP per unit increases by 0.067% and carbon dioxide emission decreases by 0.085% in the corresponding period.

Bounds testing approach to analyzing the environment Kuznets curve hypothesis with structural beaks: The role of biomass energy consumption in the United States

“…A 1% rise in those prices leads carbon emissions to increase by 0.03-0.04%. This empirical evidence is consistent with the results of Chai et al (2016), which indicate that higher oil prices make firms use other fossil fuel substitutes such as dirty coal that increase carbon emissions.…”

“…We have transformed all the variables into the log-form after converting all the series into per capita unit following Ahmed et al (2015) and others. Katircioglu (2015), Bilgili (2016) and Bilgili et al (2016) (Chai et al 2016). …”

Comparative “from Cradle to Gate” Life Cycle Assessments of Hot Mix Asphalt (HMA) Materials

“…Data in Table 12 show that the use of low-sulfur crude oil and gasoil instead of methane makes the A3 AP emissions of Company 2 five times higher than the A3 emissions of Company 1. As stated previously, the use of methane instead of gasoil and low-sulfur crude oil explains this result, as confirmed by Chai et al [60].…”

Environmental implications of increased US oil production and liberal growth agenda in post -Paris Agreement era

“…For instance, Bekhet and Yusop (2009) report a negative impact of increased oil prices on its consumption in Malaysia, while in another study on Malaysia, Yusoff and Latif (2013) show that both in the long run as well as short-run, the demand of energy is found to be income elastic and oil price inelastic. Chai et al (2016) argue that carbon emissions would fall if increases in oil prices are linked with the demand for renewable energy, and undoubtedly that inference would also be subject to a country-level heterogeneity. Darrat and Gilley (1996) had given an indication of this mixed evidence before, though they reported a negative impact of the increase in oil prices on the consumption of oil.…”

“…Perhaps, it may not be the case that price increases could, in fact, reduce oil consumption. Chai et al (2016), analysing the relationship between oil prices, consumption of energy and emissions in China, report that oil prices have a positive impact on consumption of energy and carbon emissions. Hence, it is vital to consider the nexus between income/price and energy consumption/emissions, while considering natural resources abundance and education as a silver lining in this nexus, in specific to a country.…”