How do the industrial structure optimization and urbanization development affect energy consumption in Zhejiang province of China?

Abstract

In response to global climate change, China has voluntarily assumed responsibility and has pledged to reach its peak in carbon emissions by 2030. Industrial structure and urbanization have important impacts on energy consumption. This paper empirically analyzes the dynamic influence of industrial structure and urbanization on energy consumption in the Zhejiang Province of China by constructing a structural vector auto regressive model using impulse response function and variance decomposition. The results show a positive impact of urbanization on energy consumption, which increases and then gradually decreases, and an impact of industrial structure on energy consumption. The results also indicate that it will take a certain period of time for an increase in the proportion of tertiary industry to curb the growth of energy consumption. Urbanization has a greater impact on energy consumption than does industrial structure.