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Club Convergence in the Energy Intensity of China

We contribute to energy policy discourse in China by demonstrating the existence of multiple energy-intensity equilibria across its provinces. Using recently developed club convergence methods, we identify three unique clubs in China, each with markedly different energy intensity profiles. Unlike in previous studies, our club groupings do not strictly adhere to common geographic separations e.g. east, west and central divisions. To better understand what commonalities/disparities lay behind their groupings, we undertake a regression of the determinants of energy intensity, in a similar vein to a number of recent studies. Doing so, we demonstrate a number of significant differences in the determinants for each of the identified clubs, given which we are able to offer a rich set of policy implications. Not all determinants are common across the three clubs, and where they are common, they can differ both in magnitude and sign, reflecting the fundamental differences across the groups.

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Energy Specializations: Coal – Other; Energy and the Economy – Other; Energy and the Environment – Environmental Market Design; Energy and the Environment – Policy and Regulation; Energy and the Economy – Energy as a Productive Input; Energy and the Environment – Climate Change and Greenhouse Gases

JEL Codes: Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q21: Renewable Resources and Conservation: Demand and Supply; Prices

Keywords: Club Convergence, Energy Intensity, China

DOI: 10.5547/01956574.37.3.dzha

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Published in Volume 37, Number 3 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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