How does the transformation of the energy structure impact the coordinated development of economy and environment?

Abstract

The energy structure transformation is of significant practical importance as it ensures energy security, accomplishes the "dual carbon" goal and realizes high-quality economic growth. In order to explore the impact exerted by energy structure transformation on the coordinated development of economic and environmental systems, this paper employs the coupled coordination degree model to measure the coupling degree of economic and environmental systems across 30 provinces in China from 2000 to 2021. Additionally, on the basis of theoretical analysis, it adopts the fixed effect model and the mediated effect model to provide a systematic explanation of the impact energy structure transformation exerts on the coordinated development of the economic and environmental systems, as well as the underlying mechanisms. The results reveal that China's structural transformation of energy consumption significantly promotes the coordinated development of the economic and environmental systems, a conclusion that remains robust even after consideration of the explanatory variable substitutions, municipality exclusion, and tail reduction. From the perspective of heterogeneity, regions with better economic development show a more obvious dividend effect of energy structural transformation on the coordinated development of the economy and the environmental system; energy structural transformation imposes a positive impact on the coordinated development of the economy and the environmental system only in regions characterized by high levels of human capital and urbanization. In terms of the mechanism of action, energy structural transformation can facilitate of industrial structure upgrading and then drive the coordinated development of economic and environmental systems. The study proposes several policy recommendations: transform the traditional fossil energy consumption mode, reduce the proportion of traditional fossil energy, introduce corresponding subsidy policies, encourage enterprises to invest in clean energy, boost investor confidence, and enhance employment quality and income level.

Keywords: Coordinated and coupled development; Economy; Energy structure transformation; Environment; Industrial structure upgrade.