The Influencing Factors of China's Carbon Intensity and Policy Choices

Based on autoregressive distributed lag model, this study examines the long-run relationship between carbon intensity and energy efficiency, income level, coal price and industrial composition in the case of China by employing time series data of 1980-2007. The results show that there is a long-run equilibrium relationship and short-run adjusting relationship between China's carbon intensity and Per capita GDP, energy efficiency, coal price and industrial share. Improvement in energy efficiency and increase in coal price makes carbon intensity drop, and increase in industrial share raises the carbon intensity. There is an inverted-U relationship between carbon intensity and Per capita GDP, supporting the EKC hypothesis.