[Energy consumption and GDP growth in Beijing: cointegration and causality analysis]

In this paper, the Johansen cointegration technique and the vector error correction model (VECM) were used to examine the causal relationship between energy consumption (LEC) and gross domestic product (LGDP) for Beijing during the period of 1980 to 2008. Results indicated that LEC and LGDP for Beijing were related by one cointegrating vector and there was a long-run unidirectional causal relationship from GDP to energy consumption. The long-term and short-term elasticity from economy to energy consumption were 0.44 and 0.12 separately. Statistic analysis showed that from 1980 to 2008 every 1% growth in GDP annually would drive energy consumption increasing rate by 0.4% correspondently. And the effect imposed from economy to energy consumption was lagging. It showed that energy consumption was not a strong exogenous variable as to economy. The finding has significant implications from the point of view of energy conservation, emission reduction and economic development.