Energy consumption, economic growth and environmental pollution in Gansu Province: Evidence from 1990-2009

This paper applies the Co-integration Tests, Vector Error Correction Model(VECM), Granger Causality Relationship Test and Variance Decomposition Method(VD) to examine the interactions and characteristics of energy consumption, GDP and environmental pollution in Gansu Province for the 20 years from 1990-2009. The empirical results show that there is a long-term equilibrium relationship between economic growth and energy consumption, but it is very weak and the beneficial relationship between them has not been formed; and it exists the one-way causality between energy consumption and environmental pollution, economic growth and environmental pollution, energy consumption and economic growth have significant positive effect on the environmental pollution, and the effect is increasing, but it is difficult to reduce the environmental pollution emissions in the short term in Gansu Province.