The Relationship Between Energy Consumption and Economic Growth

Topics: World energy resources and consumption, Peak oil, Economic growth Pages: 13 (4231 words) Published: November 2, 2012
| Department of EconomicsUniversity of Calgary, Canada.|

Term Paper

The Relationship Between Energy Consumption and Economic Growth

Name: Niou Wu
ID: 10047639

Economics 427
Professor: W. D. Walls

Monday, December 06, 2010
The term of "Energy", have rarely been mentioned before. However, during the the 21st century, as the growth of economics, it has become a very hot topic which involving economic, natural science and social science and other fields. This paper is focuse on the relationship between the energy comsumption and the economic growth, especially in China. In the first part of this paper, I would like to introduce the definetion of energy and discuss the energy comsumption status over the world by using some statistical database. Additionally, I would like to use some actual case (based on database of China) to talk about the trends of the energy comsumption and the predicts of these changes. Secondly, I will discuss that how is the energy comsumption support and promote the development of the economics theoretically. In the third part of this paper ,I would like to put forward some assumptions that the advantages and disadvantages which related to the increasing energy consumption. One is that will the incresing energy comsumption promote the economic growth and help economic to achieve the sustainable econnomic development under the economic and environmental constraints? For testing my assumption, I would like to ues some real statistical data of the energy consumption of China to provide a deteiled analysis about this situation by using the Endogenous Growth Model which has been mentioned by Robert Lucas. The other assumption is that is there any adverse impact on the environment which has been caused by the increasing energy comsumption? In this part, I will simply introduce the method to analyse my assumption by using the Kaya Identity Equation which mentioned by the Japanese economist Yoichi Kaya. As a result, by adopting the results of the assumptions above, we could safely come to our conclusion that there is a significant relationship between the Real GDP, capital stock, human capital and the energy comsumption in China, so for as to the whole world. Besides, These factors interact with each other, and we could call this kind of relationship as a long term equilibrium relationship. I. Energy and Enrygy Comsumption

i. Classification of Energy
According to the Encyclopedia Britannica, energy is a kind of natural resouece which includes all fuel, water, sun and wind terms, it conversion of humans and it can provide the necessary energy for their own. The use of energy use can be divided into two categories: the first category is primary energy, the primary energy refers to the original form of energy in nature which exist in the world without the processing and transformation of any energy resources. It also known as natural energy, which including fossil fuels (eg coal, crude oil, natural gas, etc.), nuclear fuel, biomass energy, hydroenergy, wind energy, solar enery, geothermal energy , ocean energy, tidal energy, etc. The other category is called secondary energy. Secondary energy is processed by the conversion of the primary energy , such as electric power, steam, gas, gasoline, diesel oil, fuel oil, liquefied petroleum gas, alcohol, methane, hydrogen and coke and so on. Generally, no matter how many Conversions of primary energy, the energy resouece which we obtained through these alternatives , collectively referred to as a kind of secondary energy. Thus, the energy which emitted during the processes of production such as high temperature flue gas, high temperature materials, thermal, emissions of gas and pressurized fluids, are also refers to a second energy. Additionlly , energy can sorted according to the characterics, renewable energy source and non-renewable energy resource. The renewable energy usually refers to those energies that could be recycled in...
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