Analysis On Effect Of China's Fiscal Expenditure Structure On Energy Intensity

Since Reforming and opening up, remarkable achievements have been gained in the field of economic development in China. Especially, we always maintain a high GDP growth rate. Also will increase the level of per capita income. At the same time, however, With the rapid growth of energy consumption, the environment problems gradually stand out. Compared with developed countries, there is a higher energy consumption per unit GDP and energy intensity in China. In the background of the promotion of energy saving and green economic, it is important for us to study how to reduce China's energy intensity.On this basis of literature review, this article found out that the subjects of domestic and foreign research are more about factors for China's energy intensity or energy efficiency. Most of them measure every factor's (especially energy structure's and energy efficiency's) impact on energy intensity or energy efficiency using different methods. However, very little study on the impact of the fiscal expenditure-a conduct of the government-on energy intensity has been done.On this basis, in the beginning, this article analyses impact of the fiscal expenditure on energy intensity from the theoretical angle. By reviewing the previous research, this article found out that the fiscal expenditure affects the industrial structure, the technological progress and the economic development significantly. At the same time, the impact of the industrial structure, the technological progress and the economic development, especially the industrial structure and the technological progress, has been proved in empirical methods. Therefore, this article believes that the fiscal expenditure is an important factor which affects the energy intensity.In order to research the impact of the fiscal expenditure on the energy intensity, this article uses OLS to measure the factors which affect the energy intensity with the data in 1995-2009. The results shows that, from 1995 to 2009, the regression coefficient of the fiscal expenditure is 5.484158.This means that, if there is an increase of one unit in the expenditure, there will be an increase of 5.484158 unit in the energy intensity. In other words, during this period, China's energy intensity shows a downward trend and the government takes measures hardly to reduce the energy intensity, however, the growth of China's fiscal expenditure has blocked the reduction of the energy intensity. And among other several explanatory variables, only the industrial shows a significant negative correlation between the energy intensity.On the basis of the theoretical analysis and the preliminary empirical study, this article analyzes the influence of the five parts of the fiscal expenditure on the energy intensity from the epical angle with the data from 1995 to 2006. It was found that the following from expenditure for economic construction show negative correlations with the energy intensity:special expenditure, expenditure for agriculture, social security programs, pension and social welfare expenditure, expenditure for price subsidies, geological exploration expenses。The energy intensity has positive correlations with thecapital expenditures, expenditure for armed police and forces and other expenditure. The energy intensity shows no significant relationship with other parts of the expenditure.