Decomposing the decoupling indicator between the economic growth and energy consumption in China

The decoupling theory is an appropriate tool to study the relationship between economic growth and energy consumption (or environment pollution). But the underlying causes of the states of decoupling are difficult to find. Based on the Log-Mean Divisia Index (LMDI) theory, this paper provides a new way to find the nature of the factors governing the changes in the state of decoupling between the economic growth and energy consumption in China. Our results show that only four states of decoupling occurred during the period 1991-2012: weak decoupling, expansive coupling, expansive negative decoupling, and strong decoupling. The economic activity effect made a negative impact on the decoupling in the study period. The energy intensity effect played a positive role in the development of decoupling except in 2003, 2004, and 2008. The economic structure effect only played a positive role in the development of decoupling in several years. However, the energy structure effect plays a relative small role in the development of decoupling.