How do economic growth targets affect energy consumption? The role of Chinese-style fiscal decentralization

The strategic formulation of economic growth targets (TAR) plays an essential role in economic development, but it may also affect energy consumption. Using China's provincial data from 2000 to 2018, this study empirically analyzes the impact of TAR on energy consumption. The results show that the local TAR significantly increases energy consumption, and this effect is significant in the eastern and midwestern regions, but there are differences in different development stages. Meanwhile, the unreasonable industrial structure and extensive urbanization mode are the important influencing mechanisms that TAR affects energy consumption. More importantly, Chinese-style fiscal decentralization is an important factor in explaining the relationship between TAR and en-ergy consumption. As the degree of fiscal decentralization increases, the promotion effect of TAR on energy consumption becomes more obvious. In conclusion, the theoretical and empirical evidence of this study indicates that deepening the reform of government target-based management system is helpful to stimulate the motivation of local governments in energy conservation.

Automated summary

The formulation of economic growth targets has a significant impact on energy consumption in China, particularly in the eastern and midwestern regions. The study reveals that unreasonable industrial structure and extensive urbanization mode are the main mechanisms through which economic growth targets affect energy consumption. Furthermore, fiscal decentralization plays a crucial role in this relationship, as an increased degree of decentralization leads to a stronger promotion effect of growth targets on energy consumption. Overall, this study highlights the importance of deepening the reform of the government's target-based management system for promoting energy conservation at the local level.