Co-integration and Causality was built to conduct studies on causality relation between carbon intensity and coal consumption leading to providing important basis for the transition to a low carbon economy. The EG two-step method was performed to study the relation between carbon intensity and coal consumption of China during 1990-2015 and the co-integration and Granger test was constructed to build up the co-integration and error correction models for analysis of the interaction between carbon intensity and coal consumption. The results showed that in long term there is a stable co-integration relation and a positive correlation between carbon intensity and coal consumption; whereas fluctuations exist in short term and there is a one-way Granger causality of carbon intensity with respect to coal consumption.
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Subject: Engineering - Energy and Fuel Technology
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