Search

China receives great global attention for its energy consumption. To implement effective and fair policies to save energy, it is critical to understand what drives China's energy consumption and regional disparities. Most of previous studies failed to include indirect factors embodied in the inter-sectoral and regional input-output flows. Therefore, a hybrid structural decomposition analysis is conducted to explore drivers of energy consumption and regional disparities. The results present: (1) energy, directly or indirectly, is flowing from coastal regions to Northwest, Southwest and Central China. (2) The growth of residents' income to contribution of energy consumption is by 106.7% and 169.8% during 2002–2007 and 2007–2012, respectively. Meanwhile, the positive impact of income on energy consumption is larger in urban than rural areas, and the structure effect has a significantly negative impact on energy consumption in Northwest and Southwest regions. (3) By factors, the substitution effect non-energy to energy inputs in industry sector might bring more energy consumption. By sectors, the technological advancement of the non-industry sectors decreases energy consumption by 31.7% and 174.6% during 2002–2007 and 2007–2012, respectively. Technological advancement of industry sectors plays the most important role in increasing energy consumption across China. [Display omitted] • Developing a hybrid structural decomposition analysis to capture drivers of energy consumption and regional disparities. • Income effect is more important than structure effect to explain increase of energy consumption. • The impacts of technical progress on energy consumption vary by regions, factors and sectors. • The industry and income effect contribute most to the increase in the energy consumption. [ABSTRACT FROM AUTHOR]