Stage effects of energy consumption and carbon emissions in the process of urbanization: Evidence from 30 provinces in China

Urbanization is the primary driver of changes in total energy consumption and the transformation of energy consumption structure. Fossil fuel combustion in energy consumption is the main contributor to carbon emissions. Therefore, urbanization is closely related to energy consumption and carbon emission. China's urbanization level has reached a tipping point, meanwhile, China has accelerated the pace of energy consumption and structural transformation in response to climate change. Understanding the interactions among energy consumption, carbon emissions and urbanization is crucial for promoting coordinated development of energy environment and urbanization in China. Based on panel data of 30 provinces in China from 2003 to 2019, this paper investigates the effects of urbanization on the aggregate effect, composition effect of energy consumption and carbon emissions using econometric models such as fixed-effects model and panel threshold model. The empirical results show that: (1) The relationship between urbanization and total energy consumption exhibits an inverted U-shaped curve relationship. The decarbonization of energy consumption structure is significantly negatively impacted by urbanization, although the effect is significantly weakened when the urbanization rate exceeds 60.35%. In contrast, urbanization has a significant positive effect on total carbon emissions, although this effect is significantly attenuated when the urbanization rate exceeds 66.20%. (2) As of 2020, 17 provinces in China still have urbanization rates below 60.35%, indicating that they are at a stage where urbanization is having a significant negative impact on the decarbonization of energy consumption structure. Similarly, 20 provinces have urbanization rates below 60.30%, indicating that they are at a stage where urbanization is still significantly contributing to carbon emissions. Therefore, continued urbanization will still have a significant impact on decarbonization of energy consumption structure and carbon emission reduction. (3) Heterogeneity analysis revealed that when the urbanization rate exceeds 51.54%, the role of total energy consumption on carbon emission decreases, while the role of energy consumption structure increases. Additionally, beyond a threshold of per capital regional GDP and education social fixed asset investment, decoupling of urbanization and carbon emission can be promoted. Furthermore, urbanization can have a significant negative impact on carbon emissions after local fiscal resource tax increases to a certain level.