Whether natural gas consumption bring double dividends of economic growth and carbon dioxide emissions reduction in China

Abstract Rapid development of China's economy is accompanied by a huge amount of carbon dioxide (CO2) emissions. Natural gas consumption (NGC) offers the possibility of achieving double dividends, namely economic growth and CO2 emissions reduction. It is therefore essential to investigate the double dividends of NGC to China's low carbon development. This study establishes one expanded Cobb-Douglas production function and Kaya function, as well as corresponding panel regression econometric models, to evaluate the double dividends of NGC at both national and regional levels by using China's provincial panel data for the period of 1997–2017. The results show that at national level, NGC promotes economic growth and has potential to facilitate CO2 emissions reduction, but with a small share. At regional level, NGC can achieve economic growth in the northeast, the northern coastal and the eastern coastal regions although the increasing share of NGC fails to further stimulate CO2 emissions reduction. NGC impedes economic growth in the southern coastal region and the southwest region, and the increasing share of NGC could not bring CO2 emissions reduction dividend. In the Yellow River midstream region and the northwest region, the impact of NGC on the double dividends is insufficient. In the Yangtze River midstream region, NGC cannot significantly encourage economic growth and CO2 emissions reduction. NGC contributes less to economic growth than coal and oil at both national and regional levels. The high carbon consumption of residents and industries leads to more CO2 emissions, but the CO2 emissions reduction induced by the increasing share of NGC is insufficient. Therefore, it is necessary to improve natural gas supply network, increase monetary incentive to NGC, expand domestic and international natural gas supply sources, and prepare region-specific policies on supporting NGC.