How does the opening of high-speed rail drive energy restructuring? New micro evidence from China

The global energy market is significantly influenced by fossil fuel use and geopolitical factors, as highlighted by the Russia-Ukraine conflict. Many nations are shifting away from fossil fuels towards greener energy sources to reduce reliance on potentially unstable suppliers and mitigate environmental concerns. China, a rapidly developing nation, is particularly focused on energy efficiency, emission reduction, and the establishment of an ecological civilization system, making the impact of its extensive high-speed rail (HSR) network a significant area of study. This research investigates the impact of HSR initiation on energy structure restructuring in China at the micro-level, considering the HSR as a quasi-natural experiment. The study explores the mechanisms through which HSR influences energy consumption, particularly focusing on the technological innovation effect and industrial structure effect. Existing literature primarily focuses on HSR's macroeconomic effects; this research contributes by analyzing the impact at the firm level, providing a more granular understanding of the energy restructuring process.

Previous research primarily focuses on the macroeconomic impacts of HSR, such as economic efficiency and eco-efficiency. However, empirical evidence on HSR's direct effect on energy consumption remains limited. This study addresses this gap by examining the micro-level impacts of HSR on energy consumption, focusing on technological innovation and industrial structural changes as mediating factors. The authors cite studies highlighting the role of technological innovation, industrial structure changes, and government intervention in shaping enterprise energy consumption structure. They also acknowledge the potential for an energy rebound effect, where efficiency gains lead to increased overall energy consumption due to increased demand.

The study employs a difference-in-differences (DID) model and a difference-in-difference-difference (DDD) model to analyze the impact of HSR on energy consumption, specifically focusing on fuel coal and fuel oil consumption. The data are drawn from the China Industrial Enterprise Database and the Corporate Green Development Database, covering the period 2003-2012. The DID model compares energy consumption in cities with and without HSR, controlling for various factors. The DDD model further investigates heterogeneity based on enterprise characteristics (energy intensity, technology intensity, labor intensity, capital intensity, new product development, location in smaller cities), industry characteristics, and regional characteristics (city size, innovation capacity, resource-based cities). Robustness checks include parallel trend tests, placebo tests, and propensity score matching (PSM-DID) to address potential biases and confounding factors. The study also employs various control variables to account for factors such as enterprise age, scale, labor, liquidity, solvency, financial costs, and profitability.

The empirical results strongly support the hypothesis that HSR opening leads to a reduction in fuel energy consumption, especially coal consumption, by industrial enterprises. This finding is robust across a series of robustness tests including parallel trend tests (which suggest that the observed effects are unlikely to be due to pre-existing trends), placebo tests (which randomly assign HSR implementation to other cities and demonstrate that the effects are not due to chance), and PSM-DID (which addresses potential selection bias). The DDD analysis reveals significant heterogeneity. The reduction in energy consumption is more significant for: * High-energy-consuming enterprises * Technology-intensive enterprises * Enterprises in smaller cities * Enterprises in innovation pilot cities * Enterprises in resource-based cities Analysis of micro-mechanisms reveals that HSR opening leads to improvements in enterprise productivity (measured by output per capita and sales per capita), particularly for high-carbon industries and enterprises producing new products. HSR also promotes industrial upgrading by influencing enterprise entry and exit, particularly in high-carbon industries, facilitating relocation towards smaller cities and contributing to a more efficient allocation of resources. These effects are discussed in detail in the analysis of technological progress and industrial structure upgrading.

The findings demonstrate a significant positive environmental impact of HSR on energy restructuring in China. The study's micro-level analysis goes beyond previous macro-level research, providing insights into the underlying mechanisms. The observed effects of HSR on enterprise productivity and industrial structure upgrading directly contribute to reduced energy consumption. The heterogeneity analysis further enhances the understanding of these effects by identifying specific contexts where the impact of HSR is most pronounced. This research is particularly relevant in the context of China's commitment to reducing carbon emissions and building an ecological civilization. The findings offer valuable insights for policymakers in China and other emerging economies looking to adopt similar infrastructure development strategies.

This paper provides robust evidence that HSR opening in China significantly reduces industrial firms' fossil fuel consumption, particularly coal. This reduction is driven by the technological innovation and industrial structure upgrading effects facilitated by HSR. The findings highlight the importance of considering heterogeneity when assessing the impacts of infrastructure development on energy consumption. Future research could explore the long-term sustainability of these effects, further examine the interactions between HSR and other policy instruments aimed at energy efficiency, and investigate the potential for similar effects in other contexts.

While the study employs rigorous econometric methods, including robustness checks, some limitations exist. The analysis is limited to the period 2003-2012; extending the analysis to later years would be valuable to account for potential changes in policy or technological advancements. The data relies on firm-level information, which might not capture the full complexity of the energy system. Further research could incorporate data on household energy consumption and broader environmental impacts to achieve a more holistic understanding of the HSR's consequences.