The Constraints of “Energy-economy-environment” System and the Solution of the Constraints: Theoretical and Empirical Research

Introducing energy and environmental pollution governance into the production function, and the pollution into the utility function, this research constructs an endogenous growth model of “Energy-Economy-Environment”(3E) system. Based on the model, we systematically explore the solution of the constraints which include the energy depletion, environmental pollution and the relationship between parameter values and tightness of the constraints. Theoretical research shows that: (1)Human capital is a significant variable for solving the constraints of 3E system.(2)The larger the discount rate, the stronger 3E system constraints.(3)With the increasing pollution abatement investment, sustainable 3E system requires that the elasticity of marginal utility is greater than unit 1 in equilibrium.(4)While weakening the environmental pollution constraint, higher marginal utility enhances energy depletion constraint. Furthermore, according to some results of theoretical model, an econometric model is employed into empirical analysis of China. We conclude that human capital has contributed significantly to economic growth, but the effect of pollution governance is not yet significant. Moreover, in terms of the contribution of human capital to economic growth, the eastern region is significantly higher than the central and western regions. With respect to the contribution of energy consumption, the opposite holds true.