Global warming resulting from rapid economic growth across the world has become a worldwide threat. The coordination of development of urbanisation, energy consumption, and carbon dioxide (CO2) emissions therefore forms an important issue; it has attracted considerable attention from both governments and researchers in recent years. This study investigated the relationship between urbanisation, energy consumption, and CO2 emissions over the period 1995–2011, using a panel data model, based on the data for 30 Chinese provinces. The potential to reduce CO2 emissions was also analysed. The results indicated that per capita CO2 emissions in China were characterised by conspicuous regional imbalances during the period studied; in fact, per capita CO2 emissions decrease gradually from the eastern coastal region to the central region, and then to the western region. Urbanisation, energy consumption, and CO2 emissions were found to present a long run bi-directional positive relationship, the significance of which was discovered to vary between provinces as a result of the scale of their respective economies. In addition, a bi-directional causal relationship was found to exist between urbanisation, energy consumption, and CO2 emissions: specifically, a bi-directional positive causal relationship exists between CO2 emissions and urbanisation, as well as between energy consumption and CO2 emissions, and a one way positive causal relationship exists from urbanisation to energy consumption. Scenario simulations further demonstrated that whilst China’s per capita and total CO2 emissions will increase continuously between 2012 and 2020 under all of the three scenarios developed in this study, the potential to achieve reductions is also high. A better understanding of the relationship between urbanisation, energy consumption, and CO2 emissions will help China to realise the low-carbon economic development.
