This paper, based on statistics of Jiangsu Province from 1990 to 2010, has established the Vector Auto-Regression model between urbanization rate and energy intensity. We analyze the relationship of inactive dynamic response of the two variables by using Granger causality test, impulse response function and dynamic variance decomposition analysis, therefore, revealing the inherent interaction mechanisms and trends between the level of urbanization and energy efficiency. The results show that the level of urbanization is not the Granger causality to energy consumption intensity, but energy consumption intensity is the Granger causality to the level of urbanization for Jiangsu Province; the dynamic response between the two variables is negative showing a reverse movement trend, compared with the urbanization rate, the impulse response curve of energy intensity fluctuates violently, indicating that improving energy efficiency cannot rely solely on the self-adjusting energy system. Variance decomposition of timing values shows the cumulative contribution of energy intensity to changes in the urbanization rate and the effect degree of the urbanization rate to energy consumption intensity indicates a stationary convergence growth situation. Thus, we advise to build a new city energy utilization system and constantly promote the decrease in the intensity of energy and the comprehensive benefit of energy utilization to achieve a balance between energy consumption and economic growth.
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