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What factors lead to the decline of energy intensity in China's energy intensive industries?

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  • Tan, Ruipeng
  • Lin, Boqiang

Abstract

This paper seeks to investigate the main factors causing the decline in energy intensity of China's energy intensive industries. Index Decomposition Analysis and Production Decomposition Analysis methods are combined to complete the decomposition analysis. Overall, seven factors are related to the decline in the energy intensity and technology improvement effect is the most significant factor. Technical efficiency effect is positively related to the decline in twelve provinces but negatively related in seventeen provinces. Capital-energy substitution effect is beneficial to the decline in twenty provinces. Labor-energy substitution effect undermines the decline and substitution effect among different categories of energy can be ignored. Considering provincial contribution, only Xinjiang Province has a negative contribution. Liaoning, Hebei and Shanghai provinces make the largest contributions to the decline in energy intensity. The main policy implications include enhancing investments in research and development in China's energy intensive industries; transforming the intensive development model of the energy intensive industries; gradually reforming energy price; and improving the layout of energy intensive industries.

Suggested Citation

  • Tan, Ruipeng & Lin, Boqiang, 2018. "What factors lead to the decline of energy intensity in China's energy intensive industries?," Energy Economics, Elsevier, vol. 71(C), pages 213-221.
    • Handle: RePEc:eee:eneeco:v:71:y:2018:i:c:p:213-221
    DOI: 10.1016/j.eneco.2018.02.019
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    More about this item

    Keywords

    China's energy intensive industries; Energy intensity; Technology improvement; Factor substitution; Index decomposition analysis; Production decomposition analysis;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • L69 - Industrial Organization - - Industry Studies: Manufacturing - - - Other
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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