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Energy and carbon intensity: A study on the cross-country industrial shift from China to India and SE Asia

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  • Pappas, Dimitrios
  • Chalvatzis, Konstantinos J.
  • Guan, Dabo
  • Ioannidis, Alexis

Abstract

The potential relocation of various industrial sectors from China to India and countries of the SE Asian region presents low cost opportunities for manufacturers, but also risks rising for energy demand and CO2 emissions. A cross-country shift of industrial output would present challenges for controlling emissions since India and SE Asian countries present higher industrial emissions intensity than China. We find that although there is a convergence in emissions intensity in the machinery manufacturing and paper and pulp industries, there are significant variations in all other industrial sectors. Indian emissions intensity is double that of China in the iron and steel and textile and leather industries and almost triple in the cement industry; Indonesian emissions intensity is almost double that of China in the non-metallic minerals and textile and leather industries and 50% higher in the chemical and petrochemical industry. We demonstrate that the expected higher emissions are driven by both a higher carbon fuel mix intensity in the recipient countries and higher energy intensity in their industrial activities. While industrial relocation could benefit certain countries financially, it would impose considerable threats to their energy supply security and capacity to comply with their Paris Agreement commitments.

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  • Pappas, Dimitrios & Chalvatzis, Konstantinos J. & Guan, Dabo & Ioannidis, Alexis, 2018. "Energy and carbon intensity: A study on the cross-country industrial shift from China to India and SE Asia," Applied Energy, Elsevier, vol. 225(C), pages 183-194.
    • Handle: RePEc:eee:appene:v:225:y:2018:i:c:p:183-194
    DOI: 10.1016/j.apenergy.2018.04.132
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