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Past as Prologue? Understanding energy use in post-2002 China

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  • Kahrl, Fredrich
  • Roland-Holst, David
  • Zilberman, David

Abstract

From 2002 to 2009, China's energy use nearly doubled, making it the world's largest emitter of carbon dioxide more than a decade ahead of forecasts. Why did energy use in China rise so rapidly after 2002? Using index decomposition analysis, we find that the vast majority of growth in energy consumption in China over the 2000s was due to GDP growth, with a small but important amount due to structural change as a result of China's emergence as a net metals exporter. Changing prices and data anomalies make energy intensity and structural change appear to be more important drivers of energy consumption than they actually were; the infamous reversal in energy intensity in China from 2002 to 2004 may simply be an artifact of difficulties in accurately deflating value added. About half of the growth in energy consumption in China from 2002 to 2007 was driven by heavy industry. Using structural decomposition analysis, we find that growth in heavy industrial output was due primarily to growth in construction and equipment investment, with a small amount due to an increase in net metal exports. In tandem, these two findings suggest that the primary driver of energy consumption in China after 2002 was an acceleration of the country's investment-dominated model of GDP growth. Without rebalancing the economy toward consumption, there are limits to what improvements in energy conversion efficiency and end use energy efficiency can achieve in moderating growth in China's energy use.

Suggested Citation

  • Kahrl, Fredrich & Roland-Holst, David & Zilberman, David, 2013. "Past as Prologue? Understanding energy use in post-2002 China," Energy Economics, Elsevier, vol. 36(C), pages 759-771.
  • Handle: RePEc:eee:eneeco:v:36:y:2013:i:c:p:759-771
    DOI: 10.1016/j.eneco.2012.11.018
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    Cited by:

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    2. Juan Wang & Tao Zhao & Xiaohu Zhang, 2017. "Changes in carbon intensity of China’s energy-intensive industries: a combined decomposition and attribution analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 88(3), pages 1655-1675, September.
    3. Liu, Nan & Ma, Zujun & Kang, Jidong, 2015. "Changes in carbon intensity in China's industrial sector: Decomposition and attribution analysis," Energy Policy, Elsevier, vol. 87(C), pages 28-38.
    4. Jin Zhang and David C. Broadstock, 2016. "The Causality between Energy Consumption and Economic Growth for China in a Time-varying Framework," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    5. Liu, Nan & Ma, Zujun & Kang, Jidong & Su, Bin, 2019. "A multi-region multi-sector decomposition and attribution analysis of aggregate carbon intensity in China from 2000 to 2015," Energy Policy, Elsevier, vol. 129(C), pages 410-421.
    6. Yanli Ji & Jie Xue & Zitian Fu, 2022. "Sustainable Development of Economic Growth, Energy-Intensive Industries and Energy Consumption: Empirical Evidence from China’s Provinces," Sustainability, MDPI, vol. 14(12), pages 1-20, June.

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    Keywords

    China; Energy; Economy; Structural change;
    All these keywords.

    JEL classification:

    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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