IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v38y2010i3p1379-1388.html
   My bibliography  Save this article

Why did China's energy intensity increase during 1998-2006: Decomposition and policy analysis

Author

Listed:
  • Zhao, Xiaoli
  • Ma, Chunbo
  • Hong, Dongyue

Abstract

Despite the fact that China's energy intensity has continuously decreased during the 1980s and mostly 1990s, the decreasing trend has reversed since 1998 and the past few years have witnessed rapid increase in China's energy intensity. We firstly conduct an index decomposition analysis to identify the key forces behind the increase. It is found that: (1) the high energy demand in industrial sectors is mainly attributed to expansion of production scale, especially in energy-intensive industries; (2) energy saving mainly comes from efficiency improvement, with energy-intensive sectors making the largest contribution; and (3) a heavier industrial structure also contributes to the increase. This study also makes the first attempt to bridge the quantitative decomposition analysis with qualitative policy analyses and fill the gap between decomposition results and policy relevance in previous work. We argue that: (1) energy efficiency improvement in energy-intensive sectors is mainly due to the industrial policies that have been implemented in the past few years; (2) low energy prices have directly contributed to high industrial energy consumption and indirectly to the heavy industrial structure. We provide policy suggestions in the end.

Suggested Citation

  • Zhao, Xiaoli & Ma, Chunbo & Hong, Dongyue, 2010. "Why did China's energy intensity increase during 1998-2006: Decomposition and policy analysis," Energy Policy, Elsevier, vol. 38(3), pages 1379-1388, March.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:3:p:1379-1388
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(09)00849-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ang, B. W., 2004. "Decomposition analysis for policymaking in energy:: which is the preferred method?," Energy Policy, Elsevier, vol. 32(9), pages 1131-1139, June.
    2. Sinton, Jonathan E., 2001. "Accuracy and reliability of China's energy statistics," China Economic Review, Elsevier, vol. 12(4), pages 373-383.
    3. Du, Limin & Mao, Jie & Shi, Jinchuan, 2009. "Assessing the impact of regulatory reforms on China's electricity generation industry," Energy Policy, Elsevier, vol. 37(2), pages 712-720, February.
    4. Ang, B.W & Zhang, F.Q & Choi, Ki-Hong, 1998. "Factorizing changes in energy and environmental indicators through decomposition," Energy, Elsevier, vol. 23(6), pages 489-495.
    5. B. W. Ang & Ki-Hong Choi, 1997. "Decomposition of Aggregate Energy and Gas Emission Intensities for Industry: A Refined Divisia Index Method," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 59-73.
    6. Ma, Chunbo & Stern, David I., 2008. "China's changing energy intensity trend: A decomposition analysis," Energy Economics, Elsevier, vol. 30(3), pages 1037-1053, May.
    7. Zhang, ZhongXiang, 2003. "Why did the energy intensity fall in China's industrial sector in the 1990s? The relative importance of structural change and intensity change," Energy Economics, Elsevier, vol. 25(6), pages 625-638, November.
    8. Hoekstra, Rutger & van den Bergh, Jeroen C. J. M., 2003. "Comparing structural decomposition analysis and index," Energy Economics, Elsevier, vol. 25(1), pages 39-64, January.
    9. Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
    10. Ma, Chunbo & He, Lining, 2008. "From state monopoly to renewable portfolio: Restructuring China's electric utility," Energy Policy, Elsevier, vol. 36(5), pages 1697-1711, May.
    11. Zha, Donglan & Zhou, Dequn & Ding, Ning, 2009. "The contribution degree of sub-sectors to structure effect and intensity effects on industry energy intensity in China from 1993 to 2003," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(4), pages 895-902, May.
    12. Wang, GuoHong & Wang, YunXia & Zhao, Tao, 2008. "Analysis of interactions among the barriers to energy saving in China," Energy Policy, Elsevier, vol. 36(6), pages 1879-1889, June.
    13. Richard F. Garbaccio & Mun S. Ho & Dale W. Jorgenson, 1999. "Why Has the Energy-Output Ratio Fallen in China?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 63-91.
    14. Ang, B.W. & Liu, F.L., 2001. "A new energy decomposition method: perfect in decomposition and consistent in aggregation," Energy, Elsevier, vol. 26(6), pages 537-548.
    15. Yang, Ming, 2008. "China's energy efficiency target 2010," Energy Policy, Elsevier, vol. 36(2), pages 561-570, February.
    16. Sinton, Jonathan E. & Levine, Mark D., 1994. "Changing energy intensity in Chinese industry : The relatively importance of structural shift and intensity change," Energy Policy, Elsevier, vol. 22(3), pages 239-255, March.
    17. Huang, Jin-ping, 1993. "Industry energy use and structural change : A case study of The People's Republic of China," Energy Economics, Elsevier, vol. 15(2), pages 131-136, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Hengyun & Oxley, Les & Gibson, John, 2010. "China's energy economy: A survey of the literature," Economic Systems, Elsevier, vol. 34(2), pages 105-132, June.
    2. Wang, Wenchao & Mu, Hailin & Kang, Xudong & Song, Rongchen & Ning, Yadong, 2010. "Changes in industrial electricity consumption in china from 1998 to 2007," Energy Policy, Elsevier, vol. 38(7), pages 3684-3690, July.
    3. Ma, Chunbo & Stern, David I., 2008. "China's changing energy intensity trend: A decomposition analysis," Energy Economics, Elsevier, vol. 30(3), pages 1037-1053, May.
    4. Ma, Chunbo, 2010. "Account for sector heterogeneity in China's energy consumption: Sector price indices vs. GDP deflator," Energy Economics, Elsevier, vol. 32(1), pages 24-29, January.
    5. Wu, Libo & Kaneko, Shinji & Matsuoka, Shunji, 2006. "Dynamics of energy-related CO2 emissions in China during 1980 to 2002: The relative importance of energy supply-side and demand-side effects," Energy Policy, Elsevier, vol. 34(18), pages 3549-3572, December.
    6. Seck, Gondia Sokhna & Guerassimoff, Gilles & Maïzi, Nadia, 2016. "Analysis of the importance of structural change in non-energy intensive industry for prospective modelling: The French case," Energy Policy, Elsevier, vol. 89(C), pages 114-124.
    7. Wang, Miao & Feng, Chao, 2018. "Decomposing the change in energy consumption in China's nonferrous metal industry: An empirical analysis based on the LMDI method," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2652-2663.
    8. Wu, Yanrui, 2012. "Energy intensity and its determinants in China's regional economies," Energy Policy, Elsevier, vol. 41(C), pages 703-711.
    9. Inglesi-Lotz, Roula & Blignaut, James N., 2011. "South Africa’s electricity consumption: A sectoral decomposition analysis," Applied Energy, Elsevier, vol. 88(12), pages 4779-4784.
    10. Duran, Elisa & Aravena, Claudia & Aguilar, Renato, 2015. "Analysis and decomposition of energy consumption in the Chilean industry," Energy Policy, Elsevier, vol. 86(C), pages 552-561.
    11. Su, Bin & Ang, B.W., 2012. "Structural decomposition analysis applied to energy and emissions: Some methodological developments," Energy Economics, Elsevier, vol. 34(1), pages 177-188.
    12. Yang Yu & Qiuyue Kong, 2017. "Analysis on the influencing factors of carbon emissions from energy consumption in China based on LMDI method," 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 1691-1707, September.
    13. Xie, Shi-Chen, 2014. "The driving forces of China׳s energy use from 1992 to 2010: An empirical study of input–output and structural decomposition analysis," Energy Policy, Elsevier, vol. 73(C), pages 401-415.
    14. Yang, Guangfei & Li, Wenli & Wang, Jianliang & Zhang, Dongqing, 2016. "A comparative study on the influential factors of China's provincial energy intensity," Energy Policy, Elsevier, vol. 88(C), pages 74-85.
    15. Chai, Jian & Guo, Ju-E & Wang, Shou-Yang & Lai, Kin Keung, 2009. "Why does energy intensity fluctuate in China?," Energy Policy, Elsevier, vol. 37(12), pages 5717-5731, December.
    16. Lin, Boqiang & Long, Houyin, 2016. "Emissions reduction in China׳s chemical industry – Based on LMDI," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1348-1355.
    17. Lin, Boqiang & Du, Kerui, 2014. "Decomposing energy intensity change: A combination of index decomposition analysis and production-theoretical decomposition analysis," Applied Energy, Elsevier, vol. 129(C), pages 158-165.
    18. Löschel, Andreas & Pothen, Frank & Schymura, Michael, 2015. "Peeling the onion: Analyzing aggregate, national and sectoral energy intensity in the European Union," Energy Economics, Elsevier, vol. 52(S1), pages 63-75.
    19. Wang, Miao & Feng, Chao, 2017. "Analysis of energy-related CO2 emissions in China’s mining industry: Evidence and policy implications," Resources Policy, Elsevier, vol. 53(C), pages 77-87.
    20. Zheng, Jiali & Mi, Zhifu & Coffman, D'Maris & Milcheva, Stanimira & Shan, Yuli & Guan, Dabo & Wang, Shouyang, 2019. "Regional development and carbon emissions in China," Energy Economics, Elsevier, vol. 81(C), pages 25-36.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:3:p:1379-1388. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/enpol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.