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Steel in a circular economy: Global implications of a green shift in China

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  • Nechifor, Victor
  • Calzadilla, Alvaro
  • Bleischwitz, Raimund
  • Winning, Matthew
  • Tian, Xu
  • Usubiaga, Arkaitz

Abstract

China is increasingly known for its ambitions towards an ‘ecological civilisation’ and a circular economy. Our article assesses the implications of an accelerated shift towards steel recycling in China. Given the relevance of steel for development worldwide as well as its environmental intensity, any such shift is likely to have implications for competitiveness in China and beyond. Recent findings suggest that China could take advantage of an increasing availability of obsolete steel scrap in the coming decades, moving towards more circular, and potentially greener, steel production. We assess such industrial restructuring from an economic perspective and address the competitiveness of China relative to other developing and industrialised regions. The analysis uses a novel global economy-wide modelling framework (ENGAGE-materials) to assess the aggregate and sector-level impacts of different scrap use options in China in the 2019–2030 time frame. The results show moderate GDP gains for China of cumulated USD 589 billion in GDP gains by 2030 despite a replacement of primary steel capacity. A more comprehensive industrial policy mix aimed at improved recycling practices and more adaptive downstream sectors could increase gains to USD 819 billion. The international implications are mixed, with losses for iron ore producers (Australia, Brazil and India) and gains for most developing countries benefiting from lower steel prices. Another result is an increasing demand for coal in electricity production if such a shift wouldn’t be aligned with an accelerated energy transition towards low carbon pathways. We discuss policy implications of such alignment, potential co-benefits, and a need for green international partnerships.

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  • Nechifor, Victor & Calzadilla, Alvaro & Bleischwitz, Raimund & Winning, Matthew & Tian, Xu & Usubiaga, Arkaitz, 2020. "Steel in a circular economy: Global implications of a green shift in China," World Development, Elsevier, vol. 127(C).
    • Handle: RePEc:eee:wdevel:v:127:y:2020:i:c:s0305750x19304243
    DOI: 10.1016/j.worlddev.2019.104775
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    1. Pin Li & Jinsuo Zhang, 2023. "China’s Inter-Provincial Energy Security Resilience Assessment over Space and Time: An Improved Gray Relational Projection Model," Energies, MDPI, vol. 16(7), pages 1-22, March.
    2. Calzadilla, Alvaro & Winning, Matthew & Domenech, Teresa, 2022. "Synergies and trade-offs between climate and circular economy policies in the steel industry," Conference papers 333480, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Taghipour, Amirhossein & Akkalatham, Wareerath & Eaknarajindawat, Natnaporn & Stefanakis, Alexandros I., 2022. "The impact of government policies and steel recycling companies' performance on sustainable management in a circular economy," Resources Policy, Elsevier, vol. 77(C).
    4. Hanspeter Wieland & Manfred Lenzen & Arne Geschke & Jacob Fry & Dominik Wiedenhofer & Nina Eisenmenger & Johannes Schenk & Stefan Giljum, 2022. "The PIOLab: Building global physical input–output tables in a virtual laboratory," Journal of Industrial Ecology, Yale University, vol. 26(3), pages 683-703, June.
    5. Yuancheng Lin & Honghua Yang & Linwei Ma & Zheng Li & Weidou Ni, 2021. "Low-Carbon Development for the Iron and Steel Industry in China and the World: Status Quo, Future Vision, and Key Actions," Sustainability, MDPI, vol. 13(22), pages 1-28, November.
    6. Zhengke Du & Chengcheng Zhu & Yuxin Zhou, 2022. "Increasing Quantity or Improving Quality: Can Soil Pollution Control Promote Green Innovation in China’s Industrial and Mining Enterprises?," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    7. Marta Bottero & Federico Dell’Anna & Vito Morgese, 2021. "Evaluating the Transition Towards Post-Carbon Cities: A Literature Review," Sustainability, MDPI, vol. 13(2), pages 1-28, January.
    8. Calzadilla, Alvaro & Carr, Tony, 2020. "Land degradation and food security: impacts and adaptation options," Conference papers 333148, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Ansari, Dawud & Holz, Franziska, 2020. "Between stranded assets and green transformation: Fossil-fuel-producing developing countries towards 2055," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 130, pages 1-1.
    10. Laura Tolettini & Eleonora Di Maria, 2023. "Structuring and Measuring Environmental Sustainability in the Steel Sector: A Single Case Study," Sustainability, MDPI, vol. 15(7), pages 1-26, April.
    11. Pegels, Anna & Altenburg, Tilman, 2020. "Latecomer development in a “greening” world: Introduction to the Special Issue," World Development, Elsevier, vol. 135(C).

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