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Scenario Prediction of Energy Consumption and CO 2 Emissions in China’s Machinery Industry

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  • Boqiang Lin

    () (Collaborative Innovation Center for Energy Economics and Energy Policy, China Institute for Studies in Energy Policy, School of Management, Xiamen University, Xiamen 361005, China)

  • Weisheng Liu

    () (China Center for Energy Economics Research, School of Economics, Xiamen University, Xiamen 361005, China)

Abstract

Energy conservation and CO 2 abatement is currently an important development strategy for China. It is significant to analyze how to reduce energy consumption and CO 2 emissions in China’s energy-intensive machinery industry. We not only employ a cointegration method and scenario analysis to predict the future energy demand and CO 2 emissions in China’s machinery industry, but we also use the Monte Carlo simulation to test the validity of the predictions. The results show that energy demand in the industry will respectively reach 678.759 Mtce (million ton coal equivalent) in 2020 and 865.494 Mtce in 2025 under the baseline scenario. Compared with the baseline scenario, the energy savings in 2020 will respectively be 63.654 Mtce and 120.787 Mtce in the medium and advanced scenarios. Furthermore, we forecast the corresponding CO 2 emissions as well as the reduction potential respectively in 2020 and 2025. In order to achieve energy conservation and emissions reduction, the government should increase energy price, levy environmental taxes based on the emissions level of machinery enterprises, promote mergers and acquisitions of enterprises, and expand the scale of enterprises. This paper provides a reference for energy conservation and CO 2 abatement policy in China’s machinery industry.

Suggested Citation

  • Boqiang Lin & Weisheng Liu, 2017. "Scenario Prediction of Energy Consumption and CO 2 Emissions in China’s Machinery Industry," Sustainability, MDPI, Open Access Journal, vol. 9(1), pages 1-18, January.
  • Handle: RePEc:gam:jsusta:v:9:y:2017:i:1:p:87-:d:87569
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    References listed on IDEAS

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    Keywords

    China’s machinery industry; energy conservation; cointegration; Monte Carlo simulation;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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