How does the new-type urbanisation affect CO2 emissions in China? An empirical analysis from the perspective of technological progress

The development of traditional urbanisation has generated environmental problems, so the Chinese Government has proposed a new-type of urbanisation path with uniquely Chinese characteristics. How does this new-type of urbanisation affect CO₂ emissions? Based on panel data from 29 provinces in China (2005 to 2016), we apply an exploratory spatial data analysis model, a spatial econometric model, and a threshold model to analyse the spatial autocorrelation of CO₂ emissions, the direct and indirect effects of new-type urbanisation on CO₂ emissions, and the threshold characteristics produced by technological progress, respectively. The key results are: (1) CO₂ emissions show significant positive autocorrelation in China, and the spatial distribution of CO₂ emissions is HH (High-High) or LL (Low-Low) clustered in most provinces; (2) new-type urbanisation has a paradoxical effect on CO₂ emissions. Energy-saving technology has a rebound effect on CO₂ emissions, but environmental technology inhibits CO₂ emissions; (3) by eliminating the rebound effect of energy-saving technology on CO₂ emissions and promoting environmental technology, new-type urbanisation indirectly inhibits CO₂ emissions; (4) new-type urbanisation exhibits a threshold effect on CO₂ emissions due to the different levels of energy-saving technology and environmental technology. Finally, policy recommendations for CO₂ emissions reduction are proposed from the perspective of new-type urbanisation, energy-saving technology, and environmental technology.     

China’s new growth pattern and its effect on energy demand and greenhouse gas emissions

China’s economic transformation and new growth pattern have significant implications for energy demand and greenhouse gas emissions. Using an extended version of a large computable general equilibrium model of China, we explore alternative futures for the Chinese economy and its energy needs over the period from 2015 to 2030. The simulation results show that encouraging household consumption and accelerating economic transition from investment-led to service-led growth will boost China’s economic growth. Capping coal consumption will improve China’s energy consumption structure and reduce greenhouse gas emissions significantly. The simulation exercises imply that, with a well-designed policy, the Chinese government can meet the challenges of strong economic growth, lower carbon emissions, environmental benefits, and energy security. Moreover, the Chinese government’s goal of peaking carbon emissions at 2030 is achievable.     

Why does energy intensity fluctuate in China?

Energy intensity reflects energy usage efficiency of an economy, in the process of production and consuming of economic output. Why does energy intensity fluctuate in China? In this paper, we explores the distortion of different energy prices, the change of energy structure, technological and final demand structure and their impact on energy intensity in China, based on the path analysis method and input–output structure decomposition model, respectively. And three results have been showed in this paper: first, proved that optimize the relative prices of different types of energy is the most important pricing mechanism when cut down the energy intensity; second, showed that the proportion of oil consumption is the limiting factor that has led to energy intensity change; third, built an input–output structure decomposition analysis model and analyzed technological changes, final demand structure changes, and their direct and indirect impact on energy intensity based on energy input-occupancy-output tables of 30 industry sectors of China in 1992, 1997, 2002 and 2004, which suggest that the fluctuation of energy intensity is mainly due to technology advances and the corresponding change in industrial structure.     

The effect of energy end-use efficiency improvement on China’s energy use and CO2 emissions: a CGE model-based analysis

With its rapid economic growth, China is now confronted with soaring pressure from both its energy supply and the environment. To deal with this conflict, energy end-use efficiency improvement is now promoted by the government as an emphasis for future energy saving. This study explores the general equilibrium effect of energy end-use efficiency improvement on China’s economy, energy use, and CO₂ emissions. This paper develops a static, multisector computable general equilibrium model (CGE) for China, with specific detail in energy use and with the embodiment of energy efficiency. In order to explore the ability of subsidizing non-fossil-generated electricity on moderating potential rebound effects, in this model, the electricity sector was deconstructed into five specific generation activities using bottom–up data from the Chinese electricity industry. The model is calibrated into a 16-sector Chinese Social Accounting Matrix for the year 2002. In the analysis, seven scenarios were established: business as usual, solely efficiency improvement, and five policy scenarios (taxing carbon, subsidized hydropower, subsidized nuclear power, combination of taxing carbon and subsidized hydropower, combination of taxing carbon and subsidized nuclear power). Results show that a sectoral-uniform improvement of energy end-use efficiency will increase rather than decrease the total energy consumption and CO₂ emissions. The sensitivity analysis of sectoral efficiency improvement shows that efficiency improvements happened in different sectors may have obvious different extents of rebound. The three sectors, whose efficient improvements do not drive-up total national energy use and CO₂ emissions, include Iron and Steel, Building Materials, and Construction. Thus, the improvement of energy end-use efficiency should be sectoral specific. When differentiating the sectoral energy-saving goal, not only the saving potential of each sector but also its potential to ease the total rebound should be taken into account. Moreover, since the potential efficiency improvement for a sector over a certain period will be limited, technology measures should work along with a specific policy to neutralize the rebound effect. Results of policy analysis show that one relatively enhanced way is to combine carbon taxing with subsidized hydropower.     

Bi-lateral CO2 emissions embodied in Australia–China trade

This paper quantifies the CO₂ emissions embodied in bi-lateral trade between Australia and China using a sectoral input–output model. The results revealed: (1) that China performs lower than Australia in clean technology in the primary, manufacturing, energy sectors due to their overuse of coal and inefficient sectoral production processes, and (2) that China had a 30.94 Mt surplus of bi-lateral CO₂ emissions in 2010–2011 and (3) overall global emissions were reduced by 20.19 Mt through Australia–China trade in 2010–2011. The result indicates that the greater the energy efficient a country among the trading partners the lower will be the overall global CO₂ emissions. Global emissions decreased mainly because China consumed Australian primary products rather than producing them. Australia is an energy efficient producer of primary products relative to China. The bilateral trade compositions and trade volume played an important role in lowering global emissions and therefore one can view proposed China Australia Free trade Agreement positively in reducing global emissions. However, for the sustainable development, China should strengthen clean energy use and both countries should adopt measures to create an emission trading scheme in order to avoid protectionism in the form of future border price adjustments.     

Towards flexible energy demand – Preferences for dynamic contracts,services and emissions reductions

Households’ preferences for attributes of flexible energy demand are not well understood. This paper evaluates Finnish households’ acceptance of hypothetical contracts and services aimed at increasing demand side flexibility. We conduct a Choice Experiment to analyze households’ willingness to offer flexibility through timing their electricity usage and heating; their interest in dynamic pricing contracts such as real-time pricing, two-rate tariffs, or power-based tariffs; and how emissions reductions affect their choices. The results indicate that households’ sensitivity to restrictions in electricity usage is much stronger than their sensitivity to restrictions in heating. Households also require considerable compensation to choose real-time pricing over fixed fees. Furthermore, other value-creating elements besides monetary compensation could incentivize households to offer demand side flexibility because they value reductions in CO₂ emissions at the power system level.     

Will restrictions on CO2 emissions require reductions in transport demand?

In this paper, the potential for the transportation sector to develop in a way that is consistent with long-term climate targets will be discussed. An important question is whether technical measures will be sufficient for reaching long-term climate targets. Although there is a large potential to significantly increase the use of bioenergy from today's level, there will be severe restrictions to its use within the transportation sector. Other renewable energy sources such as wind and solar are much more abundant and could provide the majority of the necessary transportation fuel in the long run. Although potentially much more expensive than current fuels they could, in combination with strong efficiency improvements, provide transport services at costs that could be acceptable in a growing economy. Transport levels as high as today or even higher could be consistent from a climate perspective if such fuels and technologies are utilised. Relying only on technical measures would, however, be risky, as there is no guarantee that the technology will develop at a sufficient rate. Furthermore, the existence of other negative environmental effects would argue for the implementation of measures affecting transport demand as well.     

Governance and renewable energy investment in MENA countries:How does trade matter?

The Middle East and North Africa (MENA) countries have recently developed renewable energy (RE) markets. However, their rate of investment in renewable energy remains small compared to other regions in the world despite their relatively abundant endowments, particularly in wind and solar. While the literature identifies some barriers to investment in renewable energy, we assume that the investment of MENA countries could be impeded by specific governance factors. Furthermore, we consider recent literature showing that trade openness reduces the negative effects of weak governance. In this paper, we empirically investigate the link between governance, openness, and renewable energy investment in the MENA region using panel data for 15 MENA countries over the period 1996-2013. Our results prove that a higher institutional quality is associated with RE investment in MENA countries. In addition, this relationship seems to be conditional on the trade regime. Our results are robust to several measures of renewable energy investment and governance as well as to an alternative econometric set-up.     

Lost carbon emissions: the role of non-manufacturing “other industries” and refining in industrial energy use and carbon emissions in IEA countries

We present a review of trends in energy use and output in branches of industry not often studied in detail: petroleum refining and what we call the other industries — agriculture, mining, and construction. From a sample of IEA countries we analyze eight with the most complete data from the early 1970s to the mid-1990s. We carry out a decomposition analysis of changes in energy use and carbon emissions in the “other industries” sector. We also review briefly the impact of including refining in the evolution of manufacturing energy use, usually studied without refining. Despite many data problems, we present our results as a way of enticing others to study these important “lost” sectors more carefully. We have five basic findings. First, “other industries” tends to be a minor consumer of energy in many countries, but in some, particularly Denmark, the US, and Australia, mining or agriculture can be a major sector too large to be overlooked. Second, refining is an extremely energy intensive industry which despite a relatively low share of value added consumes as much as 20% of final energy use in manufacturing. Third, as a result of a slower decline in the carbon-intensity of these industries vis-à-vis the manufacturing industries, their share of industrial emissions has been rising. Fourth, for other industries variation in per capita output plays a relatively small role in differentiating per capita carbon emissions compared to the impact of subsectoral energy intensities. Finally, including this energy in CO₂ calculations has little impact on overall trends, but does change the magnitude of emissions in most countries significantly. Clearly, these industries provide important opportunities for searching for carbon emissions reductions.     

How liquid hydrogen production methods affect emissions in liquid hydrogen powered vehicles?

Emissions variations of liquid hydrogen (LH₂) production methods in liquid hydrogen powered vehicles are investigated in this study. Volatile organic compounds (VOC), carbon monoxide (CO), nitrogen oxides (NO_x), particulate matters (PM₁₀ & PM_2.5), sulfur oxides (SO_x), and carbon dioxide (CO₂) emissions, which are on well-to-wheel (WTW) basis, are evaluated for 2013 model year's cars in the target year of 2018. GREET software is utilized for the emissions. When the average values of all emissions are compared, hydrogen production by the solar power, nuclear, and electrolysis methods have the lowest emissions, respectively, and hydrogen production by coal and electricity methods have the highest emissions, respectively. On the other hand, it is found that in all emission types and hydrogen production methods, fuel cell vehicles (FCV) emit less emission than spark ignition hybrid electric vehicles (SI HEV) and SI HEVs emit less emission than spark ignition internal combustion engine vehicles (SI ICEV). Emissions decrease by 22.4% in SI HEVs compared to SI ICEVs, 35.1% in FCVs compared to SI HEVs, and 49.6% in FCVs compared to SI ICEVs for average of all emissions.     

What causes the change in energy demand in the economy?: The role of technological change

This paper proposes a simple and theoretically clear approach to the estimation of technological change in a multisector general equilibrium framework. This study employs the Multiple Calibration Decomposition Analysis (MCDA) to evaluate technological change that is responsible for changes in energy use and carbon dioxide emissions in the Japanese economy in the oil crises period from 1970 to 1985. The MCDA serves as an elementary way of separating structural change due to technological change from that due to price substitution effects, capturing the interdependence among economic sectors. The empirical result provides a better understanding of the effects on the economy of technological change in that significant period.     

How ambitious are China and India’s emissions intensity targets?

Several developing economies have announced carbon emissions targets for 2020 as part of the negotiating process for a post-Kyoto climate policy regime. China and India’s commitments are framed as reductions in the emissions intensity of the economy by 40–45% and 20–25%, respectively, between 2005 and 2020. How feasible are the proposed reductions in emissions intensity for China and India, and how do they compare with the targeted reductions in the US and the EU? In this paper, we use a stochastic frontier model of energy intensity to decompose energy intensity into the effects of input and output mix, climate, and a residual technology variable. We use the model to produce emissions projections for China and India under a number of scenarios regarding the pace of technological change and changes in the share of non-fossil energy. We find that China is likely to need to adopt ambitious carbon mitigation policies in order to achieve its stated target, and that its targeted reductions in emissions intensity are on par with those implicit in the US and EU targets. India’s target is less ambitious and might be met with only limited or even no dedicated mitigation policies.     

Who does what in China’s new energy vehicle industry?

This paper provides an overview of the Chinese new energy vehicle industry and discusses the role of state in the industry’s development. Chinese policies have aimed to promote the development of new energy technologies and to reduce the consumer price of new energy vehicles. Chinese authorities have also been concerned about the balance between collaboration and competition in the sector, since most key actors are owned by the state. One solution has been the establishment of a number of industry alliances linking auto enterprises, universities and research institutes, to promote both collaboration (within each alliance) and competition (between alliances).     

How large are the impacts of carbon-motivated border tax adjustments on China and how to mitigate them?

There have been growing clamours for carbon-motivated border tax adjustments (CBTAs) targeted at countries that do not accept the carbon emission reduction targets. Currently, China is the largest carbon emitter with large annual incremental carbon emissions and might have to face the challenge of CBTA. Therefore, it is a pressing policy challenge for the government to get prepared for mitigating the negative impacts of CBTAs on China. In this article, we compare the impacts of CBTAs across large developing economies and compare the performances of different policy options to mitigate the negative impacts. The main findings are as follows. First, CBTA would affect different economies and different sectors differently. CBTA would result in a shift of production across sectors and relocation of output from the target countries to CBTA users. Second, CBTA would contribute to world's emissions reduction, but less than expected due to carbon leakage. Finally, policy options, which could reduce the present distorting effects, would be preferred to other policy options that would add additional distorting effects to the economy. Looking ahead, the Chinese government should get prepared for mitigating the negative impacts of CBTAs because its economy could be adversely affected.     

Do urbanization and industrialization affect energy intensity in developing countries?

Against a backdrop of concerns about climate change, peak oil, and energy security issues, reducing energy intensity is often advocated as a way to at least partially mitigate these impacts. This study uses recently developed heterogeneous panel regression techniques like mean group estimators and common correlated effects estimators to model the impact that income, urbanization and industrialization has on energy intensity for a panel of 76 developing countries. In the long-run, a 1% increase in income reduces energy intensity by − 0.45% to − 0.35%. Long-run industrialization elasticities are in the range 0.07 to 0.12. The impact of urbanization on energy intensity is mixed. In specifications where the estimated coefficient on urbanization is statistically significant, it is slightly larger than unity. The implications of these results for energy policy are discussed.     

How does daylight saving time affect electricity demand? An answer using aggregate data from a natural experiment in Western Australia

Daylight saving time (DST) affects the lives of more than 1.6 billion people worldwide, with energy saving being the original rationale for its implementation. This study takes advantage of natural experiment data from September 2006 to March 2013 in Western Australia in which DST was observed from December 2006 to March 2009, to estimate the effect of DST on electricity demand. Using the difference-in-differences (DD) approach, we find that DST has little effect on overall electricity demand and electricity generation costs. However, it has a strong redistributional effect by reducing electricity demand substantially in the late afternoon and early evening. This redistributional effect of DST may be of particular interest for policymakers who are interested in controlling high demand and the short term energy market price.     

China’s emissions embodied in exports: How regional and trade heterogeneity matter

Trade facilitates the shifts of emissions from one place to another. Although studies have shown that regionally disaggregated model and model that distinguishes processing exports at the national level are necessary to estimate the embodied emissions in China's exports, no study evaluates this issue by simultaneously taking both regional and trade heterogeneity into account. To fill this gap, we re-estimate the CO₂ emissions embodied in China’s exports at both regional and industrial level, by using the newly-developed inter-regional input-output (IRIOP) model that distinguishes processing trade from other trade at the regional level. Results show that compared to the IRIOP model, the traditional multi-regional input-output (MRIO) model has overestimated the environmental loss from exports by 14%–25% in 2002 and 7%–20% in 2012 for different regions. The largest bias is found in regions and industries with the highest processing export shares. Therefore, the IRIOP model gives more accurate accounting on the regional environmental loss due to national exports and thus is important for establishing effective emission mitigation policies.     

Coal utilization in industrial boilers in China —a prospect for mitigating CO2 emissions

It is estimated from GEF statistical data for 1991 that more than 500,000 industrial boilers (mostly stoker-fired) in China consume over 400 million tons of coal per year. Each year, because of low boiler efficiency, 75 million tons of coal is wasted and 130 million tons of excess CO₂ are emitted. An analysis of 250 boiler thermal-balance test certificates and 6 field visits in three provinces have shown that: (1) boilers with efficiencies of less than 70% account for 75% of the total boiler-population; (2) the main causes of the low efficiencies are high excess air and unburned carbon in the slag and fly ash. The effect of unburned carbon on CO₂ emission is a balance of positive and negative contributions: while the unburned carbon does not produce CO₂ emissions, its replacement carbon, burned at a low efficiency, contributes to a net increase in CO₂ emissions. It seems from the analysis that the average boiler efficiency can be raised to 73% by relatively simple means, such as the size grading of the coal, improved boiler operating practice and some inexpensive equipment modifications. This could then result in savings each year of 34 million tons of coal and a reduction in CO₂ emissions of 63 million tons at an estimated cost of $10 per ton of CO₂.     

How much wind energy will be curtailed on the 2020 Irish power system?

This paper describes a model of the 2020 Irish electricity system which was developed and solved in a mixed integer programming, unit commitment and economic dispatch tool called PLEXOS^®. The model includes all generators on the island of Ireland, a simplified representation of the neighbouring British system including proposed wind capacity and interconnectors between the two systems. The level of wind curtailment is determined under varying levels of three influencing factors. The first factor is the amount of offshore wind, the second is the allowed limit of system non-synchronous penetration (SNSP) and the third is inclusion or exclusion of transmission constraints. A binding constraint, resulting from the 2020 EU renewable energy targets, is that 37% of generation comes from wind. When the SNSP limit was increased from 60% to 75% there was a reduction in wind curtailment from 14% to 7%, with a further reduction when the proportion of wind capacity installed offshore was increased. Wind curtailment in the range of SNSP limit of 70–100% is influenced primarily by the inclusion of transmission constraints. Large changes in the dispatch of conventional generators were also evident due to the imposition of SNSP limits and transmission constraints.     

Carbon emissions in China: How far can new efforts bend the curve?

While China is on track to meet its global climate commitments through 2020, China's post-2020 CO₂ emissions trajectory is highly uncertain, with projections varying widely across studies. Over the past year, the Chinese government has announced new policy directives to deepen economic reform, to protect the environment, and to limit fossil energy use in China. To evaluate how new policy directives could affect energy and climate change outcomes, we simulate two levels of policy effort—a continued effort scenario that extends current policies beyond 2020 and an accelerated effort scenario that reflects newly announced policies—on the evolution of China's energy and economic system over the next several decades. We perform simulations using the China-in-Global Energy Model, C-GEM, a bespoke recursive-dynamic computable general equilibrium model with global coverage and detailed calibration of China's economy and future trends. Importantly, we find that both levels of policy effort would bend down the CO₂ emissions trajectory before 2050 without undermining economic development. Specifically, in the accelerated effort scenario, we find that coal use peaks around 2020, and CO₂ emissions level off around 2030 at 10 bmt, without undermining continued economic growth consistent with China reaching the status of a “well-off society” by 2050.