Keywords
energy intensity, input-output tables, technical change, structural change
Start Date
1-7-2004 12:00 AM
Abstract
Energy consumption in China has attracted considerable research interest since the middle 1990s. This is largely prompted by the environmental ramifications of the extensive use of fossil fuels in the country to propel two decades of high economic growth. Since the late 1980s, there has been an increasing awareness on the part of the Chinese government of the imperative for the balance of economic growth and environmental protection. The government has since taken various measures ranging from encouraging energy-saving practice, controlling waste discharges to financing R and D programs on improving energy efficiency. Against this backdrop has seen a constant decline of the energy intensity of the economy, measured as the ratio of total energy consumed in standard coal equivalent to the real GDP since 1989. Using the 1987 and 1997 input-output tables for China, the present study examines the impact of technical and structural changes in the economy on industry fuel consumption over the 10-year period. Technical changes are reflected in changes in direct input-output coefficients, which capture the technical evolvement of intermediate production processes. Structural changes refer to shifts in the pattern of final demand for energy, including the import and export composition of various fuels. Six fuels are included in the study, namely, coal, oil, natural gas, electricity, petroleum and coke and gas, which cover all of the energy types available in the input-output tables. It is found that the predominant force of falling energy intensity was changes in direct energy input requirements in various industries. Such changes were responsible for a reduction in the consumption of four of the six fuels per unit of total output. Structural changes were not conducive for improving energy efficiency. These findings are consistent with previous studies, which used shorter timeframes of data. However, unlike the previous studies, technical changes are differentiated between direct and total input requirements. This allows the separation of the impacts on energy use of energy-saving technologies in the production process and of the externalities of such technologies due to input-output linkages.
Modelling Energy Consumption in China
Energy consumption in China has attracted considerable research interest since the middle 1990s. This is largely prompted by the environmental ramifications of the extensive use of fossil fuels in the country to propel two decades of high economic growth. Since the late 1980s, there has been an increasing awareness on the part of the Chinese government of the imperative for the balance of economic growth and environmental protection. The government has since taken various measures ranging from encouraging energy-saving practice, controlling waste discharges to financing R and D programs on improving energy efficiency. Against this backdrop has seen a constant decline of the energy intensity of the economy, measured as the ratio of total energy consumed in standard coal equivalent to the real GDP since 1989. Using the 1987 and 1997 input-output tables for China, the present study examines the impact of technical and structural changes in the economy on industry fuel consumption over the 10-year period. Technical changes are reflected in changes in direct input-output coefficients, which capture the technical evolvement of intermediate production processes. Structural changes refer to shifts in the pattern of final demand for energy, including the import and export composition of various fuels. Six fuels are included in the study, namely, coal, oil, natural gas, electricity, petroleum and coke and gas, which cover all of the energy types available in the input-output tables. It is found that the predominant force of falling energy intensity was changes in direct energy input requirements in various industries. Such changes were responsible for a reduction in the consumption of four of the six fuels per unit of total output. Structural changes were not conducive for improving energy efficiency. These findings are consistent with previous studies, which used shorter timeframes of data. However, unlike the previous studies, technical changes are differentiated between direct and total input requirements. This allows the separation of the impacts on energy use of energy-saving technologies in the production process and of the externalities of such technologies due to input-output linkages.
