Energy Procedia 61 ( 2014 ) 1075 – 1079

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1876-6102 © 2014 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/).Peer-review under responsibility of the Organizing Committee of ICAE2014doi: 10.1016/j.egypro.2014.11.1026

The 6th International Conference on Applied Energy – ICAE2014

The dynamic features of final demand carbon footprint in China from 1997-2010——an input-output analysis

Qiao-Mei Lianga,b, Min Liua,b, Lan-Cui Liuc,* aCenter for Energy and Environmental Policy Research, Beijing Institute of Technology, 5 South Avenue, Zhongguancun

Haidian District Beijing 100081, China bSchool of Management and Economics, Beijing Institute of Technology, 5 South Avenue, Zhongguancun

Haidian District Beijing 100081, China cCenter for Climate and Environmental Policy, Chinese Academy of Environmental Planning, Ministry of Environmental Protection

of the People’s Republicof China, 10 Dayangfang, Beiyuan Road, Chaoyang District Beijing 100012, China

Abstract

In order to examine the development of carbon emissions in China from the source, with an input-output model, this study accounts the carbon footprint for different components of China’s final demand during the period 1997-2010. The results show that, carbon footprints of different final demand components all show increasing trends, except that export carbon footprints declined in 2010 compared to 2007. Capital formation ranks higher than both final consumption and exports, with regards to the total amount and average annual growth rate of emissions driven in recent years, and to emissions driven per unit value in the whole period analyzed. Urban household consumption contribute the most to the amount and growth of total emissions driven by final consumption, as well as emissions driven per unit expenditure. Construction is the main sector driving capital formation carbon footprints. The five major sectors that driving export carbon footprints include textiles, electronic equipment manufacturing, metal smelting and rolling processing, chemical, and general/special equipment manufacturing.

© 2014 The Authors. Published by Elsevier Ltd. Selection and/or peer-review under responsibility of ICAE

Key words: Carbon footprint; Input-output analysis; Final demand

1. Introduction

Examining carbon emissions from the perspective of final demand can help to evaluate a country’s emissions reduction potential from the source, and to grasp the industrial distribution of carbon footprint.

* Corresponding author. Tel.: +86-10-84947796-659; fax: +86-10-84947786. E-mail address: liulancui@163.com.

© 2014 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/).Peer-review under responsibility of the Organizing Committee of ICAE2014

1076 Qiao-Mei Liang et al. / Energy Procedia 61 ( 2014 ) 1075 – 1079

Such an analysis is important to planning related emissions reduction policies. Up to now there have been many studies about the final demand carbon footprint, focusing on one or

several components of final demand [1], on the driving factors of carbon emissions of a specific sector [2], on the source sectors of carbon emissions driven by final demand [3], etc.

Most of the related time-series studies focusing on China simply treated final demand carbon footprint as one point of analysis. That is, these studies only used the total amount of final demand as one of the variables [4], performed sectoral decomposition for the total amount of final demand [5], focused on one or several parts of final demand [5] [6], or only analyzed the effects of final demand components on a few energy-intensive industries [7]. This study aims to contribute by focusing on the development features of the final demand carbon footprint itself, and by specifically analyzing the total amount, contribution ratio, intensity (carbon footprint driven per unit value) and industrial distribution of the carbon footprints for all the three components of final demand in different years.

2. Methodology

This study uses the input-output analysis, the basic equation of which reflects the pulling effect of final demand on the whole economy, as shown in Eq.(1).

1( )X I A Y−= − (1)

Where A represents technology coefficient matrix whose element ija indicates the direct requirements of sector j on sector i for per unit output of sector j; X represents total output vector whose element ixindicates the output of sector i. Y represents the final demand vector whose element iy indicates the final demand for goods i; 1( )I A −− is the Leontief inverse matrix whose element ijb indicates the total amount of good i required both directly and indirectly to produce one unit of final demand for good j.

Assuming that there are n sectors, the relationship between sectoral carbon footprint and final demand could be established through introducing a carbon emission coefficient matrix, as shown in Eq.(2).

�1( )C E X E I A F−= ⋅ = − (2)

Where C is the n×1 matrix of final demand carbon footprint whose element ic represents the carbon footprint driven both directly and indirectly by final demand for good i; E represents the row vector of sectoral carbon emissions coefficient whose element indicates the direct CO2 emissions by per unit output of sector i; �F is the diagonal matrix of final demand for different commodities.

3. Results and discussions

3.1 Carbon footprint of different final demand components

As shown in Fig.1, the carbon footprint of final consumption, gross capital formation and export all showed a growing trend over time, except that of export falling by 12.5% in 2010 compared to 2007.

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Figure 1 Carbon footprint of different final demand components

As for the contribution proportion of each component to total carbon emissions, final consumption contributed the most, gross capital formation came second and export was minimal in 1997, 2000 and 2002. In 2005, 2007 and 2010, the contribution of capital formation occupied the first place and was significantly greater than final consumption and export especially in 2010, with the contributions of the latter two being close to each other in these three years.

Moreover, our results also show that, the carbon footprint per unit value of each final demand component gradually went down from 1997 -2002 (especially for that of capital formation and export), significantly increased from 2002- 2005 (especially for that of export), and showed a downward trend after 2005. The carbon footprint per unit value of gross capital formation was the largest in all the analyzed years, seconded by that of export.

3.2 Carbon footprint of final consumption

Final consumption includes household (rural and urban) and government consumption. As shown in Fig. 2, the contribution of rural household consumption in total final consumption carbon footprint kept declining during the analyzed period; the contribution of government consumption tended to be stable, being roughly around 20%; the contribution of urban household consumption has always been the largest and in a significant rising trend. Our results also show that, the carbon footprint per unit expenditure of urban households was always the highest during the whole analyzed period. Urban households were driving up carbon emissions mainly through their consumptions for other services, electricity industry and food processing.

Figure 2 Carbon footprint of final consumption

3.3 Carbon footprint of capital formation

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Capital formation consists of two parts, i.e. fixed capital formation and inventory. During the analyzed period, fixed capital formation contributed far greater to gross capital formation carbon footprint than inventory.

Construction was the most primary sector source of fixed capital formation carbon footprint. Its contribution accounted for 52% -69% during this period, which was much greater than other sectors. In addition, capital formation of transport equipment, electronic equipment manufacturing and general/special equipment manufacturing was also driving up relatively high carbon footprint, the total of which contributes 30% of all sectors.

3.4 Carbon footprint of exports

Our results show that, during the analyzed period, the five major sectors that driving export carbon footprints included textiles, electronic equipment manufacturing, metal smelting and rolling processing, chemical, and general/special equipment manufacturing.

Results indicate that electronic equipment manufacturing, textile industry and general/special equipment manufacturing were the sectors that have relatively large export volume while relatively low emissions driven per unit export value. Among them, the export of electronic equipment manufacturing was the largest in every analyzed year. The emissions driven per unit export value of textile industry were very low, ranking after 15 in each analyzed year. Therefore, for these two sectors, export volume was the most significant factor for its relatively large carbon emissions. The obvious contribution of metal processing in export carbon footprint was mainly due to its higher emission driven per unit export value (ranking 2-5 among all sectors), given that its export volume was relatively low (ranking 6-14 among all sectors). The exports and emissions driven per unit export value of general/special equipment manufacturing were low before 2002. After 2002, with its export volume rising and emissions driven perunit export value declining in volatility trend, export volume gradually became the major factor driving the obvious carbon footprint in general/special equipment manufacturing. The export volume of chemical industry in this period kept rising continually, ranking 3-5 among all sectors. The emissions driven per unit export value of chemical industry were also relatively high, ranking above average in all sectors. Therefore, exports and emissions driven per unit export value were both main reasons for the large export carbon footprint of chemical industry.

4. Policy recommendations

(1) Economic transformation from overheating investment to expanding domestic demand could have a positive effect for carbon emission reduction.

(2) The effects of the government’s recent series living-related policies on the emissions driven by households are uncertain: promoting urbanization and the income doubling plan would increase pressureson carbon reduction while the recent efforts of advocating the practice of frugality to every citizen will be favourable for carbon emission reduction.

(3) There are some problems in China’s current construction industry, such as short construction life and serious redundant construction. Thus, extending building life and reasonably planning construction projects will play a facilitating role in CO2 emission reduction.

(4) For the sectors with large export volume while pretty low emissions driven per unit value such as textiles and electronic equipment manufacturing, their production could still be encouraged. For the sectors showing opposite features such as metal processing, certain restriction could be performed.

Acknowledgements

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The authors gratefully acknowledge the financial support from the National Natural Science Foundation of China under Grant Nos. 71001007 and 71373099, the Program for New Century Excellent Talents in University under the Grant No. NCET-12-0039.

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Appendix A. Biography

Liang Qiao-Mei received her PhD degree in Management Science and Engineering from Chinese Academy of Science in 2007. She is now an Associate Professor in School of Management and Economics, Beijing Institute of Technology. Her main research interests are Energy complex system modeling, Energy and environmental policy.

Liu Min graduated as a Bachelor of Management in Shandong Jian Zhu University, 2012; he is currently majoring in Management Science and Engineering as a postgraduate in Center for Energy & Environmental Policy Research, Beijing Institute of Technology. His research field is co-benefits of energy and environmental policies.

Liu Lan-Cui received her PhD degree in Management Science and Engineering from Chinese Academy of Science in 2006. She is an Associate Professor and Director of Center for Climate and Environmental Policy, Chinese Academy of Environmental Planning. Her main research interests are Climate economics and policy, Environmental economics and policy.