Potential impacts of industrial structure on energy consumption and CO 2 emission: A case study of Beijing

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1 北京理工大学能源与环境政策研究中心 Center for Energy & Environmental Policy Research, BIT Sustainable Production and Consumption Conference: Global Transitions to Sustainable Production and Consumption Systems Potential impacts of industrial structure on energy consumption and CO 2 emission: A case study of Beijing Zhifu Mi Fudan University Shanghai, China June 8,

2 Contents Introduction Methodology Data sources Result analysis and discussions Conclusions 2

3 Contents Introduction Methodology Data sources Result analysis and discussions Conclusions 3

4 Introduction China enjoyed a rapid development ( ). GDP: 10.4% yr -1 Household consumption: 7.0% yr -1 Urbanization rate: 51.3% (in 2011) Outstanding of external debts: 695 billion US$ (in 2011) 4

5 Introduction China enjoyed a rapid development ( ). GDP: 10.4% yr -1 Household consumption: 7.0% yr -1 Urbanization rate: 51.3% (in 2011) Outstanding of external debts: 695 billion US$ (in 2011) BUT 5

6 Introduction China enjoyed a rapid development ( ). GDP: 10.4% yr -1 Household consumption: 7.0% yr -1 Urbanization rate: 51.3% (in 2011) Outstanding of external debts: 695 billion US$ (in 2011) BUT China s current development model is unbalanced, uncoordinated, and unsustainable. Chairman Jinping Xi, November 2013 (3 rd Plenum, 18 th Central Committee) 6

7 Challenges Energy supply GDP and energy consumption from 1990 to

8 Challenges Energy supply 6.2% yr -1 GDP and energy consumption from 1990 to

9 Challenges Energy supply 6.2% yr -1 GDP and energy consumption from 1990 to 2011 Composition of oil consumption in

10 Challenges Energy supply Climate change Total CO 2 emissions from fossil-fuels 10

11 Challenges Energy supply Climate change Total CO 2 emissions from fossil-fuels 11

12 Challenges Energy supply Climate change Environmental pollution 12

13 Challenges Energy supply Climate change Environmental pollution Fog and haze (PM 2.5) 13

14 Resource-conserving and environmentally friendly society It is necessary to develop a resource-conserving and environmentally friendly society. Industrial structure is one of the most important factors to determine the energy consumption and CO 2 emission (Kim and Worrell, 2002; Liao et al., 2007; IPCC, 2014). 14

15 Motivation Take Beijing as a case study to: Assess the potential impacts of industrial structure on energy consumption and CO 2 emission. Give suggestions on industrial structure adjustment. 15

16 Contents Introduction Methodology Data sources Result analysis and discussions Conclusions 16

17 Methodology: Objectives Objective 1: Maximization of GDP Objective 2: Minimization of energy consumption 17

18 Methodology: Constraints 18

19 Methodology: Constraints Input-Output model Economic development Employment Industry diversity Energy consumption CO 2 emission Consumption and investment Nonnegative 19

20 Contents Introduction Methodology Data sources Result analysis and discussions Conclusions 20

21 Data sources Beijing Input-Output Table Beijing Statistical Yearbook Use the data in 2010 to assess the potential impacts of industrial structure in

22 Sector full names and their codes Code Full name of sector Code Full name of sector S1 Farming, Forestry, Animal Husbandry and Fishery S22 Scrap and Waste S2 Mining and Washing of Coal S23 Production and Supply of Electric Power and Heat Power S3 Extraction of Petroleum and Natural Gas S24 Production and Distribution of Gas S4 Mining of Metal Ores S25 Production and Distribution of Water S5 Mining and Processing of Nonmetal Ores S26 Construction S6 Manufacture of Foods and Tobacco S27 Transportation and Storage S7 Manufacture of Textile S28 Posts and Telecommunications S8 Manufacture of Textile Wearing Apparel, Footwear, Caps, Leather, Fur, Feather (Down) and Its products S29 Information Transmission, Computer Service and Software S9 Processing of Timbers and Manufacture of Furniture S30 Wholesale Trade and Retail Trade S10 Papermaking, Printing and Manufacture of Articles for Culture, Education and Sports Activities S31 Hotel and Restaurants S11 Processing of Petroleum, Coking, Processing of Nuclear Fuel S32 Finance S12 Chemical Industry S33 Real Estate Trade S13 Manufacture of Nonmetallic Mineral Products S34 Tenancy and Commercial Service S14 Smelting and Rolling of Metals S35 Research and Development Service S15 Manufacture of Metal Products S36 Compositive Technical Service S16 Manufacture of General Purpose and Special Purpose Machinery S37 Water, Environment and Municipal Engineering Conservancy S17 Manufacture of Transport Equipment S38 Resident Services and Other Services S18 Manufacture of Electrical Machinery and Equipment S39 Education S19 Manufacture of Communication Equipment, Computer and Other Electronic Equipment S40 Health Care, Social Security and Social Welfare Manufacture of Measuring Instrument and Machinery for Cultural S20 S41 Culture, Art, Sports and Recreation Activity and Office Work 22 S21 Manufacture of Artwork, Other Manufacture S42 Public Manage and Social Organization

23 Contents Introduction Methodology Data sources Result analysis and discussions Conclusions 23

24 Industrial structure adjustment saves energy and reduces CO 2 emission remarkably Industrial structure adjustment can save energy by 39.42% (50.06 Mtce), and reduce CO 2 emission by 46.06% (96.31 Mt). 24

25 Sectors which are low energy intensive and low carbon intensive develop fast 25

26 Sectors which are low energy intensive and low carbon intensive develop fast S32 (Finance): 18.69% yr -1 S29 (Information Transmission, Computer Service and 26 Software): 16.23% yr -1

27 Sectors which are high energy intensive and high carbon intensive develop slow S2-S26 (Secondary industry): 2.26% yr -1 S22 (Scrap and Waste): 1.04% yr -1 27

28 The proportion of tertiary industry increases Tertiary industry: 75.11% to 85.90% Secondary industry: 24.01% to 13.53% 28

29 Contents Introduction Methodology Data sources Result analysis and discussions Conclusions 29

30 Conclusions Industrial structure adjustment has great potential of energy conservation and carbon reduction. Industrial structure adjustment can save energy by 40%, and reduce CO 2 emission by 46% in Beijing in

31 Conclusions Raising the proportion of sectors which are low energy intensive and low carbon intensive is an effective method to save energy and reduce carbon emission. Beijing had better strive to develop S32 (Finance) and S29 (Information Transmission, Computer Service and Software). The development of S22 (Scrap and Waste) and S7 (Manufacture of Textile) had better be strictly controlled. 31

32 Conclusions Energy intensity is possible to decrease without negatively affecting economic growth by reasonable industrial structure adjustment. The average annual growth rate of GDP is 8.29%. Energy intensity declines by 39.42%. 32

33 Thanks! 33