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Lin2014 PDF
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Energy
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Article history: As one of the six highest energy-consuming industries, non-metallic mineral products industry accounts
Received 23 October 2013 for 9.5% of national energy usage and 9.0% of energy-related CO2 (carbon dioxide) emissions in China. In
Received in revised form this paper, we evaluate the CO2 emissions change from energy consumption and present a compre-
11 January 2014
hensive picture of the underlying determinants of emissions change in the Chinese non-metallic mineral
Accepted 18 January 2014
Available online 20 February 2014
products industry for the period 1986e2010, based on the LMDI (Logarithmic Mean Divisia Index)
method. Results demonstrate that industrial activity is the leading force explaining emission increase
while energy intensity is the major contributor to the emission mitigation. Effects of industrial scale and
Keywords:
CO2 emissions change
carbon intensity of energy show varying trends interchanging intervals of growth along the study period.
Energy consumption Moreover, substitution effect has a small negative impact on the increase of CO2 emissions. Reduction
The LMDI method potential of CO2 emissions is predicted to be 99.02 Mt in 2020 under the scenario of moderate emission
Emission reduction potential reduction, which accounts for 0.30% of the world’s energy-related CO2 emissions in 2011; and 188.88 Mt
Non-metallic mineral products industry under the scenario of aggressive emission reduction, which accounts for 0.58% of the world’s total in
China 2011 and is close to energy-related CO2 emissions of Egypt in 2010. Policy recommendations are thus
made for future emission reductions.
Ó 2014 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.energy.2014.01.069
0360-5442/Ó 2014 Elsevier Ltd. All rights reserved.
B. Lin, X. Ouyang / Energy 68 (2014) 688e697 689
dominated by coal, of which the consumption accounted for 7.3% of application and flexibility, Ang et al. [21] concluded that the LMDI
national, 7.7% of industrial and 19.5% of manufactural coal usage in methods, in particular LMDI I, have several advantages over other
2011. Considering the competitive price and relative abundant re- perfect decomposition methods in energy and environmental
sources of coal, coal-dominated energy structure is difficult to analysis. Aiming at handling zero values in the LMDI approach, Ang
reverse in the short term [7]; and it is clear that China’s future and Liu [22] compared the SV (small value) and AL (analytical limit)
economic growth is unsustainable [8]. Therefore, considering its strategies, and extended earlier works by generalizing the analyt-
representativeness, it is crucial to capture determinants of energy- ical limits of LMDI. In order to expand research, Ang et al. [23]
related CO2 emissions change in the Chinese non-metallic mineral analyzed the relationship between LMDI II and LMDI I, and
products industry. further supported the recommendation made by Ang [11] that
LMDI is the “preferred” IDA method.
1.2. The contribution of this study Applications of the LMDI method in investigating carbon
emissions have been initiated in a number of earlier studies. In this
Both energy consumption and the related CO2 emissions in the article, we review the recent studies as well as major determinants
Chinese non-metallic mineral products industry have shown up- of CO2 emissions change in chronological order. By applying the
ward trends over the years. On the other hand, China’s urbanization LMDI method, Wang et al. [24] analyzed the change of aggregated
and industrialization process will not come to an end until 2020 [9], CO2 emissions in China from 1957 to 2000. Results indicated that
implying that the industrial growth will still be the leading force energy intensity, fuel switching and renewable energy penetration
driving economic growth and energy consumption. The challenge exhibited positive effects to the decrease in CO2. Liu et al. [25]
of CO2 emissions reduction from the non-metallic mineral products analyzed the change of industrial carbon emissions from 36 in-
industry is particularly important because of its key role in ur- dustrial sectors in China over the period 1998e2005 and showed
banization process and the realization of China’s transition into a that the overwhelming contributors to the change of China’s in-
low-carbon economy. In this context, this paper intends to address dustrial sectors’ carbon emissions were industrial activity and en-
the following important questions: First, what are the major factors ergy intensity. Ma and Stern [26] focused on the fall and resurgence
that influence CO2 emissions change from energy consumption in in China’s carbon emissions since the mid-1990s. Results demon-
the Chinese non-metallic mineral products industry? Second, what strated that the positive effect of population growth had been
degree of influence of each factor? Third, how much emission decreasing over the period 1971e2003. Malla [27] examined the
reduction potential does the non-metallic mineral products in- role of three factors (electricity production, electricity generation
dustry have? Fourth, what policy implications can we draw in the structure and energy intensity of electricity generation) affecting
aspect of mitigating CO2 emissions from industrial sectors in China? the evolution of CO2 emissions from electricity generation in seven
Answers to these questions are meaningful for the low-carbon AsiaePacific and North American countries. Results showed that
transition strategy in China as well as the sustainable develop- production was the major factor responsible for rise in CO2 emis-
ment of industrial sectors. China’s economic and industrial devel- sions while energy intensity was responsible for modest reduction
opment will face the issue of transition when economic growth in CO2 emissions during the period 1990e2005. Zhao et al. [28]
slows down after 2020. The industrial development will no longer decomposed the influencing factors of ICE (industrial carbon
be extensive and supported by wasteful energy consumption; more emissions) in Shanghai, China. Results demonstrated that the in-
importantly, it will be constrained by a low-carbon economy. dustrial output was the main driving force of ICE while energy
The remainder of this paper is structured as follows. Section 2 intensity, energy adjustment and industrial structure were major
presents the literature review. Section 3 describes the methodol- determinants for reduction of ICE. Zha et al. [29] investigated fac-
ogy and data source and provides an overview of the industry. tors that may affect the changes of energy-related CO2 emissions
Section 4 discusses the empirical results of our study. Section 5 from urban and rural residential energy consumption during 1991e
summarizes our findings and provides policy recommendations. 2004. Results showed that energy intensity and the income effects,
respectively, contributed most to the decline and the increase of
2. Literature residential CO2 emissions for both urban and rural China. Oh et al.
[30] analyzed the specific trends and influencing factors that had
With the global warming becoming a serious issue in the world, caused changes in emission patterns in economic sectors in South
decomposition analysis of CO2 emissions has been a hot issue in Korea over 1990e2005. Results indicated that economic growth
academia since the 1980s. In the application areas, there have been was a dominant explanation for the increase in CO2 emissions in
more studies dealing with industrial energy usage and energy- manufacturing, services and residential sectors, while energy in-
related gas emissions [10]. The advantages of the IDA (index tensity was an important driver of CO2 reduction in most sectors
decomposition analysis) are that it assesses the driving forces that except for several manufacturing sub-sectors. Akbostancı et al. [31]
underlie CO2 emissions change and presents implications for CO2 decomposed the changes in the CO2 emissions of Turkish
emissions mitigation [11]. There are a set of decomposition manufacturing industry and found that industrial activity and en-
methods linked to the Divisia index [12,13] and the Laspeyres index ergy intensity were the primary factors determining CO2 emissions
[14] in the index decomposition analysis. Within the Divisia index, change. Zhang et al. [32] decomposed energy-related carbon
the LMDI (logarithmic mean Divisia index) method was first emissions of 30 provinces in China during 1995e2009 by four
introduced by Ang and Choi [15], Ang et al. [16], which can be causal factors e GDP (gross domestic products), economic struc-
conveniently applied in comparative studies of cross-country/ ture, energy intensity, and fuel mix. Results demonstrated that GDP
region energy and environmental issues [17,18]; therefore, it was and energy intensity were the major factors contributing to the CO2
recommended as the preferred method because of its theoretical emissions change. Liu et al. [33] explored driving forces of China’s
foundation, adaptability, ease of use and result interpretation [11]. regional and sectoral GHG emission. Results indicated that the
Ang [19] further presented a useful guide of the LMDI approach. In inequity of technology level among regions was a main barrier for
2001, Ang and Liu [20] presented a new energy decomposition China’s CO2 mitigation. Hammond and Norman [34] used LMDI
method, called the Log-Mean Divisia Index Method I (LMDI I) and method to separate the contributions of changes in output, indus-
concluded that the method has the desirable properties of perfect trial structure, energy intensity, fuel mix and electricity emission
decomposition and consistency in aggregation. In terms of ease of factor to the reduction in energy-related carbon emissions from UK
690 B. Lin, X. Ouyang / Energy 68 (2014) 688e697
manufacturing. Results showed that the reduction in energy in- 3.1.2. Decomposition method
tensity was the primary reason for the fall in emissions between This paper adopts the Logarithmic Mean Divisia Index (LMDI)
1990 and 2007. Fujii et al. [35] analyzed the effects of the changes method to analyze CO2 emissions change from energy consump-
made in China’s industrial sector on the three main air pollutants tion. The change in CO2 emissions of the Chinese non-metallic
between 1998 and 2009. Shao et al. [36] analyzed carbon emissions mineral products industry (DCO2) between a base year 0 and an
from energy consumption of the industrial sector in City Tianjin, end year T can be decomposed into the effects of (i) the change in CI
China. Results showed that improvements in energy utilization (carbon emissions per unit of fossil-fuel, termed the carbon in-
efficiency were the most important contributors to effective in- tensity effect, CIeff); (ii) the change in S (the share of fossil fuels in
dustrial energy conservation and emission reductions. total energy, termed the substitution effect, Seff); (iii) the change in
From the present literature, although the application of LMDI EI (energy consumption per unit of industrial value added, termed
method is mainly in the area of industrial energy and environmental the energy intensity effect, EIeff); (vi) the change in IA (the indus-
analysis, research on energy-related CO2 emissions in China’s in- trial value added per worker, termed the industrial activity effect,
dustrial sectors is still limited. Moreover, to the best of our knowl- IAeff) and (v) the change in IS (employment; termed the industrial
edge, no studies have been conducted on CO2 emissions change in structural effect, ISeff):
the Chinese non-metallic mineral products industry in spite of its
important role in China’s energy demand and related CO2 emissions. DCO2 ¼ CO2 ðTÞ CO2 ð0Þ ¼ CIeff þ Seff þ EIeff þ IAeff þ ISeff (4)
The effects, in turn, can be calculated from the following formula
3. Methodology and data source using the LMDI method:
where
X
16 X
16 Productions of other major products such as plate glass and ce-
CO2 ¼ CO2 ¼ Ei *CFi *CCi *COFi *ð44=12Þ (17) ramics also ranked top in the world.
i¼1 i¼1 Production growth in the non-metallic mineral products in-
In which, CO2 stands for the energy-related carbon dioxide dustry has led to rapid increase in energy consumption. During the
emissions; i represents the i-th energy; CFi is the conversion factor period 1985e2010, fossil fuel energy consumption (excluding elec-
from physical unit to kJoule (in this paper, the calculation took the tricity) increased from 77.47 Mtce to 244.63 Mtce; energy-related
Appendix IV in China energy statistical yearbooks for reference carbon dioxide emissions grew from 185.05 Mt to 507.29 Mt, an
[40]); CCi is carbon content coefficient of fuel type i, which is increase of 174.14%. The trends of fossil-fuel energy consumption
collected from the Intergovernmental Panel on Climate Change and CO2 emissions in the Chinese non-metallic mineral products
[41]; COFi is the carbon oxidation factor; and 44/12 is the conver- industry during 1985e2010 are shown in Fig. 1.
sion factor from carbon to carbon dioxide. In summary, CFi*CCi*- The average annual growth rate of fossil-fuel energy consump-
COFi*44/12 is the coefficient of carbon dioxide emissions for the i-th tion was 4.98% during 1985e2010, and energy-related CO2 emis-
energy, which is assumed constant over time. In order to avoid the sions were drove up by 4.49% annually. It is worth noting that both
double counting of CO2 emissions from the power generation in- fossil fuel energy consumption and the related CO2 emissions
dustry, electricity consumption is regarded as clean. increased significantly after 2002 due to China’s accelerated pro-
However, we should note the limitations of the LMDI method- cess of urbanization. The average annual growth rate of fossil-fuel
ology in the aspect of application due to the use of current value for energy consumption during 2003e2008 reached 12.41%, which
energy content, conversion rates of different energy sources from drove up the growth of related CO2 emissions at the rate of 12.08%.
physical unit to kJoule, and emission factors in defining the emis- Energy consumption structure of the Chinese non-metallic
sion performance of energy in a time-series analysis [7]. mineral products industry was dominated by coal, of which the
consumption increased from 86.14 Mt in 1985 to 250.32 Mt in 2010
with an annual growth rate of 4.63%. The growth rates of natural
3.2.2. Industry overview gas and electricity consumption were the highest among different
Non-metallic mineral products industry is a pillar industry in types of energy. Specifically, natural gas consumption increased
China, of which the value added contributes to nearly one percent from 180 million cubic meters in 1985e6376.4 million cubic meters
of the GDP (gross domestic products) each year [42]. In 2011, main in 2011 with the annual growth rate of 24.60%; electricity con-
business income of the non-metallic mineral products industry sumption grew from 22.16 billion kWh to 291.79 billion kWh dur-
amounted to 3929.48 billion CNY, accounting for 4.67% that of the ing the same period, of which the annual growth rate was 10.58%.
industrial sector [43]. Particularly, it greatly supports the under- The significant decline in coal consumption during 2000e2002 was
going rapid urbanization process in China, which propels the large- mainly due to the industrial restructuring, during which, a large
scale construction of urban infrastructure and housing and requires number of small companies went bankrupt. However, coal con-
huge quantities of cement. As the world’s largest cement consumer, sumption rose sharply back after 2003 due to the fixed asset in-
China consumed 2048 metric tons of cement in the year 2011. The vestment growth and the overheated real estate industry. As shown
large quantity of cement could only have been produced at home, in Fig. 2, coal is the major contributor to CO2 emissions, followed by
because no other country could afford supplying such large-scale fuel oil and coke. During 1985e2011, the average proportion of CO2
raw materials [44]. On the other hand, the growth of the Chinese emissions from coal consumption in the total CO2 emissions in the
non-metallic mineral products industry is driven by the infra- Chinese non-metallic mineral products industry was up to 90.60%;
structure boost and will be further pushed ahead by national policy and the average proportions of CO2 emissions from the consump-
[45]. The industrial valued added (IVA) increased greatly over the tion of fuel oil and coke were 3.49% and 2.52%, respectively.
past three decades from 20.79 billion CNY in 1985 to 337.76 billion It can be seen from Fig. 2, coal played a key role in the total CO2
CNY in 2010 (at 1990 constant prices). The average annual growth emissions in the Chinese non-metallic mineral products industry.
rate of IVA was 12.82% during 1985e2010, which was higher than Most of the increase in the CO2 emissions during the study period
that of the GDP. Take the production volume of cement for example. derived from the growth of coal consumption and coal-dominated
Since 1985, China has kept the record of the world’s largest cement energy structure. Similarly, the decrease in CO2 emissions during
producer. Cement output increased from 144.28 Mt in 1985e the period of 2000e2002 (industrial restructuring) was driven by the
2184.04 Mt in 2010 e equivalent to a growth of 1413.66% [43]. reduction of coal consumption. Energy diversification helped to
692 B. Lin, X. Ouyang / Energy 68 (2014) 688e697
during 1986e2010 (Fig. 3) for the following two reasons: first, China’s
national economic planning, which has significant impacts on the
macro-economy as well as the energy system, is based on the five-
year time interval; second, the impact of each factor on CO2 emis-
sions change among time intervals can be captured and compared.
Results show that there have been significant CO2 emissions
changes in the Chinese non-metallic mineral products industry
over the last 26 years. Identifying reasons of CO2 emissions change
would be helpful for policy design on mitigating the increase in CO2
emissions. As shown in Fig. 3, IA (industrial activity) effect was the
main force that led to the increase in CO2 emissions while EI (en-
ergy intensity) effect was the major contributor to the decline in
CO2 emissions. The IS (industrial scale) effect on CO2 change was
unstable among time intervals. In general, it contributed to the
increase in CO2 emissions. However, the IS effect led to the signif-
icant decline in CO2 emissions from 1996 to 2000 because of in-
Fig. 2. Carbon dioxide emissions from energy consumption in the Chinese non-
dustrial restructuring. During the restructuring period, a large
metallic mineral products industry. number of private and small enterprises as well as the state-owned
Source: China Energy Statistical Yearbook [40]. companies went bankrupt, and lots of workers were laid off.
Shrinking industrial scale resulted in the decline in energy con-
sumption as well as the corresponding CO2 emissions. Moreover,
reduce the share of coal. Natural gas consumption increased
the substitution (S) effect contributed to CO2 emissions decrease
dramatically after 2004, of which the average growth rate during
even though the degree of influence was quite small. The effect of
2004e2011 was as high as 67.57%. During the same period, the
carbon intensity of energy (CI) showed a varying trend inter-
growth of electricity consumption reached 13.68%. In conclusion, the
changing intervals (increasing and decreasing) during 1986e2010;
substitution of cleaner energy to coal helped to mitigate the growth of
however, it was the cause for the decrease in CO2 emissions. The
CO2 emissions in the Chinese non-metallic mineral products industry.
above main results are consistent with the study of Ang [46], which
showed that energy intensity (energy/GDP) had a greater impact on
4. Results and discussion energy-related carbon emissions than carbon intensity of energy
(carbon/energy).
4.1. Carbon dioxide emissions change during time intervals In order to conduct in-depth analysis, we analyze the influence of
each effect during the study period by degree. We observe that the
Decomposition analysis can quantify the impact of each deter- biggest contributor to the emissions increase was industrial activity
minant on CO2 emissions change from energy consumption by de- (IA) effect, which contributed 224.34 Mt CO2 during 1996e2000 and
gree. In this article, the study period is split into five time intervals 217.44 Mt CO2 during 2001e2005, the highest amounts during the
Fig. 3. Decomposition of CO2 emissions changes from energy consumption in the Chinese non-metallic mineral products industry.
B. Lin, X. Ouyang / Energy 68 (2014) 688e697 693
Table 1
Hypothesis of variables (Unit: %).
Scenarios CI S EI IA IS
employment (g) for the forecasting year are given as exogenous, the
prediction of future energy-related CO2 emissions of the Chinese
non-metallic mineral products industry can be made based on
equations (11)e(16).
In this paper, we estimate the future CO2 emissions of the Chi-
nese non-metallic mineral products industry in 2020. The year
2020 is an important time node for China, because the rapid ur-
banization and industrialization process of China is expected to
Fig. 5. Aggregated effects of contributors to energy-related CO2 emissions change in
come to an end in 2020 [47]; more importantly, the modification of
the Chinese non-metallic mineral products industry. both industrial structure and energy consumption structure could
be realized after 2020. In order to evaluate the degree of influence
of each factor on the future CO2 emissions, we set three scenarios to
121.73% during 1986e2010. Meanwhile, the major contributor to the
provide a comprehensive comparison of results. Similar scenario
decline of CO2 emission change was energy intensity (EI) effect. The
analysis has been applied by Ou et al. [48], IEA [49], Zhang et al. [50]
negative contribution increased from 15.25 Mt in 1986 to 486.46 Mt
and so on and so forth.
in 2010. The average annual growth rate of EI effect, which was
The three scenarios are as follows: (i) BAU (business as usual)
lower than that of the IA effect, was 109.22% during 1986e2010.
scenario, of which the set is based on the historical development
Although the impact was small, the substitution (S) effect
trend of each factor. The parameters chosen for BAU in this paper
contributed to the decline of CO2 emissions change over the study
are the average growth rate of each variable (CI, S, EI, IA, IS) during
period. The small effect also illustrated that energy structure of the
Chinese non-metallic mineral products industry was still domi- 1986e2010. A BAU scenario reflects the possible variation trend
indeed; however, the purpose of a BAU scenario is not to provide
nated by coal. The effect of carbon intensity of energy (CI) showed a
varying trend in several years; however, it contributed to the precise estimates of the specific economic conditions but to make
clarifications of the major factors that contribute to the future CO2
decline of CO2 emissions change overall. The decline in CO2 emis-
sions contributed by the CI effect increased from 1.42 Mt in 1987 to emissions. Moreover, it is the benchmark for setting other two
scenarios. (ii) Scenario 1, the higher-emission scenario, of which
49.09 Mt in 2010 compared with the base year 1986.
The effect of industrial scale (IS) was also unstable during the the growth rate of each factor is two percentages higher than that
in the BAU scenario. (iii) Scenario 2, the lower-emission scenario,
study period. However, it was the third most influential factor
among variables, which was worthy of our attention. During 1987e of which the growth rate of each factor is two percentages lower
than that in the BAU scenario. As previously mentioned, the set of
1997, the IS effect contributed to the increase in CO2 emissions
change expect for the year 1990. However, even though the impact other two scenarios are based on the BAU scenario. The advantage
of the scenario analysis is that we can have a relatively compre-
of IS effect on CO2 emissions change was negative, it was quite
small (0.94 Mt). Afterward, the IS effect contributed to the CO2 hensive analysis on the possible results of CO2 emissions, so that
different policies on energy utilization and carbon dioxide emis-
emissions decrease. The negative impacts on CO2 emissions
increased from 104.10 Mt in 1998 to 155.59 Mt in 2005, the peak of sions can be compared. Hypothesis of variables is shown in Table 1.
Based on the hypothesis above, estimates of CO2 emissions from
amount of decreased CO2, and then dropped to 83.47 Mt in 2010.
The negative impacts of IS effect on the CO2 emissions increase may energy consumption in the Chinese non-metallic mineral products
industry in 2020 are shown in Fig. 6. The scenario-differentiated
due to the industrial consolidation and the elimination of backward
production capacity, which were beneficial to energy conservation growth rates of explanatory variables, which consider factors such
as the actual growth conditions, the growth promoted by urbaniza-
and energy use reduction.
In summary, the major contributors to CO2 emissions change in tion and the possible adaptations to the low-carbon development in
the Chinese non-metallic mineral products industry, are reasonable.
the Chinese non-metallic mineral products industry were factors of
industrial activity (IA) and energy intensity (IE). The effect of in- As shown in Fig. 6, CO2 emissions from energy consumption in
the Chinese building materials industry will keep increasing. It can
dustrial scale (IS), which varied during our study period, indicated
be explained by two reasons: first, industrial energy demand will
significant negative impacts on the CO2 emissions increase during
keep growing in the urbanization and industrialization stage [9,51];
1998e2010. Although the impacts were quite small, the effects of
second, industrial energy consumption structure will remain stable
carbon intensity of energy (CI) and substitution (S) also contributed
during the rapid economic development process [7].
to the decrease of CO2 emissions.
Under the BAU scenario, CO2 emissions from energy consump-
tion of the Chinese non-metallic mineral products industry in 2020
4.4. Emission reduction potential
are predicted to be 953.22 Mt, accounting for 10.12% of China’s total
CO2 emissions.2 In addition, CO2 emissions from energy
4.4.1. Estimates of energy-related CO2 emissions
According to equation (3), CO2(0) ¼ CI(0)*S(0)*EI(0)*IA(0)*IS(0)
for the base year 2011 can be calculated If the change rates of the 2
The share of CO2 emissions from energy consumption of the Chinese non-
CO2 emissions per unit of fossil-fuel (a), the share of fossil fuels in metallic mineral products industry in China’s total CO2 emissions is based on the
total energy (b), energy consumption per unit of industrial value estimate from Lin and Liu [51], which shows that China’s CO2 emissions will reach
added (d), industrial value added per capita (f) and the 9.418 billion tons in 2020 under the baseline scenario.
B. Lin, X. Ouyang / Energy 68 (2014) 688e697 695
Table 2
Reduction potential of CO2 emissions in the Chinese non-metallic mineral products
industry and its impact on China’s total CO2 emissions.
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