Challenges of green consumption in China: a household energy use perspective

ABSTRACT

To encourage economic progress, China's government has been pushing domestic consumption as a substitute for its waning growth in investment and exports. It has also been promoting greener policies for growth, of which green consumerism is a prime component. By examining the economy through the lens of household energy consumption, this paper lays out the challenges the nation must overcome through green consumption. We explore the trends in household energy use and decompose energy used indirectly by households into six factors: changes in total population, urbanization rate, energy efficiency, interindustry input mix, household consumption preferences, and per capita household consumption level. Doing so yields insights into how progress in industrial technology, household income, urbanization, and lifestyles has affected energy use in the production of goods and services used by households. It also offers policy suggestions on how China might guide lifestyle changes to effect green consumption.

KEYWORDS:

• Household energy use
• urbanization
• lifestyle change
• structural decomposition analysis
• China

JEL CLASSIFICATION:

• C67
• O18
• P28

Acknowledgements

We thank the Journal's referees and Co-editor Manfred Lenzen for encouraging us to make many key points crystal clear.

Notes

Above we only show one side of the two polar decompositions. We actually examine both polar decompositions and use Fisher indices – their geometric means – to analyze results as per Dietzenbacher et al. (2000).

As suggested by Yang and Lahr (2010), this paper uses agriculture's producer price index for the primary sector and the free-on-board price index for the secondary sector to adjust prices. For the tertiary and construction industries, an implicit GDP price index (nominal GDP divided by real GDP of these industries) was used.

Here, direct energy use only refers to commercial energy. Non-commercial energy sources such as firewood, straw, and biogas are also important energy sources for rural residents. In 2007, the average non-commercial energy use per capita for rural residents was 357 kg SCE. Thus, rural households consumed far more direct energy when non-commercial energy is considered.

4 During China's planned regime of 1950–1980, China had established its central heating system. China's heating line is defined by the Huai River and Qinling Mountain. Places above the line is defined as the northern heating zone and can enjoy the central heating system with subsidies from the government, whereas no central heating would be provided to places below the heating line. Homes in the non-heating zone should install their own heating facilities.

Additional information

Funding

This research was supported by the National Science Foundation of China [grant numbers 71433007 and 71403118] and the Clean Development Mechanism Project of China's National Development and Reform Commission [grant number 2013056].