Can Industrial Restructuring Significantly Reduce Energy Consumption? Evidence from China

ABSTRACT

This article uses China’s input–output (I-O) tables in 2002, 2007, and 2012 to estimate the real energy consumption of each sector after the I-O adjustment. The relationship between the sectors is further analyzed using the utility analysis method based on ecological network analysis. The empirical results show that although the traditional energy-intensive industries are the major energy-consuming sectors from a direct energy consumption perspective, large energy consumption by energy-intensive industries is transferred to downstream industries through intermediate products after the I-O adjustment. Specifically, the building industry and service sector are the sectors with the highest real energy consumption. With the upgrading and optimization of the industrial structure, the proportion of energy-intensive sectors in China is declining. However, the development of the service sector and infrastructure construction still requires large intermediate inputs. Thus, industrial restructuring cannot significantly reduce China’s total energy consumption.

KEY WORDS:

• industrial structure
• input–output table
• real energy consumption
• intermediate product

Notes

1. In order to calculate the proportion of China’s energy consumption in the total world, and to compare the energy consumption of China with the United States, the data used here are from BP (2016). It is worth noting that the data of BP (2016) are slightly different from NBS. According to the NBS, China’s primary energy consumption in 2002, 2007, and 2012 is 1695.77Mt, 3114.42 Mt, and 4021.38 Mt of standard coal, respectively, and the difference with BP is 2.68%, 1.87%, and 0.70%, respectively.

2. It was clearly stated in the Rules of Clarification of Three Industries (NBSC, 2013) that Chinese service sector is the tertiary industry by definition. The service sector refers to the industries except for the primary industry and the secondary industry.

3. It is worth noting that China’s energy statistics experienced two major revisions in 2009 and 2014 when the energy consumption data for the years of 1996–2007 and 2000–2013 were revised, respectively. For example, in 2009, the China’s total energy consumption in 2007 was revised from 2556 Mtce to 2802 Mtce; in 2014, China’s total energy consumption in 2007 was revised from 2802 Mtce to 3114 Mtce. In order for the comparability of data for different years, the energy consumption data used in this article are the data after the revision in 2014.

4. According to the 2012 input–output table of China, the sector of Building Industry includes construction of building, civil engineering, construction installation activities, construction completion and finishing, and other construction activities; the sector of Other Services Sectors includes information transmission, software and information technology services, finance, real estate, renting and leasing, business services, scientific research and development, technical services, management of water conservancy, environment and public facilities, services to households, repairs and other services, education, health care and social work activities, culture, sports and entertainment, public management, social security, and social organization.

5. The statistic caliber here refers to the division standard of OECD, which differs from the industry division of China’s National Bureau of Statistics. “Indirect use” in Figure 2 mainly refers to the raw materials used for petrochemical industry.

Additional information

Funding

The article is supported by the Grant for Collaborative Innovation Center for Energy Economics and Energy Policy (No. 1260-Z0210011), Xiamen University Flourish Plan Special Funding (No. 1260-Y07200), and China National Social Science Fund (No. 17AZD013)