China’s embodied energy trade: based on hypothetical extraction method and structural decomposition analysis

ABSTRACT

In this paper, we employ multi-region input–output model to investigate China’s embodied energy trade in 1995–2009, and then we use hypothetical extraction method to explore the effect of Chinese foreign trade on the other countries or regions of the world after extracting the trade volume between China and the world. We find that China was a net export country of embodied energy, and there was pronounced discrepancy between the sectors in importing and exporting embodied energy, where the sector Electrical and Optical Equipment had the largest import and export in embodied energy. In 2009, China imported mainly from Korea and exported mainly to Japan.

In addition, extracting trade from China and other countries not only influenced the embodied energy consumption of China but also consumption and trade of other countries. China’s government should pay more attention to sector differences when adopting policies like trade tax rate, and enhance cooperation with other countries.

KEYWORDS:

• Embodied energy trade
• multi-region input-output model (MRIO)
• hypothetical extraction method
• structural decomposition analysis
• China

Notes

¹ The embodied energy does not include the energy required to produce the exports.

² The order of the three variables in Equations (12) and (13) cannot be arbitrarily changed, because the multiplication of the matrix does not meet the exchange law. Here, for the convenience of description, a form adjustment is made.

³ For more details about the data, please refer tohttp://www.wiod.org/new_site/database/wiots.htm.

⁴ The unit for the embodied energy is 10³ TJ if not described especially.

⁵ Private Households with Employed Persons was 0.04 TJ.

⁶ Because ROW including many countries and regions is not a single country or region, it is not taken into account when ranking.

⁷ 1400 = 35 × 40, where 35 stands for the number of sectors, and 40 stands for the number of countries/regions.

⁸ The adjustment of trade is also related to the social and economic factors of many non-tax policies. It is suggested that China adjust the embodied energy trade by changing the tax policy when other factors remain unchanged.

Additional information

Funding

This work was supported by the Natural Science Foundation of China under Grant [number 71601075 and 71704070]; Ministry of Education for the Humanities and Social Sciences Research Young Fund on the West and Borderland Project [number 17XJC790002], Gansu Provincial Higher Education Research Project [number 2017B-41]; Hunan Provincial Natural Science Foundation of China under Grant [number 2016JJ3047]; Program of Lanzhou University of Finance and Economics under Grant [number Lzufe2018B-06; and the Research Project of Institute of Silk Road Economics, Lanzhou University of Finance and Economics under Grant[number JYYZ201603].