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Environmental Modelling & Software 22 (2007) 378e393
                                                                                                                              www.elsevier.com/locate/envsoft




   A model for China’s energy requirements and CO2 emissions analysis*
                           Ying Fan a, Qiao-Mei Liang a,b, Yi-Ming Wei a,*, Norio Okada c
                                 a
                                     Institute of Policy and Management, Chinese Academy of Sciences, Beijing 100080, China
                                              b
                                                Graduate School, Chinese Academy of Sciences, Beijing 100080, China
                                                             c
                                                               Kyoto University, Kyoto 611-0011, Japan
                           Received 17 December 2004; received in revised form 28 November 2005; accepted 9 December 2005
                                                           Available online 20 March 2006




Abstract

    This paper introduces a model and corresponding software for modeling China’s Energy Requirements and the CO2 Emissions Analysis Sys-
tem (CErCmA). Based on the inputeoutput approach, CErCmA was designed for scenario analysis of energy requirements and CO2 emissions to
support policymakers, planners and others strategically plan for energy demands and environmental protection in China. In the system, major
drivers of energy consumption are identified as technology, population, economy and urbanization; scenarios are based on the major driving
forces that represent various growth paths. The inputeoutput approach is employed to compute energy requirements and CO2 emissions under
each scenario. The development of CErCmA is described in a case study: China’s energy requirements and CO2 emissions in 2010 and 2020 are
computed based on the inputeoutput table of 1997. The results show that China’s energy needs and related CO2 emissions will grow exponen-
tially even with many energy efficiency improvements, and that it will be hard for China to maintain its advantage of low per capita emissions in
the next 20 years. China’s manufacturing and transportation sectors should be the two major sectors to implement energy efficiency improve-
ments. Options for improving this model are also presented in this paper.
Ó 2006 Elsevier Ltd. All rights reserved.

Keywords: Energy requirement; CO2 emissions; Scenario analysis; Inputeoutput model




1. Introduction                                                                  environment for humans and all other living beings, threaten-
                                                                                 ing the existence of humankind.
   Global warming, caused by increasing emissions of CO2                            In order to control the continuous global warming and pro-
and other greenhouse gases as a result of human activities, is                   tect the living environment, the Kyoto Protocol to the United
one of the major threats now confronting the environment.                        Nations Framework Convention on Climate Changes, signed
CO2 accounts for the largest share of total greenhouse gases,                    in Kyoto, Japan in 1997, sets detailed emissions mitigation
and its impact on the environment is also the greatest. If an-                   commitments for the 38 major industrialized countries.
thropogenic CO2 emissions are allowed to increase without                           Although the protocol did not set an explicit CO2 reduction
limits, the greenhouse effect will further destroy the                           obligation for China and other developing countries, these
                                                                                 nations still face great pressure from the environment. In
                                                                                 2003, CO2 emissions caused by fuel combustion in China
 *
   National Natural Science Foundation of China under grant Nos.70425001,        were about 0.849 billion tons of carbon (tC), accounting for
70573104 and 70371064, and the Key Projects of National Science and Tech-        13.1% of the world’s total, second only to the United States,
nology of China (2001-BA608B-15, 2001-BA605-01).                                 the largest CO2 emitter worldwide (IEA, 2003).
 * Corresponding author. Institute of Policy and Management (IPM), Chinese
                                                                                    In addition to the current high CO2 emissions is the proba-
Academy of Sciences (CAS), P.O. Box 8712, Beijing 100080, China. Tel.:
þ86 10 62650861; fax: þ86 10 62542619.                                           bility that China’s economy will continue to grow rapidly over
   E-mail addresses: ymwei@mail.casipm.ac.cn, ymwei@263.net (Y.-M.               the next 50 to 100 years (Development Research Center of the
Wei).                                                                            State Council of China, 2003). Since almost all of economic

1364-8152/$ - see front matter Ó 2006 Elsevier Ltd. All rights reserved.
doi:10.1016/j.envsoft.2005.12.007
Y. Fan et al. / Environmental Modelling & Software 22 (2007) 378e393                             379

activities consume energy, energy needs, along with CO2                 certain key factors affecting CO2 emissions and evaluate their
emissions, will inevitably increase, which will likely create           impacts (e.g., Lee and Lin, 2001; Paul and Bhattacharya,
tensions between the country’s need for economic growth,                2004; Yabe, 2004). Some focus on one factor, such as socio-
energy and environmental protections. These divergent pres-             economic structural change (Kainuma et al., 2000), or con-
sures could hinder China’s goal of sustainable development.             sumption patterns (Kim, 2002).
To address this problem effectively, analysis tools are required           Other researchers primarily analyze the impact of certain
so as to support energy and environmental policy decision               economic activities or governmental policies on energy con-
making. For this purpose, this study investigated and devel-            sumption and related CO2 emissions, such as the impact of in-
oped China’s Energy Requirements & CO2 Emissions Analy-                                                             ´          ´
                                                                        ternational trade (Machado et al., 2001; Sanchez-Choliz and
sis System (CErCmA) to assess how changing certain social               Duarte, 2004; Kondo et al., 1998; Cruz, 2002), and the effects
and economic policies could impact China’s future energy                of certain policy reforms or frameworks (Bach et al., 2002;
needs and CO2 emissions.                                                Christodoulakis et al., 2000).
   Many studies have examined CO2 emissions analysis tools                 Our study extends the sensitivity analysis and applies it to
including Silberglitt et al. (2003), Savabi and Stockle (2001),         China’s energy and environmental protection issues. Firstly,
                ´
Roca and Alcantara (2001), Gielen and Moriguchi (2002),                 major energy consumption impact factors are identified: eco-
Clinch et al. (2001), Hsu and Chen (2004), Winiwarter and               nomic growth, technological changes, population growth,
Schimak (2005), Galeotti and Lanza (2005), Pan (2005),                  changing consumption and production patterns, and urbaniza-
Scrimgeour et al. (2005), Ball et al. (2005) and Sun (1999).            tion. Secondly, we construct a set of future scenarios describ-
Similar investigations into CO2 emissions analysis tools                ing different growth paths based on these factors; then we
geared for China include presenting forecasts of energy con-            apply the IeO model to compute energy requirements along
sumption and related emissions (Lu and Ma, 2004; Chen,                  with CO2 emissions under each scenario.
2005; Crompton and Wu, 2005; Gielen and Chen, 2001), ana-                  This paper is organized as follows:
lyzing strategies for developing a sustainable energy system
(Qu, 1992; Wu and Li, 1995; Ni and Thomas, 2004; Xu                         In Section 1 the CErCmA modeling framework is
et al., 2002), assessing impacts of driving forces on historical            described, along with its underlying rationale, design prin-
emissions (Wu et al., 2005 and Zhang, 2000), exploring vari-                ciples, model components and a case study.
ous types of energy technology (Wu et al., 1994; Yan and                    Section 2 presents the rationale for using the IeO model to
Kong, 1997; Feng et al., 2004; Mu et al., 2004; Eric et al.,                analyze China’s energy requirements and CO2 emissions
2003; Solveig and Wei, 2005), and energy efficiency standards                along with the system components. Section 3 introduces
(Lang, 2004 and Yao et al., 2005).                                          software we developed based on the system explained in
   This study aims to extend current studies to obtain not just             Section 2. Section 4 presents an application to assess
one scenario but several possible energy requirements and                   China’s energy requirements along with projected CO2
emissions scenarios under different growth paths of various                 emissions in 2010 and 2020; this is followed by conclusions
driving factors (not just focusing on technology factors but                and corresponding policy recommendations. Finally,
also focusing on changes in social and economic factors).                   strengths, research challenges and further work needed to
   The model and software for China’s Energy Requirements                   improve the system are presented in Section 5.
and CO2 Emissions Analysis System (CErCmA) were devel-
oped by combining the inputeoutput model (IeO model)
with the scenario analysis concept.
   China’s energy system is huge and complex with many un-              2. CErCmA: approach and components
certainties due to the driving forces of energy requirements.
The traditional trend extrapolation approach works only                 2.1. Basic approach: inputeoutput model
when the changes in driving forces follow established paths,
but can shed little light on the case of driving forces moving             The CErCmA system was established based on the inpute
in a brand-new orbit, e.g., certain risks or challenges baffle           output (IeO) model, an analytical framework developed by
economic development.                                                   Professor Wassily Leontief in the late 1930s. The main
   The current popular scenario analysis operates in a different        purpose of the inputeoutput model is to establish a tessellated
way in that ‘‘it does not try to predict the future but rather to       inputeoutput table and a system of linear equations.
envision what kind of futures is possible’’ (Silberglitt et al.,           An inputeoutput table shows monetary interactions or
2003). Through the description of various possible future               exchanges between the economic sectors and therefore their
scenarios representing different growth paths, driving force            interdependence. The rows of an IO table describe the distri-
uncertainties can be taken into account. Under each scenario,           bution of a sector’s output throughout the economy, while
the inputeoutput model is employed to assess China’s energy             the columns describe the inputs required by a particular sector
requirements along with its CO2 emissions.                              to produce its output (Miller and Blair, 1985).
   In recent years much attention has been given to these                  The system of linear equations also describes the distribu-
issues. Some of these studies perform sensitivity analyses on           tion of a sector’s output throughout the economy mathemati-
one or more social and economic factors. Others identify                cally, i.e., sales to processing sectors as inter-inputs or to
380                                  Y. Fan et al. / Environmental Modelling & Software 22 (2007) 378e393

consumers as final demand. The matrix notation of this system             of fossil energy over primary energy, then the primary energy
is:                                                                      requirements QT can be calculated as:

X ¼ AX þ Y                                                      ð1Þ             P
                                                                                3
                                                                                      QF
                                                                                       i
                                                                                i¼1
where (suppose there are n sectors in the economy) X: total              QT ¼                                                                       ð7Þ
                                                                                   b
output vector with n dimensions whose element Xj is the out-
put of sector j; Y: final demand vector with n dimensions (final
demand consists of household and government consumption,                 2.2.2. Energy intensity model
public and private investment, inventory and net-export); A:                Energy intensity is the energy consumption per unit of GDP
direct requirement matrix with n  n dimensions, its element             output, which can be calculated using the following equation:
aij denotes the direct requirement of sector j on sector i for
per unit output of sector j. A is also called a technology matrix.               QT   QT
                                                                         DQ ¼       ¼ n                                                             ð8Þ
aij is obtained through:                                                        GDP P
                                                                                        Zj
        xij                                                                                j¼1
aij ¼       ði; j ¼ 1; 2; .; nÞ                                 ð2Þ
        Xj
                                                                         where DQ: energy intensity; Zj: value added of sector j.
where xij is the monetary value from sector i to sector j.
  Thus Eq. (1) can be rewritten as:                                      2.3. CO2 emissions model

X ¼ ðI ÿ AÞÿ1 Y                                                 ð3Þ      2.3.1. Total CO2 emissions
                                                                            According to the approach recommended by the IPCC
where I denotes the n  n dimension identity matrix, and                 (PRC Ministry of Science and Technology Economy &
ðI ÿ AÞÿ1 is called the ‘Leontief inverse matrix’ whose ele-             Energy e NGO, 2001), the determinant of CO2 emissions dif-
ments bij ði; j ¼ 1; 2; .; nÞ represent the total amount of com-         fers from that of other greenhouse gases. Since CO2 emissions
modity i required both directly and indirectly to produce one            rely on the fuel carbon content, the IPCC does not calculate
unit of final demand of commodity j.                                      CO2 emissions as it does other greenhouse gases.
   In this study, the basic IeO model is extended to compute                The calculation steps are as follows:
energy requirements along with CO2 emissions. Only primary                  (1) Introduce a conversion coefficient d to change the unit
energy is taken into account to avoid double counting.                   of energy consumption from ‘‘oil equivalent’’ to ‘‘106 kJ’’:

2.2. Energy requirements and CO2 emissions model                         d ¼ 41:868 Â 106 kJ=toe

2.2.1. Energy requirements model                                            (2) Obtain carbon content multiplied by potential carbon
   Firstly, the requirements of fossil fuels, i.e., coal, crude oil      emissions factor matrix.
and natural gas, are calculated by the following equation:                  (3) Correct non-oxidized carbon with the fraction of
                                                                         oxidized carbon.
QF ¼ QP þ QR                                                    ð4Þ         Table 1 shows the potential carbon emissions factors of the
                                                                         main fossil fuels and the fraction of oxidized carbon.
where QF: total fossil energy requirements, 3 Â 1 matrix, its               (4) Conversion from oxidized carbon to CO2 emissions.
element QF represents the requirement of each fossil fuel,
            j                                                               Similar to energy requirements, the calculation of CO2
i.e., coal, crude oil and natural gas; QP: production energy             emissions is also divided into industrial production CO2 emis-
requirements, 3 Â 1 matrix, its element QP represents the pro-
                                         j                               sions and household CO2 emissions.
duction energy requirements of each fossil fuel; QR: household
energy requirements, 3 Â 1 matrix, its element QR represents
                                                  j
                                                                         M ¼ MP þ MR                                                                ð9Þ
the household energy requirements of each fossil fuel.
    QP and QR are calculated, respectively, as follows (Cruz,
2002):                                                                   Table 1
                                                                         Potential carbon emission factors of leading fossil fuels and their fraction of
QP ¼ CðI ÿ AÞÿ1 Y                                               ð5Þ      oxidized carbon
                                                                         Fuel                    Potential carbon emissions           Fraction of
where C: 3 Â n matrix, its element cij represents the (physical)                                 factora (kg carbon/106 kJ)           oxidized carbonb
quantity of fuel i used per unit of total output in sector j.            Coal                    24.78                                0.98
                                                                         Crude oil               21.47                                0.99
QR ¼ WP                                                         ð6Þ      Natural gas             15.30                                0.995
                                                                          a
                                                                            Workgroup 3 of the National Coordination Committee on Climate Change
where W: 3 Â 1 vector, representing per capita household                 (Xue, 1998).
energy consumption, each element of which corresponds to                  b
                                                                            IPCC (PRC Ministry of Science and Technology Economy & Energy e
one type of fossil fuel; P: population; suppose b is the ratio           NGO, 2001).
Y. Fan et al. / Environmental Modelling & Software 22 (2007) 378e393                               381

where M: total CO2 emissions; MP: production CO2 emissions;              2.4.1. Final demand Y f for terminal year f
M R: household CO2 emissions; M P and M R can be calculated                 The procedure to calculate future final demand Yf consists
by the following equations, respectively (unit: billion tC).             of three steps:

         X
         3                                                               2.4.1.1. Calculate future per capita expenditure for each sec-
MP ¼ d         e j hj Q P
                        j                                      ð10Þ      tor. Income elasticity measures the percent change of expen-
         j¼1
                                                                         diture induced by a percent change of income. That is:
         X
         3
MR ¼ d         e j hj Q R                                      ð11Þ        Kf ÿ Kc
                        j
                                                                               c
         j¼1
                                                                         3¼ fK c                                                       ð15Þ
                                                                           L ÿL
where ej: the carbon emissions factor of fossil fuel j (unit:                 Lc
kg C/106 kJ); hj: the fraction of oxidized carbon of fuel j.
                                                                         where 3: income elasticity; K f: per capita expenditure for ter-
2.3.2. Other parameters of CO2 emissions                                 minal year f; Kc: per capita expenditure for base year c; Lf: per
                                                                         capita income for terminal year f; Lc: per capita income for
2.3.2.1. Per capita CO2 emissions.                                       base year c.
                                                                             Transforming Eq. (15) for the future per capita expenditure
     M                                                                   is obtained as follows:
n¼                                                             ð12Þ
     P                                                                               ÿ f      Á
                                                                           f           L ÿ Lc
where v: per capita CO2 emissions.                                       K ¼ 1þ3                  Kc                                 ð16Þ
                                                                                          Lc
                                                                                       f       f                           f
2.3.2.2. CO2/TPEC. CO2/TPEC describes CO2 emissions                         Similarly Ku and Kr can be obtained, where Ku : urban per
                                                                                                                   f
from per unit of total primary energy consumption (TPEC).                capita expenditures for terminal year f; Kr : rural per capita
                                                                         expenditures for terminal year f.
           P
           3
         dej hj QF                                                       2.4.1.2. Calculate future aggregate household consump-
   M j¼1
                 j   X3
                                QF
                                 j
G¼    ¼            ¼     dej hj                                ð13Þ      tion. The aggregate household consumption can be considered
   QT     QT         j¼1
                                QT
                                                                         as the product of per capita expenditures and total population.
                                                                         Urban and rural aggregate household consumption should be
where G: CO2/TPEC.                                                       calculated separately, since there is a huge gap between city
   Eq. (13) shows that the change of CO2/TPEC can reflect the             and countryside consumption patterns and standard of living.
change in energy structure.
                                                                         T f ¼ Tu þ Trf ¼ Ku P f h þ Kr Pf ð1 ÿ hÞ
                                                                                f          f          f
                                                                                                                                       ð17Þ
2.3.2.3. CO2 emissions intensity.
                                                                         where T f: aggregate household consumption for terminal year
      M   M QT                                                               f      f
                                                                         f; Tu and Tr : urban and rural aggregate household consumption
DM ¼    ¼       ¼ GDQ                                          ð14Þ
     GDP QT GDP                                                          for terminal year f; h: urbanization rate, i.e., the share of urban
                                                                         population in the total population of the country, for terminal
where DM: CO2 emissions intensity.                                       year f.
   Eq. (14) implies that the trend of the change in CO2 emis-
sions intensity is determined by that of energy intensity                2.4.1.3. Estimating future final demand. Here the future final
because energy-related CO2 emissions result from fuel com-               demand Y f: is estimated from the results of future aggregate
bustion, and the variation speed of CO2 emissions intensity              household consumption.
is determined by the index of CO2/TPEC (Sun, 2003).
                                                                                Tf
2.4. Combining influences of in driving forces                            Yf ¼                                                          ð18Þ
                                                                                qf

   Eqs. (4)e(8) show that future energy demand, the technol-             where q f denotes the ratio of aggregate household consump-
ogy matrix and the energy efficiency improvement matrix                   tion over final demand.
must first be calculated in order to obtain future energy
requirements. The process to obtain these variables also pres-           2.4.2. Direct requirement matrix A f for terminal year f
ents how the changes of driving forces are combined into the                Here, the RAS approach (Miller and Blair, 1985) is
model.                                                                   employed to obtain the future direct requirement matrix.
   In this paper superscript f indicates that the variable is               The RAS method is a common tool used to update the
related to terminal year f ; superscript c indicates that the            inputeoutput matrix A f. It attempts to estimate the n  n tech-
variable is related to base year c.                                      nology coefficients from three types of information for the
382                                    Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393

year of interest. Regarding this study, the information needed
                                                                                                                 Scenario construction subsystem
is as follows:
                                                                                   Base year
                                                                                   database
(1) future total output for sector i, Xif ;
(2) future totalPintermediate deliveries for sector i, Uif , which                                                                      f                                    f
                                                                                                                                  Zi                                    Yi
    is equal to n xij , and equals sector’s total output Xif mi-
                   j¼1
    nus sector final demand Yif ;
(3) future total sector intermediate purchases for sector i, Vif ,
                         Pn                       f                                                                                          f
    which is equal to                                                                                                                                    f              f
                            i¼1 xij , and equals Xi minus sector                       Ac                                               Xi       U   i        Vi
                    f
    value added Zi .

    The basic aim of RAS is that according to the substitution
and manufacturing assumption about technology change, Xif ,
Uif , Vif are used to obtain row multipliers (R) and column mul-
                                              ^                                                  a ijf                 c
                                                                                                                     a ij
           ^ which are used to modify each row and each col-
tipliers (S),
umn of the base year direct requirement matrix Ac,
respectively. These two multipliers can be obtained by using                                                 n
                                                                                                                          f         f
an iterative algorithm, illustrated in Fig. 1. Next, the future                             Ui                     a ij X          j
                                                                                                             j 1
direct requirement matrix Af can be calculated as follows:
                                                                                                                                                                                   f
                                                                                                                                                                             Ui
A ¼ RAc ^
 f  ^ S:                                                         ð19Þ                                                                                        ri
                                                                                                                                            N                                Ui
                                                                                                                      f
                                                                                                 Ui              Ui ?
                                                                                                                                                                    f                   f
2.4.3. Cf and W f                                                                                                                                            a ij                ri a ij
                                                                                                     Y
   The future energy use, per unit of output, matrix C f, and per
capita household energy consumption matrix W f need to be ob-                                                n
                                                                                                                      f            f
tained to explicitly embody the impacts of changes in technol-                              Vi                     a ij X         j
ogy and energy/environment policy on energy requirement                                                  i 1

and related CO2 emissions. The improvements from Cc and                                                                                                                      Vj
                                                                                                                                                                                    f
W c to C f and W f can be obtained by referring to current energy                                                                           N                sj
layouts.                                                                                                                                                                         Vj
                                                                                                                      f
                                                                                                 Vj              V   j        ?
                                                                                                                                                                  f                 f
3. Software                                                                                                                                                  a ij                a ij s j
                                                                                                         Y

   Software to forecast future energy requirements and energy                                            END
intensity as well as CO2 emissions using the model above has
been developed using Visual Basic 6.0, called CErCmA 1.0.                                        Fig. 1. Iterative algorithm of RAS.

3.1. Characterization of main components                                   emissions/TPEC), per capita energy requirements and CO2
                                                                           emissions.
      As illustrated in Fig. 2, CErCmA is composed of four parts:
                                                                           3.2. Database and database management subsystem
      Database and database management subsystem: to input,
       store and manage base year data, factor scenarios and               3.2.1. Database
       modeling results.                                                      The database in this system consists of the base year data-
      User interface: to provide graphic interface so as to conve-        base, the factor scenario database and the result database.
       niently input parameters and search results.                           The base year database contains base year inputeoutput
      Scenario construction subsystem: to combine factor sce-             tables, socio-economic data and technology data.
       narios into the model and generate integrated scenarios.               The factor scenario database includes an economic scenario
      Model base subsystem: to simulate the situation in termi-           base, a population scenario base, an urbanization scenario base
       nal years for each constructed scenario.                            and a technology scenario base. Data in each scenario base
                                                                           come from the latest statistics released by the government
   As its result, the system generates the following: energy               and other authorities listed in the references.
requirements for each sector and for each fuel type, energy in-
tensity for each sector, CO2 emissions for each sector and each               The economy scenario base contains data on the GDP
fuel type, CO2 intensity for each sector, CO2 emissions from                   growth rate, per capita income growth rate, variations of
per unit of the total primary energy consumption (CO2                          income elasticity and industrial structure.
Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393                                                     383




                                                        management subsystem
                                                         Database  database
                                                                                        Factor scenario              Base year database          Results
                                                                                          database                                              database




                                                                    Future per capita income                  per capita income
                                                                    Future income elasticity                  population
                                                                    Future population                         urbanization
                                                                    Future urbanization                       aggregate household
                                                                                                              consumption


                                                                                                                                 Direct requirement matrix
                                                                                                                                 Energy use per unit output
                                                                                                 GDP growth                      matrix
                                                                                                 Industrial structure            Per capita household energy
                                                                                                 Energy layouts                  consumption matrix
                                                        construction
                                                         subsystem

                                                          Scenario




                                                                                        Final demand         Future final          Technology change
                                                                                          estimation          demand                   estimation
                                User interface




                                                                                                                            Future direct requirement matrix
                                                                                                                            Future energy use per unit output
                                                                                                                            matrix
                       User




                                                                                                                            Future per capita household
                                                                                                                            energy consumption matrix
                                                            Model base subsystem




                                                                                                                                                Energy
                                                                                             Energy requirement model                         intensities

                                                                                                      Energy
                                                                                                    reuirements


                                                                                               CO2 emissions model



                                                                       Total CO2           Per capita CO2      CO2 /          CO2 emission
                                                                       emissions             emissions         TPEC            intensities



                                                                                             Calculation            Data and data                Main
                              NOTES:                      Database                          components                                           output
                                                                                                                         flow

                                                                                   Fig. 2. Software structure of CErCmA 1.0.


 The population scenario base contains data on yearly total                                                3.2.2. Database management subsystem
  population.                                                                                                  The database management subsystem provides convenient
 The urbanization scenario base contains data of the yearly                                                editing functions that allow users to add, modify and display
  urbanization rate.                                                                                        data to both the factor scenario base and results base.
 The technology scenario base contains data on rates of                                                       Users can add custom factor scenarios to the factor
  change in the energy consumption per unit output, rate                                                    scenario base when running the system. But without adminis-
  of change in per capita household energy consumption,                                                     trators’ authority to confirm these operations, the custom
  etc.                                                                                                      scenarios are automatically deleted when the program shuts
 The results database contains the scenario analysis results                                               down so as to maintain the validity and consistency of the
  including energy requirements and related CO2 emissions                                                   system.
  plus additional details.                                                                                     Users can create tables and print results for the results base.
384                                 Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393

3.3. Software description                                               Table 2
                                                                        Scenario description
   The main interface consists of two parts. The right side of          Scenarios                Scenario description
the main interface is the welcome interface, along with login           Scenario A1             Various challenges and risks constrain economic
information for users. If a user logs in as an administrator,             (low economy)         development and urbanization advancement, and
the interface will display the corresponding username and                                       cause technology to advance at a lower speed
                                                                                                than in scenario B.
rights of the user. Beneath the welcome interface is a fast-            Scenario A2             The economy and urbanization scenarios are the
entrance for administrators.                                              (low economy          same as those in scenario A1, while supposing
   The left side of the main interface displays the scenario sets         þ technology)         that the government initiative efforts to maintain
of each driving factor. Users can set scenarios for each factor                                 a technological improvement to achieve its
and click the ‘‘scenario generation’’ icon on the toolbar to ac-                                preset objects of a sound national energy plan.
                                                                        Scenario B              Assume in the coming 20 years China’s economy
tivate them; next, a synthesis scenario appears and is demon-             (business as usual)   could maintain its current growth rate and realizes
strated on the right side. When the user constructs all the                                     a relatively high growth rate; per capita income
scenarios of concern, users can click the ‘‘scenario analysis’’                                 achieves the preset ‘well-off’, ‘developed’ society
icon and the analysis results will be generated and automati-                                   objectives; population and urbanization rate grow
cally transferred and inserted into tables and graphics for                                     at a medium speed; technology improvement
                                                                                                meet the preset objectives of the PRC’s national
immediate presentation.                                                                         energy plan.
                                                                        Scenario C1             On the base of scenario B, assume population
4. An application: China’s energy requirements and                        (B þ high population) growth at a much higher speed resulting in a
                                                                                                new population peak.
related CO2 emissions for 2010 and 2020                                 Scenario C2             On the basis of scenario B, assume technology
                                                                          (B þ technology)      advances at a higher rate than in scenario B.
   In this application the analysis years are set at 2010 and
2020.
   In this scenario 2010 is the terminal year of the 11th               4.2.1. Economy scenarios
Five-year plan; 2020 is when the Chinese aims to realize its               The Development Research Center of the State Council
goal of building an economically secure society. The govern-            (2003), led by researcher S. Li, identifies two types of
ment (Development Research Center of the State Council,                 economic development as shown in Table 3. This study also
2003) set the following objectives: ‘‘On the basis of optimized         predicts the future industry structure, including the percent-
structure and better economic returns, efforts will be made to          ages for primary, secondary and tertiary industries, which
quadruple the GDP of 2000 by 2020’’ and ‘‘achieve industri-             are, respectively, 10.6:54.2:35.2 for year 2010, and
alization by 2020.’’ During this period, major changes are ex-          7.0:52.6:40.4 for year 2020.
pected in the economy, population, urbanization and
technology, which will further increase both production and             4.2.2. Population scenarios
household energy demand. The main question here is: How                    Our study utilizes the forecasts of the Quantitative
will changes in major social and economic factors impact                Economics Institute of the Chinese Academy of Social
China’s future energy requirements and CO2 emissions? Could             Sciences (CASS) and UNEP (Zhou, 2000) (Table 4).
China maintain its advantage of low per capita CO2 emis-
sions? Therefore, it is of great significance to assess the energy       4.2.3. Urbanization scenarios
requirement and related CO2 emissions in these two years.                  Our study refers to the findings of the Institute of
                                                                        Geographic Sciences and Natural Resources Research of the
4.1. Model assumption                                                   Chinese Academy of Sciences (Liu et al., 2003). This study
                                                                        examines three scenarios:
   Since the latest inputeoutput tables available for China are
from 1997, in this application the base year is set to 1997.             - High scenario: China’s market-oriented reforms will be
   Six production sectors and a residential sector are consid-             a complete success and significantly hasten the urbaniza-
ered in this application: agriculture, manufacturing, construc-            tion process. The urbanization rate will be 44.7% in
tion, transportation, commerce and service, as well as                     2010 and 54.7% in 2020.
                                                                         - Medium scenario: China’s market-oriented reforms will be
residential energy use. Primary energy is divided into four
groups: coal, oil, natural gas, and hydro and nuclear power.               a partial success and the urbanization trend will follow the
                                                                           common S-curve trajectory, experienced in the past by

4.2. Scenario
                                                                        Table 3
                                                                        Forecast of economic growth (%)
   The following five scenarios are established around various
                                                                        Scenarios                   Year 2001e2010                Year 2011e2020
social and economic factors affecting energy requirements; the
scenarios represent five distinct growth paths that China might          Economy-base                7.9                           6.6
                                                                        Economy-low                 6.6                           4.7
follow in the future (Table 2).
Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393                                             385

Table 4                                                                            Table 6
Forecast of China’s population (in billions)                                       Forecast of ratio of renewable energy over primary energy (%)
Scenarios (organizations)                        2010                    2020      Ratios                                    2010                             2020
High (CASS)                                      1.48                    1.52      Hydro power                               9.3                              10.3
Low (UNEP)                                       1.39                    1.45      Nuclear power                             2.3                               3.64


                                                                                   4.5.1. Total and per capita energy requirements and
   most countries. In this scenario the urbanization rate will
                                                                                   related CO2 emissions
   be 43.03% in 2010 and 50.14% in 2020.
                                                                                      Fig. 4 presents the results of energy requirements along
 - Low scenario: China’s market-oriented reforms will not
                                                                                   with CO2 emissions in the model scenarios. In 2010, the total
   significantly advance economic progress and the urbaniza-
                                                                                   energy requirement will be 1.57e1.84 billion tons of oil
   tion process will still be constrained by the system as in
                                                                                   equivalent (toe), and the corresponding CO2 emissions will
   the past 20 years. The urbanization rate will be 42.24%
                                                                                   be 1.33e1.57 billon tC; in 2020, the total energy requirement
   in 2010 and 48.25% in 2020.
                                                                                   will be 1.88e2.64 billion toe, and corresponding CO2 emis-
                                                                                   sions will be 1.54e2.17 billion tC.
                                                                                      An analysis of the forecast results for these scenarios shows
4.2.4. Technology scenarios                                                        the followings.

4.2.4.1. Technology improvement matrix. Table 5 presents the                       4.5.1.1. Energy efficiency plays an important role in the control
three sets of technology improvement scenarios.                                    of energy consumption and related CO2 emissions. Scenario
                                                                                   A1 is one of the two scenarios with the highest level of energy
4.2.4.2. Ratio of renewable energy over primary energy. This                       needs and CO2 emissions. According to the scenario construc-
study utilizes the forecasts of the Academy of Macroeconomic                       tion, economic growth and urbanization advancement in this
Research Workgroup of the State Development Planning                               scenario are the lowest of all, which means the main driver
Commission (1999a) (Table 6).                                                      of energy consumption for final demand is the lowest. But
                                                                                   the improvement speed of energy efficiency in this scenario
                                                                                   is also the lowest; and thus the terminal energy requirement
4.3. Data                                                                          and related CO2 emissions in this scenario are higher than
                                                                                   those in other scenarios.
   Table 7 describes the data sources for the study.                                  On the other hand, economic growth and urbanization ad-
                                                                                   vancement in scenario C2 occur at the same speed as in sce-
4.4. Model checking                                                                narios B and C1, and at a higher speed than in scenarios A1
                                                                                   and A2. Since improvement speed of energy efficiency is the
   With the data from 1997, we checked our model for the                           highest in this scenario, the terminal energy requirement and
period 1998e2003, as shown in Fig. 3. Generally, the simula-                       related CO2 emissions in this scenario are lower than in other
tion results are close to the actual statistical data, with the                    scenarios except scenario A2.
largest relative error 11.19%, the smallest relative error                            Through this analysis it is clear that energy efficiency
0.90%, and the average relative error 2.21%.                                       improvement plays an important role in the control of energy

                                                                                   Table 7
4.5. Simulation results and policy implication                                     Data sources
                                                                                   Variable          Source
   In this section, the results of energy requirements and re-                     (matrix)
lated CO2 emissions in each scenario for 2010 and 2020 are                         Ac, Yc, Tu ,  c
                                                                                                     Inputeoutput table of China (Department of National Accounts,
discussed.                                                                              Tr , qf a
                                                                                          c
                                                                                                     National Bureau of Statistics, P.R. China, 1997)
                                                                                   3fu , 3fr         A modification of Hubacek and Sun (2001),
                                                                                                     see Appendix B
Table 5                                                                            Lc , Lc , Pc , hc China Statistical Yearbook (National Bureau of Statistics, P.R.
                                                                                    u    r
Technology scenarios                                                                                 China, 1998)
                                                                                   Cc, Wc            Combining the data in energy balance tables
Scenario      Description
                                                                                                     1997 with the corresponding data in
Low           Energy efficiency achieves a 5% less improvement than                                   inputeoutput table of China (Department of National Accounts,
              the medium case.                                                                       National Bureau of Statistics, P.R. China, 1977; Department of
Medium        The improvement of energy efficiency achieves the goal                                  Industrial and Transportation Statistics, National Bureau of
              of the National Energy-Saving Layout (Academy of                                       Statistics, P.R. China, 2001)
              Macroeconomic Research, State Development Planning                     a
                                                                                       The ratio of the construction sector is zero in the yearbook of 1997. Here
              Commission, 1999b, see Appendix A for a brief introduction).
                                                                                   this ratio is set to be 15% which is allocated for urban and rural household
High          Energy efficiency achieves a 5% greater improvement than
                                                                                   consumption based on the ratio between urban and rural population (Hubacek
              the medium case.
                                                                                   and Sun, 2001).
386                                     Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393

                                               1200.00

                                               1100.00

                                               1000.00

                                                 900.00

                                                 800.00

                                                 700.00

                                                 600.00

                                                 500.00
                                                           1997       1998     1999        2000           2001        2002     2003
                                   simulation results     924.56     813.91   881.53     893.26       955.89        1106.54 1138.06
                                   statistic data         924.56     887.72   873.66     874.85       905.85        995.20 1126.66

                                                                              simulation results           statistic data


                                          Fig. 3. Energy demand (requirements) for 1998e2003 (million toe).


consumption and related CO2 emissions. Great efforts should                      C2. The result is that energy consumption along with CO2
be taken to improve energy efficiency in final demand sectors,                     emissions in this scenario for the two final years are both lower
to enhance energy conversion efficiency, and to gradually                         than in scenario C2. It is obvious that the low energy con-
create a lower energy consumed product system and a life                         sumption and low CO2 emissions in scenario A2 is obtained
system.                                                                          at the cost of a low economic growth rate.
                                                                                    The above results show that total energy requirements and
4.5.1.2. Population has a significant impact on energy require-                   CO2 emissions increase rapidly in all scenarios. As for per
ments along with CO2 emissions. Scenario C1 is the ‘‘high                        capita results, Fig. 5 compares per capita CO2 emissions in
population’’ scenario in which the energy requirements and re-                   each scenario with the world average in 2003. It appears that
lated CO2 emissions will be second place in 2010, and rise to                    in 2010, per capita CO2 emissions in scenario A1 are slightly
first place in 2020. So even with the development of technol-                     higher than the world average in 2003. Per capita CO2 emis-
ogy, energy requirements along with CO2 emissions will still                     sions in all the scenarios will rise until 2020 by more than
increase rapidly if planners and policymakers fail to control                    the world rate in 2003.
population at the same time.
                                                                                 4.5.2. Energy structure and CO2 emissions by energy type
4.5.1.3. Energy efficiency is highly related to economic                             The forecast of energy structure and CO2 emissions by
growth. Energy efficiency in scenario A2 improves slower                          energy type are shown in Figs. 6 and 7, respectively.
than that in scenario C2, but economic growth and urbaniza-                         Variations of energy structures in all scenarios are similar in
tion rates are also slower in this scenario than in scenario                     general. The proportion of coal decreases, but still occupies



                  3.00
                         Energy requirements (billion toe)                        CO2 emissions (billion tC)
                  2.50

                  2.00

                  1.50

                  1.00

                  0.50

                  0.00
                            1997              2010            2020                                 1997                 2010          2020
                    A1      0.94              1.84            2.50                                 0.87                 1.57          2.06
                    A2      0.94              1.57            1.88                                 0.87                 1.33          1.54
                    B       0.94              1.67            2.52                                 0.87                 1.42          2.08
                    C1      0.94              1.78            2.64                                 0.87                 1.51          2.17
                    C2      0.94              1.59            2.31                                 0.87                 1.35          1.90

                              Fig. 4. Results of energy requirements and related CO2 emissions in assigned scenarios.
Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393                                                387

                                1.5
                                            Per capita CO2 emissions (tC/capita)
                                1.4
                                1.3
                                1.2
                                1.1
                                 1
                                0.9
                                0.8
                                0.7
                                0.6
                                0.5
                                                        1997                              2010                              2020

                                                                    ScenarioA1          ScenarioA2             ScenarioB

                                                                    ScenarioC1          ScenarioC2             World Average 2003


                                       Fig. 5. China’s per capita CO2 emissions in 2010 and 2020 vs. world average level in 2003.

the principal usage; the proportions of oil and natural gas rises,                             In the two final years, both the lowest energy intensity and
but the share of natural gas use is still low.                                              CO2 intensity appear in scenario C2, and both the highest en-
   As shown in Table 1, the potential emissions factor of coal                              ergy intensity and CO2 intensity appear in scenario A1.
is much larger than that of oil and natural gas. Thus, generally,                              In general, energy intensity and CO2 intensity are declin-
the energy structure tends to impact more significant on CO2                                 ing. CO2 intensity is declining faster than energy intensity be-
emissions control. But since coal still dominates the energy                                cause CO2/TPEC, another factor determining CO2 intensity, is
structure, CO2 emissions by coal is the largest emissions factor                            also declining.
in the future two years (see Fig. 7). So it appears that the                                   But in all the scenarios the decline of CO2/TPEC is slow.
potential to control CO2 emissions by adjusting the energy                                  This implies that in two final years the coal-dominated energy
structure during this period is limited.                                                    structure is changing very little. CO2/TPEC determines the
                                                                                            variation speed of CO2 intensity. The slow declining speed
4.5.3. Energy intensity, CO2 intensity and CO2/TPEC                                         of CO2/TPEC to a great extent limits the decline of CO2 emis-
   In 2010, energy intensity will be 0.79e1.023 toe/104 Yuan,                               sions in this period.
CO2 intensity will be 0.671e0.87 tC/104 Yuan, and CO2/
TPEC will be about 0.85 tC/toe. In 2020, energy intensity                                   4.5.4. Relationship between CO2 emissions
will be 0.604e0.864 toe/104 Yuan, CO2 intensity will be                                     and driving factors
0.497e0.711 tC/104 Yuan, and CO2/TPEC will be about                                            According the definition of CO2 emissions, the following
0.823 tC/toe.                                                                               decomposition was performed to assess the impacts of major
   Table 8 shows the change rate of energy intensity and CO2                                driving forces on CO2 emissions:
intensity in 2010 vs. 1997, and 2020 vs. 2010.
                                                                                            CO2 emissions ¼ CO2 intensity  GDP
  2020 C2
                                                                                            ¼ CO2 =TPEC  energy intensity  GDP
  2020 C1

   2020 B                                                                                         2020 C2

  2020 A2                                                                                         2020 C1
                                                                                                     2020 B
  2020 A1
                                                                                                  2020 A2
  2010 C2
                                                                                                  2020 A1
  2010 C1
                                                                                                  2010 C2
   2010 B                                                                                         2010 C1

  2010 A2                                                                                            2010 B
                                                                                                  2010 A2
  2010 A1
                                                                                                  2010 A1
 Base year
                                                                                                 Base year
         0%            20%             40%           60%            80%          100%                     0%         20%            40%         60%           80%   100%
                         Coal         Oil     Natural Gas   Other                                                              Coal       Oil   Natural Gas


             Fig. 6. Energy structure in constructed scenarios (%).                                Fig. 7. CO2 emissions by energy type in constructed scenarios (%).
388                                              Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393

Table 8                                                                              driving forces of the ratio of fossil energy over primary energy
Change rate of energy intensity and CO2 intensity                                    and that of CO2/TFES are quite small.
Scenarios 2010 vs. 1997                            2020 vs. 2010                         In all the scenarios, the forward driving effect of per capita
            Energy intensity CO2 intensity Energy intensity CO2 intensity            GDP growth is much larger than the backward driving effects
A1          0.82                0.76               0.84               0.82           of other factors, which can explain why CO2 emissions are
A2          0.70                0.65               0.75               0.72           growing so fast.
B           0.67                0.62               0.79               0.77               Between 2010 and 2020, the backward driving effect of en-
C1          0.71                0.66               0.78               0.75           ergy intensity is smaller than between 1997 and 2010, which
C2          0.64                0.59               0.76               0.74
                                                                                     shows that further technology enhancements will become
                                                                                     more difficult. Therefore, on the one hand, certain policies
                                                                                     should be devised to promote changes in energy structure
¼ CO2 =TFEC                                                                          so as to effectively make use of the backward driving effect
     Â the ratio of fossil energy over primary energy                                of the ratio of fossil energy over primary energy and that of
                                                                                     CO2/TFES. On the other hand, changing energy structure
      energy intensity  per capita GDP  population
                                                                                     would be a long-term task, the effect of which is not quite
                                                                                     likely to be seen before 2020 (Zhou and Yukio, 1996), so
where, CO2/TFEC presents CO2 emissions from the total fos-                           the coal-dominated energy structure is not expected to change
sil energy consumption.                                                              too much in the near future, the decline of energy intensity is
    The variation of CO2 emissions and that of each driving                          limited; correspondingly the decline of CO2 intensity is also
force are calculated, respectively, as presented in Fig. 8.                          limited. Moreover, during this period China’s economy will
    The decomposition implies that, in the absence of extra                          still grow at a relatively high speed, so the potential for CO2
energy or environmental policies, among all the driving                              mitigation is limited.
factors, per capita GDP plays the most important role, energy
intensity comes in second, and population, third, while the                          4.5.5. Sector energy requirements and CO2 emissions
                                                                                        Figs. 9 and 10 show the results of sector and residential en-
                                                                                     ergy requirements and CO2 emissions, respectively.
                 C2
                                                                                        Variations in all the scenarios are similar. The energy need
                                                                                     in manufacturing sector is declining, which shows the impact
                 C1
                                                                                     of the accelerated development of service and transportation
                                                                                     caused by accelerated urbanization. But due to the govern-
     2010-2020
                   B                                                                 ment’s objective ‘‘to achieve industrialization by 2020,’’ the
                                                                                     scale of manufacturing will still expand. The energy require-
                 A2                                                                  ments and CO2 emissions of this sector will still take the larg-
                                                                                     est share, followed by the transportation sector.
                 A1                                                                     The share of energy for the agriculture sector first increases
                                                                                     and then declines: the share in 2010 is larger than in 1997,
                                                                                     while the share in 2020 is smaller than in 2010, but is still
                                                                                     larger than in 1997. This phenomenon can be explained by
                                                                                     the two driving forces of opposite directions on agriculture en-
                 C2
                                                                                     ergy consumption, i.e., the continuous decrease in agricultural
                                                                                     energy usage in the industrial structure has a backward impact,
                 C1                                                                  while the continuous increase in the agricultural mechaniza-
                                                                                     tion level has a positive impact.
     1997-2010                                                                          The shares of construction and commerce in total energy
                   B
                                                                                     consumption increase rapidly. The shares of transportation
                 A2                                                                  and the service industry in 2010 rise markedly from the
                                                                                     1997 level, while their shares in 2020 vary not much from
                 A1
                                                                                     those in 2010, they rise just a little.

 0           0.5           1               1.5            2          2.5      3      4.5.6. Sector energy intensity and CO2 intensity
                        population                                                      Tables 9 and 10 present the results of sector energy inten-
                        per capita GDP                                               sity and CO2 intensity, respectively.
                        energy intensity
                                                                                        In the two final years, the energy and CO2 intensities of the
                        ratio of fossil energy over primary energy
                        CO2/TFES
                                                                                     manufacturing and transportation sectors are evidently higher
                        CO2 emissions
                                                                                     than average.
                                                                                        For manufacturing, energy and CO2 intensities in scenario
       Fig. 8. Relationships between CO2 emissions and driving factors.              A1 are much higher than those in the other four scenarios.
Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393                                389



                     100%
                      90%
                      80%
                      70%
                      60%
                      50%
                      40%
                      30%
                      20%
                      10%
                       0%
                            Base   2010 A1 2020 A1 2010 A2 2020 A2 2010 B           2020 B 2010 C1 2020 C1 2010 C2 2020 C2
                            year
                                          Agriculture     Manufacturing       Construction   Transportation
                                          Commerce        Service             Residential


                                            Fig. 9. Sector energy requirement in each scenario (%).



For transportation, in 2010, energy intensity in all scenarios is             4.6. Policy implications
quite close to that of manufacturing.
   Manufacturing and transportation take the largest shares of                  Summarizing the above forecast results and analyses of the
energy and produce the largest amount of CO2 emissions, thus                  model, the following policy recommendations are proposed.
the energy and CO2 intensities of these two sectors will to
a great extent impact the speed of energy requirements and
CO2 emissions growth. These two sectors should be pivotal                     4.6.1. Policies promoting changes in energy structure
in improving energy efficiency.                                                should be devised to control the quickly increasing
   Among all scenarios, scenario A1 is the worst path in terms                CO2 emissions
of controlling the fast growth trends of energy requirements                     The above forecast results show that even in scenario C2,
and CO2 emissions.                                                            where technology advances the fastest, CO2 emissions
   Energy and CO2 intensities in agriculture, construction,                   increase rapidly. Moreover, the increase of per capita emis-
commerce and the non-material sectors remain lower than                       sions will quite possibly reach or exceed the worldwide aver-
the sector average. The intensities of the construction sector                age within 20 years. The results also show that with time
are the lowest in the two final years, but tend to rise rapidly.               goes on further enhancements in energy-saving technology
As shown above, the shares of construction and commerce                       will become more and more difficult. Therefore, it is desir-
in total energy consumption increase rapidly, there could be                  able to establish energy and environmental policies in favor
an induced reduction in CO2 emissions. Therefore great efforts                of cleaner energies as early as possible to accelerate the
should be taken to maintain the low energy and CO2 intensities                changes in energy structure and to support sustainable eco-
in these sectors.                                                             nomic development.



                     100%


                      80%


                      60%


                      40%


                      20%

                       0%
                            Base   2010 A1 2020 A1 2010 A2 2020 A2 2010 B           2020 B 2010 C1 2020 C1 2010 C2 2020 C2
                            year

                                          Agriculture        Construction         Commerce     Residential
                                          Manufacturing      Transportation       Service

                                              Fig. 10. Sector CO2 emissions in each scenario (%).
390                                           Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393

Table 9                                                                                than that of oil and natural gas in most cases (He et al.,
Energy intensity for each sector (toe/104 Yuan)                                        1995), the decline of energy intensity will likely be limited
Sector           2010                               2020                               over the next 15 years. At the same time, the high cardinal
                 A1     A2     BAU C1        C2     A1     A2     BAU C1        C2     number of coal, to a great extent, will likely limit the decrease
Agriculture      0.35   0.31   0.29   0.31   0.28   0.35   0.27   0.27   0.28   0.25   of CO2 emissions by total fossil fuel consumption, which can
Manufacturing    1.86   1.58   1.52   1.61   1.44   1.47   1.11   1.17   1.23   1.07   still cover the majority of total primary energy consumption.
Construction     0.18   0.15   0.14   0.15   0.13   0.23   0.16   0.17   0.17   0.15   Consequently CO2 intensity will likely not drop considerably
Transportation   1.95   1.55   1.49   1.58   1.41   1.88   1.26   1.29   1.35   1.17   fast in the next 20 years.
Commerce         0.30   0.26   0.25   0.27   0.24   0.26   0.21   0.21   0.22   0.20
Service          0.29   0.26   0.25   0.26   0.24   0.26   0.21   0.21   0.22   0.20
Sector average   1.02   0.87   0.83   0.89   0.79   0.86   0.65   0.66   0.69   0.60   5. Discussion and perspectives

                                                                                          The application shows that CErCmA provides an effective
4.6.2. Effective policies should be developed and
                                                                                       tool for assessing energy requirements along with CO2 emis-
implemented to encourage governmental agencies
                                                                                       sions in China. The combination of scenario analysis and the
and corporations to increase energy efficiency
                                                                                       inputeoutput model provides not only a thorough, integrated
    The model results clearly show that in all scenarios energy
                                                                                       analysis, but also a means to explicitly assess the impact of
intensity has an obvious backward driving effect on CO2 emis-
                                                                                       each driving force.
sions, second only to the forward driving effect of per capita
                                                                                          Further work is needed to address the followings in order to
GDP. What’s more, efforts to change China’s coal-dominated                             improve our model.
energy structure will take a long term to take effect, thus en-
ergy efficiency improvement will still play a pivotal role in
                                                                                       5.1. The limitation of the static IeO model
CO2 mitigation.
    The manufacturing and transportation sectors consume the
                                                                                           So far, the methodology of the dynamic IeO model is
major share of energy in China, and their energy intensities are
                                                                                       still being developed. For our current system we chose the
very high, much higher than the sector average. Model results
                                                                                       classical static IeO model. However, a complete static
show that their share of emissions is decreasing but will main-
                                                                                       approach would fail to identify the structural changes. To
tain the main part of total CO2 emissions in recent 20 years.
                                                                                       address this problem, we applied an adjustment to the base
The high CO2 intensity of manufacturing is determined by
                                                                                       year direct requirement matrix Ac by using the RAS approach
its high energy intensity. Therefore, certain policies must be
                                                                                       to obtain a possible structural change in this paper. In this
continuously implemented to decrease the manufacturing sec-
                                                                                       way, we could simulate the structural changes during the
tor’s energy intensity, such as accelerating the adjustment of
                                                                                       time horizon of our study.
the industrial and product structures within the manufacturing
                                                                                           Nevertheless, the RAS approach has some weakness,
sectors to improve manufacturing energy efficiency.
                                                                                       primarily its economic assumptions: the sector consistency
    The shares of construction and commerce in total energy
                                                                                       of substitution and manufacturing impacts is not satisfied in
consumption increase rapidly, thus there is an induced reduction
                                                                                       many cases. One way to improve the RAS approach may be
in CO2 emissions because of the low CO2 intensities of these
                                                                                       to combine it with a case study of the key coefficients in a di-
two sectors. Therefore particular attentions should also be
                                                                                       rect requirement matrix. Today, a great deal of attention is be-
paid to the energy efficiency improvements in these two sectors.
                                                                                       ing focused on improving this approach. Accordingly, in the
                                                                                       future, we plan to trace the development of the RAS approach
4.6.3. The potential for CO2 mitigation in China is limited in                         and other possibly more effective adjustment approaches to
the next 20 years, and thus decision making should be                                  improve the precision of the current system.
based on this key point
   From today until the 2020, China’s GDP is expected to                               5.2. Technology scenario base
maintain a high growth rate. While the special coal-dominated
energy structure is not expected to change much in the near                               Because of data availability limitations, the technology
future, and because the efficiency of coal is much lower                                scenarios in the current version were attained by adjusting cur-
Table 10                                                                               rent energy layouts. This kind of data source would, to some
Sector CO2 intensity (tC/104Yuan)                                                      extent, weaken the plausibility of the technology scenarios
Sector           2010                               2020                               and limit the assessment of the impact of technology in terms
                                                                                       of depth. In future studies, researchers should try to improve
                 A1     A2     BAU C1        C2     A1     A2     BAU C1        C2
                                                                                       the technology scenario base.
Agriculture      0.29   0.25   0.24   0.25   0.23   0.27   0.21   0.21   0.22   0.20
Manufacturing    1.61   1.37   1.32   1.40   1.25   1.24   0.94   0.99   1.04   0.91
Construction     0.14   0.12   0.11   0.12   0.11   0.18   0.13   0.13   0.14   0.12   5.3. Carbon tax analysis: quantifying policy
Transportation   1.50   1.20   1.15   1.22   1.09   1.41   0.95   0.97   1.01   0.88   recommendations
Commerce         0.25   0.21   0.21   0.22   0.20   0.21   0.17   0.17   0.18   0.16
Service          0.22   0.20   0.19   0.20   0.18   0.20   0.16   0.16   0.17   0.15      Quantifying the feedback of certain policies could
Sector average   0.87   0.74   0.71   0.75   0.67   0.71   0.53   0.54   0.57   0.50
                                                                                       enable us to test the possible executive effects of the
Y. Fan et al. / Environmental Modelling  Software 22 (2007) 378e393                                         391

policies. Carrying out a carbon tax analysis can be a possible               will increase by 10.5%, from 45% in 1995 to 55.5%
application if the carbon tax can be incorporated into the                   in 2010.
model.
                                                                        (4) Transportation industry.

5.4. Models on the regional level                                            Energy efficiency in 2010 will be a little higher than that
                                                                             in 1995.
   Current version only includes models on the national
level. However, social and economic factors, such as                    (5) Household energy consumption.
population intensity and income levels, as well as energy effi-
ciency significantly differ among regions in China. Modeling en-              In 2010, urban household energy efficiency is hopefully to
ergy requirements and CO2 emissions on a regional level would                reach 50% of the level of developed countries in early
be of great help to energy and environment policy making.                    1990s; rural household efficiency will rise from 25% in
                                                                             1995 to 45%.
                                                                        (6) Other industries.
Acknowledgements
                                                                             In 2010, energy efficiency is hopefully to reach the level
   The authors gratefully acknowledge the financial support
                                                                             of developed countries in early 1990s, i.e., rise 5 to 10%
from the National Natural Science Foundation of China
                                                                             from the level of 1995.
(NSFC) under the grants Nos.70425001, 70573104 and
70371064, the Key Projects from the Ministry of Science and
Technology of China (grants 2001-BA608B-15, 2001-BA605-
01), Harvard University Committee on Environment China Pro-             Appendix B
ject. Ying Fan would like to thank Prof. Tom Lyons, Prof. Yong-
                                                                        Income elasticity of various sectors
miao Hong and Ms. Deborah Campbell at Cornell University for
                                                                        Sectors                 1992e2005                      2005e2025
their valuable comments and kind help. Yi-Ming Wei truly ap-
preciates the supports from Prof. Michael B. McElroy and Mr.                                    Rural          Urban           Rural          Urban
Chris P. Nielsen at Harvard University. We also would like to           Agriculture             0.561          0.767           0.509          0.743
thank Prof. A. J. Jakeman and the other four anonymous referees         Manufacturing           1.100          1.100           1.100          1.100
                                                                        Construction            1.100          1.100           1.100          1.100
for their helpful comments on the earlier draft of our paper ac-
                                                                        Transportation          1.200          1.200           1.200          1.200
cording to which we improved the content.                               Commerce                1.200          1.200           1.200          1.200
                                                                        Services                1.200          1.200           1.200          1.200
                                                                        A modification of Hubacek and Sun (2001).
Appendix A. A brief introduction of the National
Energy-Saving Layout
                                                                        References
   The Group of the Academy of Macroeconomic Research of
the State Development Planning Commission figured out the po-            Bach, S., Kohlhaas, M., Meyer, B., Praetorius, B., Welsch, H., 2002. The
tential of energy efficiency improvement in sectoral final energy             effects of environmental fiscal reform in Germany: a simulation study.
                                                                            Energy Policy 30, 803e811.
consumption through adopting various techniques and mea-
                                                                        Ball, M., Calaminus, B., Kerdoncuff, P., Rentz, O., 2005. Techno-economic da-
sures. (Workgroup of the Academy of Macroeconomic Re-                       tabases in the context of integrated assessment modelling. Environmental
search of the State Development Planning Commission, 1999b).                Modelling  Software 20, 1189e1193.
                                                                        Chen, W.Y., 2005. The costs of mitigating carbon emissions in China:
(1) Iron and steel industry.                                                findings from China MARKAL-MACRO modeling. Energy Policy 33,
                                                                            885e896.
                                                                        Christodoulakis, N.M., Kalyvitis, S.C., Lalas, D.P., Pesmajoglou, S., 2000.
    Energy efficiency can rise by 12%, from 46% in 1995 to                   Forecasting energy consumption and energy related CO2 emissions in
    58% in 2010, a bit higher than that of industrialized coun-             Greece: an evaluation of the consequences of the Community Support
    try in early 1970s.                                                     Framework II and natural gas penetration. Energy Economics 22,
                                                                            395e422.
(2) Materials industry.                                                 Clinch, J.P., Healy, J.D., King, C., 2001. Modelling improvements in
                                                                            domestic energy efficiency. Environmental Modelling  Software 16,
    Energy use per unit output will decrease. Annually energy               87e106.
                                                                        Crompton, P., Wu, Y.R., 2005. Energy consumption in China: past trends and
    save rate will be 1.5%. Energy efficiency will increase by
                                                                            future directions. Energy Economics 27, 195e208.
    10%, from 40% in 1995 to 50% in 2010.                               Cruz, Luis M.G., 2002. Energyeenvironmenteeconomy interactions: an
                                                                            inputeoutput approach applied to the Portuguese Case. Paper for the 7th
(3) Building materials industry.
                                                                            Biennial Conference of the International Society for Ecological Econom-
                                                                            ics, ‘‘Environment and Development: Globalisation  the Challenges
    Energy use per unit output will decrease. Annually                      for Local  International Governance, ’’ Sousse (Tunisia), 6e9 March
    energy-saving rate will be 1.4%. Energy efficiency                       2002.
10 a model for china’s energy requireme
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10 a model for china’s energy requireme

  • 1. Environmental Modelling & Software 22 (2007) 378e393 www.elsevier.com/locate/envsoft A model for China’s energy requirements and CO2 emissions analysis* Ying Fan a, Qiao-Mei Liang a,b, Yi-Ming Wei a,*, Norio Okada c a Institute of Policy and Management, Chinese Academy of Sciences, Beijing 100080, China b Graduate School, Chinese Academy of Sciences, Beijing 100080, China c Kyoto University, Kyoto 611-0011, Japan Received 17 December 2004; received in revised form 28 November 2005; accepted 9 December 2005 Available online 20 March 2006 Abstract This paper introduces a model and corresponding software for modeling China’s Energy Requirements and the CO2 Emissions Analysis Sys- tem (CErCmA). Based on the inputeoutput approach, CErCmA was designed for scenario analysis of energy requirements and CO2 emissions to support policymakers, planners and others strategically plan for energy demands and environmental protection in China. In the system, major drivers of energy consumption are identified as technology, population, economy and urbanization; scenarios are based on the major driving forces that represent various growth paths. The inputeoutput approach is employed to compute energy requirements and CO2 emissions under each scenario. The development of CErCmA is described in a case study: China’s energy requirements and CO2 emissions in 2010 and 2020 are computed based on the inputeoutput table of 1997. The results show that China’s energy needs and related CO2 emissions will grow exponen- tially even with many energy efficiency improvements, and that it will be hard for China to maintain its advantage of low per capita emissions in the next 20 years. China’s manufacturing and transportation sectors should be the two major sectors to implement energy efficiency improve- ments. Options for improving this model are also presented in this paper. Ó 2006 Elsevier Ltd. All rights reserved. Keywords: Energy requirement; CO2 emissions; Scenario analysis; Inputeoutput model 1. Introduction environment for humans and all other living beings, threaten- ing the existence of humankind. Global warming, caused by increasing emissions of CO2 In order to control the continuous global warming and pro- and other greenhouse gases as a result of human activities, is tect the living environment, the Kyoto Protocol to the United one of the major threats now confronting the environment. Nations Framework Convention on Climate Changes, signed CO2 accounts for the largest share of total greenhouse gases, in Kyoto, Japan in 1997, sets detailed emissions mitigation and its impact on the environment is also the greatest. If an- commitments for the 38 major industrialized countries. thropogenic CO2 emissions are allowed to increase without Although the protocol did not set an explicit CO2 reduction limits, the greenhouse effect will further destroy the obligation for China and other developing countries, these nations still face great pressure from the environment. In 2003, CO2 emissions caused by fuel combustion in China * National Natural Science Foundation of China under grant Nos.70425001, were about 0.849 billion tons of carbon (tC), accounting for 70573104 and 70371064, and the Key Projects of National Science and Tech- 13.1% of the world’s total, second only to the United States, nology of China (2001-BA608B-15, 2001-BA605-01). the largest CO2 emitter worldwide (IEA, 2003). * Corresponding author. Institute of Policy and Management (IPM), Chinese In addition to the current high CO2 emissions is the proba- Academy of Sciences (CAS), P.O. Box 8712, Beijing 100080, China. Tel.: þ86 10 62650861; fax: þ86 10 62542619. bility that China’s economy will continue to grow rapidly over E-mail addresses: ymwei@mail.casipm.ac.cn, ymwei@263.net (Y.-M. the next 50 to 100 years (Development Research Center of the Wei). State Council of China, 2003). Since almost all of economic 1364-8152/$ - see front matter Ó 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.envsoft.2005.12.007
  • 2. Y. Fan et al. / Environmental Modelling & Software 22 (2007) 378e393 379 activities consume energy, energy needs, along with CO2 certain key factors affecting CO2 emissions and evaluate their emissions, will inevitably increase, which will likely create impacts (e.g., Lee and Lin, 2001; Paul and Bhattacharya, tensions between the country’s need for economic growth, 2004; Yabe, 2004). Some focus on one factor, such as socio- energy and environmental protections. These divergent pres- economic structural change (Kainuma et al., 2000), or con- sures could hinder China’s goal of sustainable development. sumption patterns (Kim, 2002). To address this problem effectively, analysis tools are required Other researchers primarily analyze the impact of certain so as to support energy and environmental policy decision economic activities or governmental policies on energy con- making. For this purpose, this study investigated and devel- sumption and related CO2 emissions, such as the impact of in- oped China’s Energy Requirements & CO2 Emissions Analy- ´ ´ ternational trade (Machado et al., 2001; Sanchez-Choliz and sis System (CErCmA) to assess how changing certain social Duarte, 2004; Kondo et al., 1998; Cruz, 2002), and the effects and economic policies could impact China’s future energy of certain policy reforms or frameworks (Bach et al., 2002; needs and CO2 emissions. Christodoulakis et al., 2000). Many studies have examined CO2 emissions analysis tools Our study extends the sensitivity analysis and applies it to including Silberglitt et al. (2003), Savabi and Stockle (2001), China’s energy and environmental protection issues. Firstly, ´ Roca and Alcantara (2001), Gielen and Moriguchi (2002), major energy consumption impact factors are identified: eco- Clinch et al. (2001), Hsu and Chen (2004), Winiwarter and nomic growth, technological changes, population growth, Schimak (2005), Galeotti and Lanza (2005), Pan (2005), changing consumption and production patterns, and urbaniza- Scrimgeour et al. (2005), Ball et al. (2005) and Sun (1999). tion. Secondly, we construct a set of future scenarios describ- Similar investigations into CO2 emissions analysis tools ing different growth paths based on these factors; then we geared for China include presenting forecasts of energy con- apply the IeO model to compute energy requirements along sumption and related emissions (Lu and Ma, 2004; Chen, with CO2 emissions under each scenario. 2005; Crompton and Wu, 2005; Gielen and Chen, 2001), ana- This paper is organized as follows: lyzing strategies for developing a sustainable energy system (Qu, 1992; Wu and Li, 1995; Ni and Thomas, 2004; Xu In Section 1 the CErCmA modeling framework is et al., 2002), assessing impacts of driving forces on historical described, along with its underlying rationale, design prin- emissions (Wu et al., 2005 and Zhang, 2000), exploring vari- ciples, model components and a case study. ous types of energy technology (Wu et al., 1994; Yan and Section 2 presents the rationale for using the IeO model to Kong, 1997; Feng et al., 2004; Mu et al., 2004; Eric et al., analyze China’s energy requirements and CO2 emissions 2003; Solveig and Wei, 2005), and energy efficiency standards along with the system components. Section 3 introduces (Lang, 2004 and Yao et al., 2005). software we developed based on the system explained in This study aims to extend current studies to obtain not just Section 2. Section 4 presents an application to assess one scenario but several possible energy requirements and China’s energy requirements along with projected CO2 emissions scenarios under different growth paths of various emissions in 2010 and 2020; this is followed by conclusions driving factors (not just focusing on technology factors but and corresponding policy recommendations. Finally, also focusing on changes in social and economic factors). strengths, research challenges and further work needed to The model and software for China’s Energy Requirements improve the system are presented in Section 5. and CO2 Emissions Analysis System (CErCmA) were devel- oped by combining the inputeoutput model (IeO model) with the scenario analysis concept. China’s energy system is huge and complex with many un- 2. CErCmA: approach and components certainties due to the driving forces of energy requirements. The traditional trend extrapolation approach works only 2.1. Basic approach: inputeoutput model when the changes in driving forces follow established paths, but can shed little light on the case of driving forces moving The CErCmA system was established based on the inpute in a brand-new orbit, e.g., certain risks or challenges baffle output (IeO) model, an analytical framework developed by economic development. Professor Wassily Leontief in the late 1930s. The main The current popular scenario analysis operates in a different purpose of the inputeoutput model is to establish a tessellated way in that ‘‘it does not try to predict the future but rather to inputeoutput table and a system of linear equations. envision what kind of futures is possible’’ (Silberglitt et al., An inputeoutput table shows monetary interactions or 2003). Through the description of various possible future exchanges between the economic sectors and therefore their scenarios representing different growth paths, driving force interdependence. The rows of an IO table describe the distri- uncertainties can be taken into account. Under each scenario, bution of a sector’s output throughout the economy, while the inputeoutput model is employed to assess China’s energy the columns describe the inputs required by a particular sector requirements along with its CO2 emissions. to produce its output (Miller and Blair, 1985). In recent years much attention has been given to these The system of linear equations also describes the distribu- issues. Some of these studies perform sensitivity analyses on tion of a sector’s output throughout the economy mathemati- one or more social and economic factors. Others identify cally, i.e., sales to processing sectors as inter-inputs or to
  • 3. 380 Y. Fan et al. / Environmental Modelling & Software 22 (2007) 378e393 consumers as final demand. The matrix notation of this system of fossil energy over primary energy, then the primary energy is: requirements QT can be calculated as: X ¼ AX þ Y ð1Þ P 3 QF i i¼1 where (suppose there are n sectors in the economy) X: total QT ¼ ð7Þ b output vector with n dimensions whose element Xj is the out- put of sector j; Y: final demand vector with n dimensions (final demand consists of household and government consumption, 2.2.2. Energy intensity model public and private investment, inventory and net-export); A: Energy intensity is the energy consumption per unit of GDP direct requirement matrix with n  n dimensions, its element output, which can be calculated using the following equation: aij denotes the direct requirement of sector j on sector i for per unit output of sector j. A is also called a technology matrix. QT QT DQ ¼ ¼ n ð8Þ aij is obtained through: GDP P Zj xij j¼1 aij ¼ ði; j ¼ 1; 2; .; nÞ ð2Þ Xj where DQ: energy intensity; Zj: value added of sector j. where xij is the monetary value from sector i to sector j. Thus Eq. (1) can be rewritten as: 2.3. CO2 emissions model X ¼ ðI ÿ AÞÿ1 Y ð3Þ 2.3.1. Total CO2 emissions According to the approach recommended by the IPCC where I denotes the n  n dimension identity matrix, and (PRC Ministry of Science and Technology Economy & ðI ÿ AÞÿ1 is called the ‘Leontief inverse matrix’ whose ele- Energy e NGO, 2001), the determinant of CO2 emissions dif- ments bij ði; j ¼ 1; 2; .; nÞ represent the total amount of com- fers from that of other greenhouse gases. Since CO2 emissions modity i required both directly and indirectly to produce one rely on the fuel carbon content, the IPCC does not calculate unit of final demand of commodity j. CO2 emissions as it does other greenhouse gases. In this study, the basic IeO model is extended to compute The calculation steps are as follows: energy requirements along with CO2 emissions. Only primary (1) Introduce a conversion coefficient d to change the unit energy is taken into account to avoid double counting. of energy consumption from ‘‘oil equivalent’’ to ‘‘106 kJ’’: 2.2. Energy requirements and CO2 emissions model d ¼ 41:868  106 kJ=toe 2.2.1. Energy requirements model (2) Obtain carbon content multiplied by potential carbon Firstly, the requirements of fossil fuels, i.e., coal, crude oil emissions factor matrix. and natural gas, are calculated by the following equation: (3) Correct non-oxidized carbon with the fraction of oxidized carbon. QF ¼ QP þ QR ð4Þ Table 1 shows the potential carbon emissions factors of the main fossil fuels and the fraction of oxidized carbon. where QF: total fossil energy requirements, 3  1 matrix, its (4) Conversion from oxidized carbon to CO2 emissions. element QF represents the requirement of each fossil fuel, j Similar to energy requirements, the calculation of CO2 i.e., coal, crude oil and natural gas; QP: production energy emissions is also divided into industrial production CO2 emis- requirements, 3  1 matrix, its element QP represents the pro- j sions and household CO2 emissions. duction energy requirements of each fossil fuel; QR: household energy requirements, 3  1 matrix, its element QR represents j M ¼ MP þ MR ð9Þ the household energy requirements of each fossil fuel. QP and QR are calculated, respectively, as follows (Cruz, 2002): Table 1 Potential carbon emission factors of leading fossil fuels and their fraction of QP ¼ CðI ÿ AÞÿ1 Y ð5Þ oxidized carbon Fuel Potential carbon emissions Fraction of where C: 3  n matrix, its element cij represents the (physical) factora (kg carbon/106 kJ) oxidized carbonb quantity of fuel i used per unit of total output in sector j. Coal 24.78 0.98 Crude oil 21.47 0.99 QR ¼ WP ð6Þ Natural gas 15.30 0.995 a Workgroup 3 of the National Coordination Committee on Climate Change where W: 3  1 vector, representing per capita household (Xue, 1998). energy consumption, each element of which corresponds to b IPCC (PRC Ministry of Science and Technology Economy & Energy e one type of fossil fuel; P: population; suppose b is the ratio NGO, 2001).
  • 4. Y. Fan et al. / Environmental Modelling & Software 22 (2007) 378e393 381 where M: total CO2 emissions; MP: production CO2 emissions; 2.4.1. Final demand Y f for terminal year f M R: household CO2 emissions; M P and M R can be calculated The procedure to calculate future final demand Yf consists by the following equations, respectively (unit: billion tC). of three steps: X 3 2.4.1.1. Calculate future per capita expenditure for each sec- MP ¼ d e j hj Q P j ð10Þ tor. Income elasticity measures the percent change of expen- j¼1 diture induced by a percent change of income. That is: X 3 MR ¼ d e j hj Q R ð11Þ Kf ÿ Kc j c j¼1 3¼ fK c ð15Þ L ÿL where ej: the carbon emissions factor of fossil fuel j (unit: Lc kg C/106 kJ); hj: the fraction of oxidized carbon of fuel j. where 3: income elasticity; K f: per capita expenditure for ter- 2.3.2. Other parameters of CO2 emissions minal year f; Kc: per capita expenditure for base year c; Lf: per capita income for terminal year f; Lc: per capita income for 2.3.2.1. Per capita CO2 emissions. base year c. Transforming Eq. (15) for the future per capita expenditure M is obtained as follows: n¼ ð12Þ P ÿ f Á f L ÿ Lc where v: per capita CO2 emissions. K ¼ 1þ3 Kc ð16Þ Lc f f f 2.3.2.2. CO2/TPEC. CO2/TPEC describes CO2 emissions Similarly Ku and Kr can be obtained, where Ku : urban per f from per unit of total primary energy consumption (TPEC). capita expenditures for terminal year f; Kr : rural per capita expenditures for terminal year f. P 3 dej hj QF 2.4.1.2. Calculate future aggregate household consump- M j¼1 j X3 QF j G¼ ¼ ¼ dej hj ð13Þ tion. The aggregate household consumption can be considered QT QT j¼1 QT as the product of per capita expenditures and total population. Urban and rural aggregate household consumption should be where G: CO2/TPEC. calculated separately, since there is a huge gap between city Eq. (13) shows that the change of CO2/TPEC can reflect the and countryside consumption patterns and standard of living. change in energy structure. T f ¼ Tu þ Trf ¼ Ku P f h þ Kr Pf ð1 ÿ hÞ f f f ð17Þ 2.3.2.3. CO2 emissions intensity. where T f: aggregate household consumption for terminal year M M QT f f f; Tu and Tr : urban and rural aggregate household consumption DM ¼ ¼ ¼ GDQ ð14Þ GDP QT GDP for terminal year f; h: urbanization rate, i.e., the share of urban population in the total population of the country, for terminal where DM: CO2 emissions intensity. year f. Eq. (14) implies that the trend of the change in CO2 emis- sions intensity is determined by that of energy intensity 2.4.1.3. Estimating future final demand. Here the future final because energy-related CO2 emissions result from fuel com- demand Y f: is estimated from the results of future aggregate bustion, and the variation speed of CO2 emissions intensity household consumption. is determined by the index of CO2/TPEC (Sun, 2003). Tf 2.4. Combining influences of in driving forces Yf ¼ ð18Þ qf Eqs. (4)e(8) show that future energy demand, the technol- where q f denotes the ratio of aggregate household consump- ogy matrix and the energy efficiency improvement matrix tion over final demand. must first be calculated in order to obtain future energy requirements. The process to obtain these variables also pres- 2.4.2. Direct requirement matrix A f for terminal year f ents how the changes of driving forces are combined into the Here, the RAS approach (Miller and Blair, 1985) is model. employed to obtain the future direct requirement matrix. In this paper superscript f indicates that the variable is The RAS method is a common tool used to update the related to terminal year f ; superscript c indicates that the inputeoutput matrix A f. It attempts to estimate the n  n tech- variable is related to base year c. nology coefficients from three types of information for the
  • 5. 382 Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 year of interest. Regarding this study, the information needed Scenario construction subsystem is as follows: Base year database (1) future total output for sector i, Xif ; (2) future totalPintermediate deliveries for sector i, Uif , which f f Zi Yi is equal to n xij , and equals sector’s total output Xif mi- j¼1 nus sector final demand Yif ; (3) future total sector intermediate purchases for sector i, Vif , Pn f f which is equal to f f i¼1 xij , and equals Xi minus sector Ac Xi U i Vi f value added Zi . The basic aim of RAS is that according to the substitution and manufacturing assumption about technology change, Xif , Uif , Vif are used to obtain row multipliers (R) and column mul- ^ a ijf c a ij ^ which are used to modify each row and each col- tipliers (S), umn of the base year direct requirement matrix Ac, respectively. These two multipliers can be obtained by using n f f an iterative algorithm, illustrated in Fig. 1. Next, the future Ui a ij X j j 1 direct requirement matrix Af can be calculated as follows: f Ui A ¼ RAc ^ f ^ S: ð19Þ ri N Ui f Ui Ui ? f f 2.4.3. Cf and W f a ij ri a ij Y The future energy use, per unit of output, matrix C f, and per capita household energy consumption matrix W f need to be ob- n f f tained to explicitly embody the impacts of changes in technol- Vi a ij X j ogy and energy/environment policy on energy requirement i 1 and related CO2 emissions. The improvements from Cc and Vj f W c to C f and W f can be obtained by referring to current energy N sj layouts. Vj f Vj V j ? f f 3. Software a ij a ij s j Y Software to forecast future energy requirements and energy END intensity as well as CO2 emissions using the model above has been developed using Visual Basic 6.0, called CErCmA 1.0. Fig. 1. Iterative algorithm of RAS. 3.1. Characterization of main components emissions/TPEC), per capita energy requirements and CO2 emissions. As illustrated in Fig. 2, CErCmA is composed of four parts: 3.2. Database and database management subsystem Database and database management subsystem: to input, store and manage base year data, factor scenarios and 3.2.1. Database modeling results. The database in this system consists of the base year data- User interface: to provide graphic interface so as to conve- base, the factor scenario database and the result database. niently input parameters and search results. The base year database contains base year inputeoutput Scenario construction subsystem: to combine factor sce- tables, socio-economic data and technology data. narios into the model and generate integrated scenarios. The factor scenario database includes an economic scenario Model base subsystem: to simulate the situation in termi- base, a population scenario base, an urbanization scenario base nal years for each constructed scenario. and a technology scenario base. Data in each scenario base come from the latest statistics released by the government As its result, the system generates the following: energy and other authorities listed in the references. requirements for each sector and for each fuel type, energy in- tensity for each sector, CO2 emissions for each sector and each The economy scenario base contains data on the GDP fuel type, CO2 intensity for each sector, CO2 emissions from growth rate, per capita income growth rate, variations of per unit of the total primary energy consumption (CO2 income elasticity and industrial structure.
  • 6. Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 383 management subsystem Database database Factor scenario Base year database Results database database Future per capita income per capita income Future income elasticity population Future population urbanization Future urbanization aggregate household consumption Direct requirement matrix Energy use per unit output GDP growth matrix Industrial structure Per capita household energy Energy layouts consumption matrix construction subsystem Scenario Final demand Future final Technology change estimation demand estimation User interface Future direct requirement matrix Future energy use per unit output matrix User Future per capita household energy consumption matrix Model base subsystem Energy Energy requirement model intensities Energy reuirements CO2 emissions model Total CO2 Per capita CO2 CO2 / CO2 emission emissions emissions TPEC intensities Calculation Data and data Main NOTES: Database components output flow Fig. 2. Software structure of CErCmA 1.0. The population scenario base contains data on yearly total 3.2.2. Database management subsystem population. The database management subsystem provides convenient The urbanization scenario base contains data of the yearly editing functions that allow users to add, modify and display urbanization rate. data to both the factor scenario base and results base. The technology scenario base contains data on rates of Users can add custom factor scenarios to the factor change in the energy consumption per unit output, rate scenario base when running the system. But without adminis- of change in per capita household energy consumption, trators’ authority to confirm these operations, the custom etc. scenarios are automatically deleted when the program shuts The results database contains the scenario analysis results down so as to maintain the validity and consistency of the including energy requirements and related CO2 emissions system. plus additional details. Users can create tables and print results for the results base.
  • 7. 384 Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 3.3. Software description Table 2 Scenario description The main interface consists of two parts. The right side of Scenarios Scenario description the main interface is the welcome interface, along with login Scenario A1 Various challenges and risks constrain economic information for users. If a user logs in as an administrator, (low economy) development and urbanization advancement, and the interface will display the corresponding username and cause technology to advance at a lower speed than in scenario B. rights of the user. Beneath the welcome interface is a fast- Scenario A2 The economy and urbanization scenarios are the entrance for administrators. (low economy same as those in scenario A1, while supposing The left side of the main interface displays the scenario sets þ technology) that the government initiative efforts to maintain of each driving factor. Users can set scenarios for each factor a technological improvement to achieve its and click the ‘‘scenario generation’’ icon on the toolbar to ac- preset objects of a sound national energy plan. Scenario B Assume in the coming 20 years China’s economy tivate them; next, a synthesis scenario appears and is demon- (business as usual) could maintain its current growth rate and realizes strated on the right side. When the user constructs all the a relatively high growth rate; per capita income scenarios of concern, users can click the ‘‘scenario analysis’’ achieves the preset ‘well-off’, ‘developed’ society icon and the analysis results will be generated and automati- objectives; population and urbanization rate grow cally transferred and inserted into tables and graphics for at a medium speed; technology improvement meet the preset objectives of the PRC’s national immediate presentation. energy plan. Scenario C1 On the base of scenario B, assume population 4. An application: China’s energy requirements and (B þ high population) growth at a much higher speed resulting in a new population peak. related CO2 emissions for 2010 and 2020 Scenario C2 On the basis of scenario B, assume technology (B þ technology) advances at a higher rate than in scenario B. In this application the analysis years are set at 2010 and 2020. In this scenario 2010 is the terminal year of the 11th 4.2.1. Economy scenarios Five-year plan; 2020 is when the Chinese aims to realize its The Development Research Center of the State Council goal of building an economically secure society. The govern- (2003), led by researcher S. Li, identifies two types of ment (Development Research Center of the State Council, economic development as shown in Table 3. This study also 2003) set the following objectives: ‘‘On the basis of optimized predicts the future industry structure, including the percent- structure and better economic returns, efforts will be made to ages for primary, secondary and tertiary industries, which quadruple the GDP of 2000 by 2020’’ and ‘‘achieve industri- are, respectively, 10.6:54.2:35.2 for year 2010, and alization by 2020.’’ During this period, major changes are ex- 7.0:52.6:40.4 for year 2020. pected in the economy, population, urbanization and technology, which will further increase both production and 4.2.2. Population scenarios household energy demand. The main question here is: How Our study utilizes the forecasts of the Quantitative will changes in major social and economic factors impact Economics Institute of the Chinese Academy of Social China’s future energy requirements and CO2 emissions? Could Sciences (CASS) and UNEP (Zhou, 2000) (Table 4). China maintain its advantage of low per capita CO2 emis- sions? Therefore, it is of great significance to assess the energy 4.2.3. Urbanization scenarios requirement and related CO2 emissions in these two years. Our study refers to the findings of the Institute of Geographic Sciences and Natural Resources Research of the 4.1. Model assumption Chinese Academy of Sciences (Liu et al., 2003). This study examines three scenarios: Since the latest inputeoutput tables available for China are from 1997, in this application the base year is set to 1997. - High scenario: China’s market-oriented reforms will be Six production sectors and a residential sector are consid- a complete success and significantly hasten the urbaniza- ered in this application: agriculture, manufacturing, construc- tion process. The urbanization rate will be 44.7% in tion, transportation, commerce and service, as well as 2010 and 54.7% in 2020. - Medium scenario: China’s market-oriented reforms will be residential energy use. Primary energy is divided into four groups: coal, oil, natural gas, and hydro and nuclear power. a partial success and the urbanization trend will follow the common S-curve trajectory, experienced in the past by 4.2. Scenario Table 3 Forecast of economic growth (%) The following five scenarios are established around various Scenarios Year 2001e2010 Year 2011e2020 social and economic factors affecting energy requirements; the scenarios represent five distinct growth paths that China might Economy-base 7.9 6.6 Economy-low 6.6 4.7 follow in the future (Table 2).
  • 8. Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 385 Table 4 Table 6 Forecast of China’s population (in billions) Forecast of ratio of renewable energy over primary energy (%) Scenarios (organizations) 2010 2020 Ratios 2010 2020 High (CASS) 1.48 1.52 Hydro power 9.3 10.3 Low (UNEP) 1.39 1.45 Nuclear power 2.3 3.64 4.5.1. Total and per capita energy requirements and most countries. In this scenario the urbanization rate will related CO2 emissions be 43.03% in 2010 and 50.14% in 2020. Fig. 4 presents the results of energy requirements along - Low scenario: China’s market-oriented reforms will not with CO2 emissions in the model scenarios. In 2010, the total significantly advance economic progress and the urbaniza- energy requirement will be 1.57e1.84 billion tons of oil tion process will still be constrained by the system as in equivalent (toe), and the corresponding CO2 emissions will the past 20 years. The urbanization rate will be 42.24% be 1.33e1.57 billon tC; in 2020, the total energy requirement in 2010 and 48.25% in 2020. will be 1.88e2.64 billion toe, and corresponding CO2 emis- sions will be 1.54e2.17 billion tC. An analysis of the forecast results for these scenarios shows 4.2.4. Technology scenarios the followings. 4.2.4.1. Technology improvement matrix. Table 5 presents the 4.5.1.1. Energy efficiency plays an important role in the control three sets of technology improvement scenarios. of energy consumption and related CO2 emissions. Scenario A1 is one of the two scenarios with the highest level of energy 4.2.4.2. Ratio of renewable energy over primary energy. This needs and CO2 emissions. According to the scenario construc- study utilizes the forecasts of the Academy of Macroeconomic tion, economic growth and urbanization advancement in this Research Workgroup of the State Development Planning scenario are the lowest of all, which means the main driver Commission (1999a) (Table 6). of energy consumption for final demand is the lowest. But the improvement speed of energy efficiency in this scenario is also the lowest; and thus the terminal energy requirement 4.3. Data and related CO2 emissions in this scenario are higher than those in other scenarios. Table 7 describes the data sources for the study. On the other hand, economic growth and urbanization ad- vancement in scenario C2 occur at the same speed as in sce- 4.4. Model checking narios B and C1, and at a higher speed than in scenarios A1 and A2. Since improvement speed of energy efficiency is the With the data from 1997, we checked our model for the highest in this scenario, the terminal energy requirement and period 1998e2003, as shown in Fig. 3. Generally, the simula- related CO2 emissions in this scenario are lower than in other tion results are close to the actual statistical data, with the scenarios except scenario A2. largest relative error 11.19%, the smallest relative error Through this analysis it is clear that energy efficiency 0.90%, and the average relative error 2.21%. improvement plays an important role in the control of energy Table 7 4.5. Simulation results and policy implication Data sources Variable Source In this section, the results of energy requirements and re- (matrix) lated CO2 emissions in each scenario for 2010 and 2020 are Ac, Yc, Tu , c Inputeoutput table of China (Department of National Accounts, discussed. Tr , qf a c National Bureau of Statistics, P.R. China, 1997) 3fu , 3fr A modification of Hubacek and Sun (2001), see Appendix B Table 5 Lc , Lc , Pc , hc China Statistical Yearbook (National Bureau of Statistics, P.R. u r Technology scenarios China, 1998) Cc, Wc Combining the data in energy balance tables Scenario Description 1997 with the corresponding data in Low Energy efficiency achieves a 5% less improvement than inputeoutput table of China (Department of National Accounts, the medium case. National Bureau of Statistics, P.R. China, 1977; Department of Medium The improvement of energy efficiency achieves the goal Industrial and Transportation Statistics, National Bureau of of the National Energy-Saving Layout (Academy of Statistics, P.R. China, 2001) Macroeconomic Research, State Development Planning a The ratio of the construction sector is zero in the yearbook of 1997. Here Commission, 1999b, see Appendix A for a brief introduction). this ratio is set to be 15% which is allocated for urban and rural household High Energy efficiency achieves a 5% greater improvement than consumption based on the ratio between urban and rural population (Hubacek the medium case. and Sun, 2001).
  • 9. 386 Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 1200.00 1100.00 1000.00 900.00 800.00 700.00 600.00 500.00 1997 1998 1999 2000 2001 2002 2003 simulation results 924.56 813.91 881.53 893.26 955.89 1106.54 1138.06 statistic data 924.56 887.72 873.66 874.85 905.85 995.20 1126.66 simulation results statistic data Fig. 3. Energy demand (requirements) for 1998e2003 (million toe). consumption and related CO2 emissions. Great efforts should C2. The result is that energy consumption along with CO2 be taken to improve energy efficiency in final demand sectors, emissions in this scenario for the two final years are both lower to enhance energy conversion efficiency, and to gradually than in scenario C2. It is obvious that the low energy con- create a lower energy consumed product system and a life sumption and low CO2 emissions in scenario A2 is obtained system. at the cost of a low economic growth rate. The above results show that total energy requirements and 4.5.1.2. Population has a significant impact on energy require- CO2 emissions increase rapidly in all scenarios. As for per ments along with CO2 emissions. Scenario C1 is the ‘‘high capita results, Fig. 5 compares per capita CO2 emissions in population’’ scenario in which the energy requirements and re- each scenario with the world average in 2003. It appears that lated CO2 emissions will be second place in 2010, and rise to in 2010, per capita CO2 emissions in scenario A1 are slightly first place in 2020. So even with the development of technol- higher than the world average in 2003. Per capita CO2 emis- ogy, energy requirements along with CO2 emissions will still sions in all the scenarios will rise until 2020 by more than increase rapidly if planners and policymakers fail to control the world rate in 2003. population at the same time. 4.5.2. Energy structure and CO2 emissions by energy type 4.5.1.3. Energy efficiency is highly related to economic The forecast of energy structure and CO2 emissions by growth. Energy efficiency in scenario A2 improves slower energy type are shown in Figs. 6 and 7, respectively. than that in scenario C2, but economic growth and urbaniza- Variations of energy structures in all scenarios are similar in tion rates are also slower in this scenario than in scenario general. The proportion of coal decreases, but still occupies 3.00 Energy requirements (billion toe) CO2 emissions (billion tC) 2.50 2.00 1.50 1.00 0.50 0.00 1997 2010 2020 1997 2010 2020 A1 0.94 1.84 2.50 0.87 1.57 2.06 A2 0.94 1.57 1.88 0.87 1.33 1.54 B 0.94 1.67 2.52 0.87 1.42 2.08 C1 0.94 1.78 2.64 0.87 1.51 2.17 C2 0.94 1.59 2.31 0.87 1.35 1.90 Fig. 4. Results of energy requirements and related CO2 emissions in assigned scenarios.
  • 10. Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 387 1.5 Per capita CO2 emissions (tC/capita) 1.4 1.3 1.2 1.1 1 0.9 0.8 0.7 0.6 0.5 1997 2010 2020 ScenarioA1 ScenarioA2 ScenarioB ScenarioC1 ScenarioC2 World Average 2003 Fig. 5. China’s per capita CO2 emissions in 2010 and 2020 vs. world average level in 2003. the principal usage; the proportions of oil and natural gas rises, In the two final years, both the lowest energy intensity and but the share of natural gas use is still low. CO2 intensity appear in scenario C2, and both the highest en- As shown in Table 1, the potential emissions factor of coal ergy intensity and CO2 intensity appear in scenario A1. is much larger than that of oil and natural gas. Thus, generally, In general, energy intensity and CO2 intensity are declin- the energy structure tends to impact more significant on CO2 ing. CO2 intensity is declining faster than energy intensity be- emissions control. But since coal still dominates the energy cause CO2/TPEC, another factor determining CO2 intensity, is structure, CO2 emissions by coal is the largest emissions factor also declining. in the future two years (see Fig. 7). So it appears that the But in all the scenarios the decline of CO2/TPEC is slow. potential to control CO2 emissions by adjusting the energy This implies that in two final years the coal-dominated energy structure during this period is limited. structure is changing very little. CO2/TPEC determines the variation speed of CO2 intensity. The slow declining speed 4.5.3. Energy intensity, CO2 intensity and CO2/TPEC of CO2/TPEC to a great extent limits the decline of CO2 emis- In 2010, energy intensity will be 0.79e1.023 toe/104 Yuan, sions in this period. CO2 intensity will be 0.671e0.87 tC/104 Yuan, and CO2/ TPEC will be about 0.85 tC/toe. In 2020, energy intensity 4.5.4. Relationship between CO2 emissions will be 0.604e0.864 toe/104 Yuan, CO2 intensity will be and driving factors 0.497e0.711 tC/104 Yuan, and CO2/TPEC will be about According the definition of CO2 emissions, the following 0.823 tC/toe. decomposition was performed to assess the impacts of major Table 8 shows the change rate of energy intensity and CO2 driving forces on CO2 emissions: intensity in 2010 vs. 1997, and 2020 vs. 2010. CO2 emissions ¼ CO2 intensity  GDP 2020 C2 ¼ CO2 =TPEC  energy intensity  GDP 2020 C1 2020 B 2020 C2 2020 A2 2020 C1 2020 B 2020 A1 2020 A2 2010 C2 2020 A1 2010 C1 2010 C2 2010 B 2010 C1 2010 A2 2010 B 2010 A2 2010 A1 2010 A1 Base year Base year 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Coal Oil Natural Gas Other Coal Oil Natural Gas Fig. 6. Energy structure in constructed scenarios (%). Fig. 7. CO2 emissions by energy type in constructed scenarios (%).
  • 11. 388 Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 Table 8 driving forces of the ratio of fossil energy over primary energy Change rate of energy intensity and CO2 intensity and that of CO2/TFES are quite small. Scenarios 2010 vs. 1997 2020 vs. 2010 In all the scenarios, the forward driving effect of per capita Energy intensity CO2 intensity Energy intensity CO2 intensity GDP growth is much larger than the backward driving effects A1 0.82 0.76 0.84 0.82 of other factors, which can explain why CO2 emissions are A2 0.70 0.65 0.75 0.72 growing so fast. B 0.67 0.62 0.79 0.77 Between 2010 and 2020, the backward driving effect of en- C1 0.71 0.66 0.78 0.75 ergy intensity is smaller than between 1997 and 2010, which C2 0.64 0.59 0.76 0.74 shows that further technology enhancements will become more difficult. Therefore, on the one hand, certain policies should be devised to promote changes in energy structure ¼ CO2 =TFEC so as to effectively make use of the backward driving effect  the ratio of fossil energy over primary energy of the ratio of fossil energy over primary energy and that of CO2/TFES. On the other hand, changing energy structure  energy intensity  per capita GDP  population would be a long-term task, the effect of which is not quite likely to be seen before 2020 (Zhou and Yukio, 1996), so where, CO2/TFEC presents CO2 emissions from the total fos- the coal-dominated energy structure is not expected to change sil energy consumption. too much in the near future, the decline of energy intensity is The variation of CO2 emissions and that of each driving limited; correspondingly the decline of CO2 intensity is also force are calculated, respectively, as presented in Fig. 8. limited. Moreover, during this period China’s economy will The decomposition implies that, in the absence of extra still grow at a relatively high speed, so the potential for CO2 energy or environmental policies, among all the driving mitigation is limited. factors, per capita GDP plays the most important role, energy intensity comes in second, and population, third, while the 4.5.5. Sector energy requirements and CO2 emissions Figs. 9 and 10 show the results of sector and residential en- ergy requirements and CO2 emissions, respectively. C2 Variations in all the scenarios are similar. The energy need in manufacturing sector is declining, which shows the impact C1 of the accelerated development of service and transportation caused by accelerated urbanization. But due to the govern- 2010-2020 B ment’s objective ‘‘to achieve industrialization by 2020,’’ the scale of manufacturing will still expand. The energy require- A2 ments and CO2 emissions of this sector will still take the larg- est share, followed by the transportation sector. A1 The share of energy for the agriculture sector first increases and then declines: the share in 2010 is larger than in 1997, while the share in 2020 is smaller than in 2010, but is still larger than in 1997. This phenomenon can be explained by the two driving forces of opposite directions on agriculture en- C2 ergy consumption, i.e., the continuous decrease in agricultural energy usage in the industrial structure has a backward impact, C1 while the continuous increase in the agricultural mechaniza- tion level has a positive impact. 1997-2010 The shares of construction and commerce in total energy B consumption increase rapidly. The shares of transportation A2 and the service industry in 2010 rise markedly from the 1997 level, while their shares in 2020 vary not much from A1 those in 2010, they rise just a little. 0 0.5 1 1.5 2 2.5 3 4.5.6. Sector energy intensity and CO2 intensity population Tables 9 and 10 present the results of sector energy inten- per capita GDP sity and CO2 intensity, respectively. energy intensity In the two final years, the energy and CO2 intensities of the ratio of fossil energy over primary energy CO2/TFES manufacturing and transportation sectors are evidently higher CO2 emissions than average. For manufacturing, energy and CO2 intensities in scenario Fig. 8. Relationships between CO2 emissions and driving factors. A1 are much higher than those in the other four scenarios.
  • 12. Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 389 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Base 2010 A1 2020 A1 2010 A2 2020 A2 2010 B 2020 B 2010 C1 2020 C1 2010 C2 2020 C2 year Agriculture Manufacturing Construction Transportation Commerce Service Residential Fig. 9. Sector energy requirement in each scenario (%). For transportation, in 2010, energy intensity in all scenarios is 4.6. Policy implications quite close to that of manufacturing. Manufacturing and transportation take the largest shares of Summarizing the above forecast results and analyses of the energy and produce the largest amount of CO2 emissions, thus model, the following policy recommendations are proposed. the energy and CO2 intensities of these two sectors will to a great extent impact the speed of energy requirements and CO2 emissions growth. These two sectors should be pivotal 4.6.1. Policies promoting changes in energy structure in improving energy efficiency. should be devised to control the quickly increasing Among all scenarios, scenario A1 is the worst path in terms CO2 emissions of controlling the fast growth trends of energy requirements The above forecast results show that even in scenario C2, and CO2 emissions. where technology advances the fastest, CO2 emissions Energy and CO2 intensities in agriculture, construction, increase rapidly. Moreover, the increase of per capita emis- commerce and the non-material sectors remain lower than sions will quite possibly reach or exceed the worldwide aver- the sector average. The intensities of the construction sector age within 20 years. The results also show that with time are the lowest in the two final years, but tend to rise rapidly. goes on further enhancements in energy-saving technology As shown above, the shares of construction and commerce will become more and more difficult. Therefore, it is desir- in total energy consumption increase rapidly, there could be able to establish energy and environmental policies in favor an induced reduction in CO2 emissions. Therefore great efforts of cleaner energies as early as possible to accelerate the should be taken to maintain the low energy and CO2 intensities changes in energy structure and to support sustainable eco- in these sectors. nomic development. 100% 80% 60% 40% 20% 0% Base 2010 A1 2020 A1 2010 A2 2020 A2 2010 B 2020 B 2010 C1 2020 C1 2010 C2 2020 C2 year Agriculture Construction Commerce Residential Manufacturing Transportation Service Fig. 10. Sector CO2 emissions in each scenario (%).
  • 13. 390 Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 Table 9 than that of oil and natural gas in most cases (He et al., Energy intensity for each sector (toe/104 Yuan) 1995), the decline of energy intensity will likely be limited Sector 2010 2020 over the next 15 years. At the same time, the high cardinal A1 A2 BAU C1 C2 A1 A2 BAU C1 C2 number of coal, to a great extent, will likely limit the decrease Agriculture 0.35 0.31 0.29 0.31 0.28 0.35 0.27 0.27 0.28 0.25 of CO2 emissions by total fossil fuel consumption, which can Manufacturing 1.86 1.58 1.52 1.61 1.44 1.47 1.11 1.17 1.23 1.07 still cover the majority of total primary energy consumption. Construction 0.18 0.15 0.14 0.15 0.13 0.23 0.16 0.17 0.17 0.15 Consequently CO2 intensity will likely not drop considerably Transportation 1.95 1.55 1.49 1.58 1.41 1.88 1.26 1.29 1.35 1.17 fast in the next 20 years. Commerce 0.30 0.26 0.25 0.27 0.24 0.26 0.21 0.21 0.22 0.20 Service 0.29 0.26 0.25 0.26 0.24 0.26 0.21 0.21 0.22 0.20 Sector average 1.02 0.87 0.83 0.89 0.79 0.86 0.65 0.66 0.69 0.60 5. Discussion and perspectives The application shows that CErCmA provides an effective 4.6.2. Effective policies should be developed and tool for assessing energy requirements along with CO2 emis- implemented to encourage governmental agencies sions in China. The combination of scenario analysis and the and corporations to increase energy efficiency inputeoutput model provides not only a thorough, integrated The model results clearly show that in all scenarios energy analysis, but also a means to explicitly assess the impact of intensity has an obvious backward driving effect on CO2 emis- each driving force. sions, second only to the forward driving effect of per capita Further work is needed to address the followings in order to GDP. What’s more, efforts to change China’s coal-dominated improve our model. energy structure will take a long term to take effect, thus en- ergy efficiency improvement will still play a pivotal role in 5.1. The limitation of the static IeO model CO2 mitigation. The manufacturing and transportation sectors consume the So far, the methodology of the dynamic IeO model is major share of energy in China, and their energy intensities are still being developed. For our current system we chose the very high, much higher than the sector average. Model results classical static IeO model. However, a complete static show that their share of emissions is decreasing but will main- approach would fail to identify the structural changes. To tain the main part of total CO2 emissions in recent 20 years. address this problem, we applied an adjustment to the base The high CO2 intensity of manufacturing is determined by year direct requirement matrix Ac by using the RAS approach its high energy intensity. Therefore, certain policies must be to obtain a possible structural change in this paper. In this continuously implemented to decrease the manufacturing sec- way, we could simulate the structural changes during the tor’s energy intensity, such as accelerating the adjustment of time horizon of our study. the industrial and product structures within the manufacturing Nevertheless, the RAS approach has some weakness, sectors to improve manufacturing energy efficiency. primarily its economic assumptions: the sector consistency The shares of construction and commerce in total energy of substitution and manufacturing impacts is not satisfied in consumption increase rapidly, thus there is an induced reduction many cases. One way to improve the RAS approach may be in CO2 emissions because of the low CO2 intensities of these to combine it with a case study of the key coefficients in a di- two sectors. Therefore particular attentions should also be rect requirement matrix. Today, a great deal of attention is be- paid to the energy efficiency improvements in these two sectors. ing focused on improving this approach. Accordingly, in the future, we plan to trace the development of the RAS approach 4.6.3. The potential for CO2 mitigation in China is limited in and other possibly more effective adjustment approaches to the next 20 years, and thus decision making should be improve the precision of the current system. based on this key point From today until the 2020, China’s GDP is expected to 5.2. Technology scenario base maintain a high growth rate. While the special coal-dominated energy structure is not expected to change much in the near Because of data availability limitations, the technology future, and because the efficiency of coal is much lower scenarios in the current version were attained by adjusting cur- Table 10 rent energy layouts. This kind of data source would, to some Sector CO2 intensity (tC/104Yuan) extent, weaken the plausibility of the technology scenarios Sector 2010 2020 and limit the assessment of the impact of technology in terms of depth. In future studies, researchers should try to improve A1 A2 BAU C1 C2 A1 A2 BAU C1 C2 the technology scenario base. Agriculture 0.29 0.25 0.24 0.25 0.23 0.27 0.21 0.21 0.22 0.20 Manufacturing 1.61 1.37 1.32 1.40 1.25 1.24 0.94 0.99 1.04 0.91 Construction 0.14 0.12 0.11 0.12 0.11 0.18 0.13 0.13 0.14 0.12 5.3. Carbon tax analysis: quantifying policy Transportation 1.50 1.20 1.15 1.22 1.09 1.41 0.95 0.97 1.01 0.88 recommendations Commerce 0.25 0.21 0.21 0.22 0.20 0.21 0.17 0.17 0.18 0.16 Service 0.22 0.20 0.19 0.20 0.18 0.20 0.16 0.16 0.17 0.15 Quantifying the feedback of certain policies could Sector average 0.87 0.74 0.71 0.75 0.67 0.71 0.53 0.54 0.57 0.50 enable us to test the possible executive effects of the
  • 14. Y. Fan et al. / Environmental Modelling Software 22 (2007) 378e393 391 policies. Carrying out a carbon tax analysis can be a possible will increase by 10.5%, from 45% in 1995 to 55.5% application if the carbon tax can be incorporated into the in 2010. model. (4) Transportation industry. 5.4. Models on the regional level Energy efficiency in 2010 will be a little higher than that in 1995. Current version only includes models on the national level. However, social and economic factors, such as (5) Household energy consumption. population intensity and income levels, as well as energy effi- ciency significantly differ among regions in China. Modeling en- In 2010, urban household energy efficiency is hopefully to ergy requirements and CO2 emissions on a regional level would reach 50% of the level of developed countries in early be of great help to energy and environment policy making. 1990s; rural household efficiency will rise from 25% in 1995 to 45%. (6) Other industries. Acknowledgements In 2010, energy efficiency is hopefully to reach the level The authors gratefully acknowledge the financial support of developed countries in early 1990s, i.e., rise 5 to 10% from the National Natural Science Foundation of China from the level of 1995. (NSFC) under the grants Nos.70425001, 70573104 and 70371064, the Key Projects from the Ministry of Science and Technology of China (grants 2001-BA608B-15, 2001-BA605- 01), Harvard University Committee on Environment China Pro- Appendix B ject. Ying Fan would like to thank Prof. Tom Lyons, Prof. Yong- Income elasticity of various sectors miao Hong and Ms. Deborah Campbell at Cornell University for Sectors 1992e2005 2005e2025 their valuable comments and kind help. Yi-Ming Wei truly ap- preciates the supports from Prof. Michael B. McElroy and Mr. Rural Urban Rural Urban Chris P. Nielsen at Harvard University. We also would like to Agriculture 0.561 0.767 0.509 0.743 thank Prof. A. J. Jakeman and the other four anonymous referees Manufacturing 1.100 1.100 1.100 1.100 Construction 1.100 1.100 1.100 1.100 for their helpful comments on the earlier draft of our paper ac- Transportation 1.200 1.200 1.200 1.200 cording to which we improved the content. Commerce 1.200 1.200 1.200 1.200 Services 1.200 1.200 1.200 1.200 A modification of Hubacek and Sun (2001). Appendix A. A brief introduction of the National Energy-Saving Layout References The Group of the Academy of Macroeconomic Research of the State Development Planning Commission figured out the po- Bach, S., Kohlhaas, M., Meyer, B., Praetorius, B., Welsch, H., 2002. The tential of energy efficiency improvement in sectoral final energy effects of environmental fiscal reform in Germany: a simulation study. Energy Policy 30, 803e811. consumption through adopting various techniques and mea- Ball, M., Calaminus, B., Kerdoncuff, P., Rentz, O., 2005. Techno-economic da- sures. (Workgroup of the Academy of Macroeconomic Re- tabases in the context of integrated assessment modelling. Environmental search of the State Development Planning Commission, 1999b). Modelling Software 20, 1189e1193. Chen, W.Y., 2005. The costs of mitigating carbon emissions in China: (1) Iron and steel industry. findings from China MARKAL-MACRO modeling. Energy Policy 33, 885e896. Christodoulakis, N.M., Kalyvitis, S.C., Lalas, D.P., Pesmajoglou, S., 2000. Energy efficiency can rise by 12%, from 46% in 1995 to Forecasting energy consumption and energy related CO2 emissions in 58% in 2010, a bit higher than that of industrialized coun- Greece: an evaluation of the consequences of the Community Support try in early 1970s. Framework II and natural gas penetration. Energy Economics 22, 395e422. (2) Materials industry. Clinch, J.P., Healy, J.D., King, C., 2001. Modelling improvements in domestic energy efficiency. Environmental Modelling Software 16, Energy use per unit output will decrease. Annually energy 87e106. Crompton, P., Wu, Y.R., 2005. Energy consumption in China: past trends and save rate will be 1.5%. Energy efficiency will increase by future directions. Energy Economics 27, 195e208. 10%, from 40% in 1995 to 50% in 2010. Cruz, Luis M.G., 2002. Energyeenvironmenteeconomy interactions: an inputeoutput approach applied to the Portuguese Case. Paper for the 7th (3) Building materials industry. Biennial Conference of the International Society for Ecological Econom- ics, ‘‘Environment and Development: Globalisation the Challenges Energy use per unit output will decrease. Annually for Local International Governance, ’’ Sousse (Tunisia), 6e9 March energy-saving rate will be 1.4%. Energy efficiency 2002.