on CO2 Emission Across Industries The Impact of Stricter Standards on CO2 Emission Across Industries School of Economics and Management Beihang University Dongwen Tian 2017.06.21

Introduction Methodology and data Results Conclusions

Introduction 1 The CO2 emissions with the increasing greenhouse effect is now the global concern China has become the largest CO2 emitter in the world, and has implemented many policies to control it The reduction of the emissions will inevitably influence the growth of GDP However, Chinese government is making its effort to control the emissions

1 Introduction Policies implemented in China The 11th five-year plan (2006) to improve the production and consumption structure and build a stable, economic, clean and safe energy supply system China’s national programme to address climate change (2007) Clarified the specific objectives, principles, key industries and actions to cope with the climate change China’s policies and actions for addressing climate change (each year since 2008) Introduced various methods to control the emissions across industries The 12th five-year plan (2011) To control the emissions and establish the low-carbon product standards

Methodology and data 2 IOA (input-output analysis): to estimate the emissions across 17 manufacturing industries in China (2000-2014) Direct Carbon Emissions Coefficient The emissions of various types of energy (including coal, coke, crude oil, gasoline, diesel, kerosene, fuel oil, natural gas) are calculated based on the equation provided by IPCC:

2 Methodology and data net calorific value China Energy Statistical Yearbook CO2 emission factor 2006 IPCC Guidelines for National Greenhouse Gas Inventories Direct Carbon Emissions Coefficient kg(CO2)/kg(energy) Coal Coke Crude oil Gasoline Kerosene Diesel Fuel oil Natural gas 2.055 3.043 3.065 2.985 3.088 3.161 3.2 37 1.996

2 Method and data The direct carbon emission of an industry: the emission factor the consumption of different types of energy of an industry Collect the output data of selected industries from World Input- Output Table from WIOD With the carbon emission and output data, get the direct carbon emission coefficient, reflecting the emission per unit output

2 Methodology and data Complete Emission Coefficient get the following equation from the IO model: (1) (2) (3) the output of an economy the direct consuming coefficient matrix the direct carbon emission coefficient the complete consuming coefficient matrix the complete emission coefficient

2 Methodology and data Data: consumption of various types of energy: China Energy Statistical Yearbook input-output data: WIOD trade data: UNComtrade Observation Duration: 2000-2014

Methodology and data 2 Addressing industry classification differences across divergent datasets China Energy Statistical Yearbook before and after 2011: make adjustments to get a unique classification Input-Output table - China Energy Statistical Yearbook: make adjustments The classification got above - SITC Rev.3: correspondence by Sheng Bin (2002)

2 Methodology and data The results are not unique Adopt the decomposition by Erick Dietzenbacher and Bart Los (1998) The change of the emissions can be represented as: or:

2 Methodology and data The 4 effects: direct carbon emission technique effect input-output technique effect scale effect composition effect

Results 3 Analyze the embodied CO2 emissions in export of 17 manufacturing industries Divide the change into 4 parts (SDA methods) To report the results clearer, take 6 industries for example

Fig1 The Embodied CO2 Emission (2000-2014) Results 3 Fig1 The Embodied CO2 Emission (2000-2014)

Fig2 The Direct Carbon Emission Technique Effect Results 3 Fig2 The Direct Carbon Emission Technique Effect

The Impact of Policy on Direct Carbon Emission Technique Effect Unit: Mt Industries 2007 2011 Manufacture of Electrical Machinery and Apparatus -39.0084 -18.7347 Manufacture of Textile, Wearing, Leather and Related Products -37.4590 -7.32803 Manufacture of Computers, Communication and Other Electronic Equipment -32.4861 -7.27106 Manufacture of Basic Metal -26.9742 -8.0618 Manufacture of Furniture and other Manufacture -25.8066 -8.06132 Other Manufacture of Machinery -23.2055 -8.82455 Manufacture of Raw Chemical Materials and Chemical Products -19.7342 -2.48799 Manufacture of Metal Products -16.1244 -5.49650 Manufacture of Transport Equipment -13.0731 -6.39260 Manufacture of Rubber and Plastics Products -8.45348 -1.98868 Manufacture of Non-metallic Mineral Products -5.22916 -1.84048 Manufacture of Foods, Beverages and Tobacco -3.24017 -0.55965 Processing of Petroleum, Coking and Processing of Nuclear Fuel -2.26023 -1.47626 Manufacture of Paper and Paper Products -1.68533 -0.61271 Processing of Timber, Manufacture of Wood, Bamboo, Rattan, Palm, and Straw Products -1.34080 -0.16083 Manufacture of Medicines -1.01297 -0.07882 Printing and Reproduction of Recording Media -0.49432 -0.38504

Fig3 The Input-Output Technique Effect Results 3 Fig3 The Input-Output Technique Effect

The Impact of Policy on Input-Output Technique Effect Unit:Mt Industries The impact in 2006 Manufacture of Computers, Communication and Other Electronic Equipment -50.16908429 Manufacture of Textile, Wearing, Leather and Related Products -16.52394149 Manufacture of machinery and equipment n.e.c. -13.35607896 Manufacture of Electrical Machinery and Apparatus -13.20908489 Manufacture of Transport Equipment -7.741291194 Manufacture of Furniture and other Manufacture -6.136039361 Manufacture of Metal Products -4.892446087 Manufacture of Non-metallic Mineral Products -4.192773484 Manufacture of Rubber and Plastics Products -3.123142541 Manufacture of Basic Metal -2.859727388 Manufacture of Raw Chemical Materials and Chemical Products -2.453539618 Manufacture of Foods, Beverages and Tobacco -1.439742958 Manufacture of Paper and Paper Products -1.126969622 Processing of Timber, Manufacture of Wood, Bamboo, Rattan, Palm, and Straw Products -1.024964910 Manufacture of Medicines -0.650035547 Printing and Reproduction of Recording Media -0.484915074 Processing of Petroleum, Coking and Processing of Nuclear Fuel -0.362959975

Results 3 Fig4 The Scale Effect

Results 3 No common tendency in composition effect across industries: the proportion of some industries increased, while that of others decreased Obtain total composition effect across 17 manufacturing industries to find the influences

Fig5 The Composition Effect Results 3 Fig5 The Composition Effect

complete emission coefficient(kg/$US) Industries complete emission coefficient(kg/$US) composition in 2008 composition in 2009 Manufacture of Foods,Beverages and Tobacco 0.822991464 2.20% 2.48% Manufacture of Computers, Communication and Other Electronic Equipment 1.071265843 20.24% 22.04% Manufacture of Furniture and other Manufacture 1.168669010 13.54% 14.00% Manufacture of Medicines 1.196966938 0.58% 0.73% Processing of Timber,Manufacture of Wood,Bamboo,Rattan,Palm,and Straw Products 1.199181778 0.57% Manufacture of Textile,Wearing,Leather and Related Products 1.261232709 16.43% 17.67% Printing and Reproduction of Recording Media 1.573029054 0.21% 0.23% Manufacture of Transport Equipment 1.736641502 4.92% 4.99% Manufacture of Paper and Paper Products 1.813952340 0.53% 0.62% Processing of Petroleum, Coking and Processing of Nuclear Fuel 1.849853737 1.53% 1.17% Other Manufacture of Machinery 1.898443523 8.49% 8.27% Manufacture of Rubber and Plastics Products 2.101171691 2.28% 2.44% Manufacture of Electrical Machinery and Apparatus 2.108339425 11.49% 11.96% Manufacture of Non-metallic Mineral Products 2.290608398 1.72% 1.85% Manufacture of Metal Products 2.567848774 4.05% 3.74% Manufacture of Basic Metal 2.607778583 6.43% 3.02% Manufacture of Raw Chemical Materials and Chemical Products 2.667433121 4.79% 4.23%

Results 3 The financial crisis at the end of 2008 and its impact reflected clearly in 2009 The export composition was improved in 2009, and the emissions was reduced by the effect To make more comprehensive, sum the proportion of 9 industries with lower complete emission effect in 2009, find it increased from 59.21% to 63.33% while the proportion of the other 8 industries with higher coefficients declined from 40.79% to 36.67%

Conclusions 4 Decomposing the change of trade embodied CO2 emissions in into 4 parts, conclude: The 11th five-year plan made firms to employ low-carbon input to reduce the emissions The 12th five-year plan forced firms to reduce emissions by using more cleaner energy and upgrading techniques Firms with low technique were forced to exit the market However, the impacts of policies were different across industries Although financial crisis did do harm to the economy, it seemed to have reduced the emissions by improving export composition

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