Springer Theses

Recognizing Outstanding Ph.D. Research

Zhu Liu

Carbon Emissions
in China
Springer Theses

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Zhu Liu

Carbon Emissions in China

Doctoral Thesis accepted by
Chinese Academy of Sciences, China

123
Author Supervisor
Dr. Zhu Liu Prof. Dabo Guan
Sustainability Science Program School of International Development
Harvard University University of East Anglia
Cambridge, MA Norwich
USA UK

ISSN 2190-5053 ISSN 2190-5061 (electronic)

Springer Theses
ISBN 978-3-662-52862-4 ISBN 978-3-662-52864-8 (eBook)
DOI 10.1007/978-3-662-52864-8

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Supervisor’s Foreword

By co-supervising Dr. Zhu Liu’s Ph.D. Thesis, I’m pleased to introduce the
influential and significant work by Dr. Zhu Liu. Dr. Zhu Liu contacted his doctor
degree at the Chinese Academy of Sciences in 2009–2014 with the thesis topic of
“Carbon emissions in China”. Mitigating the human induced carbon emission is one
of the most challenging issues facing mankind sustainable development. Dr. Zhu
Liu’s research about carbon emissions could have global impact on the carbon cycle
of the earth system, climate change mitigation and human development.
In his Ph.D. Thesis, Dr. Zhu Liu conducted an analysis based on 4243 coal
mines investigations and 602 site experiments to comprehensively test the carbon
emissions from coal combustion in China. For the first time the “Measurable,
reportable, verifiable” carbon emission factors and total carbon emission inventories
are reported for nation, provinces, cities and individual sectors. Dr. Zhu Liu ana-
lyzed the feature, pattern and driving forces of China’s carbon emissions. Results
show that China’s carbon emissions are mainly the result of fossil fuel combustion
(90 %) and cement production (10 %). Manufacturing and power generation are the
major sectors contributing to total carbon emissions, together these sectors
accounted for 85 % of China’s total carbon emissions. The results also uncovered
significant differences in sectoral emission intensity among provinces, implying a
huge disparity of technology level among regions. His study further explored
China’s emission embodied in international trade: the carbon footprints. By ana-
lyzing the carbon footprints by nations, Chinese trade represents 34 % of all
emissions embodied in trade, and these traded emissions are growing each year.
About twenty-five percent of China’s carbon footprints are caused by manufac-
turing products that are consumed abroad. These results provide a basic under-
standing of China’s carbon emissions and further propose a basis to support global
mitigation efforts and low-carbon development.

v
vi Supervisor’s Foreword

Dr. Zhu Liu showed great insight, enthusiasm and critical thinking abilities
during his Ph.D. study. He is always trying to find new approaches for his research.
His strong quantitative background but openness to other approaches and his
proven ability to publish in the top journals are clearly his most outstanding
strengths, and demonstrate himself in establishing himself in academic field.

Sincerely yours

Dabo Guan
June 2016 Professor of Climate Change Economics
Norwich, UK
Abstract

Anthropogenic climate change driven by human induced carbon emissions, is one

of the most serious challenges facing human development. China is currently the
world largest developing country, top primary energy consumer and carbon emitter.
The nation releases one quarter of the global total (9.2 Gt CO2 in 2013), 1.5 times
that from US. Nearly three-quarters (73 %) of the growth in global carbon emission
between 2010 and 2012 occurred in China. Without mitigation, China’s emissions
could rise by more than 50 % in the next 15 years. Given the magnitude and growth
rate of China’s carbon emissions, the country has become a critical partner in
developing policy approaches to reducing global CO2 emissions.
Supported by a 5-year joint research programme among more than 100 research
institutes globally to investigate carbon emissions in China (Jiao and Stone, 2011),
this study presents a systematically evaluation of China’s carbon emission from
fossil fuel combustion and cement manufacturing process. The main contributions
of the study are listed as:
(1) This study was conducted with 4243 mine investigation and 602 site experi-
ments to comprehensively test the qualities of different fuels in China. For the
first time the “Measurable, reportable, verifiable” carbon emission factors and
total carbon emission inventories are reported for nation, provinces, cities and
invidual sectors.
(2) The feature, pattern and driving forces of China’s carbon emissions are ana-
lyzied. Results show that China’s carbon emissions are mainly the result of
fossil fuel combustion (90 %) and cement production (10 %). Manufacturing
and power generation are the major sectors contributing to total carbon
emissions, together these sectors accounted for 85 % of China’s total carbon
emissions. The results also uncovered significant differences of sectoral
emission intensity among provinces, implying a huge disparity of technology
level among regions. Less developed provinces with much higher energy
intensive technologies, contribute to most of national emission increment since
2000s and cause the whole country’s economic structure to become carbon
intensive.

vii
viii Abstract

(3) The study explored China’s emission embodied in international trade: the
carbon footprints. By analyzing the carbon footprints by nations, Chinese
trade represents 34 % of all emissions embodied in trade, and these traded
emissions are growing each year. About twenty-five percent of China’s carbon
footprints are caused by manufacturing products that are consumed abroad.
These, so-called virtual emissions, which are “embodied” in international
trade, lead to China having the world’s most unbalanced virtual emissions
trade with its emissions associated to exports being eight times higher than its
emissions associated with imports.
This study provides basic understanding of China’s carbon emissions and further
proposes a basis to support global mitigation efforts and low-carbon development.

Keywords Sustainability
China
Climate change
Carbon Emissions
Carbon

footprint
Parts of this thesis have been published in the following journal articles:

Zhu Liu, Dabo Guan, Douglas Crawford-Brown, Qiang Zhang, Kebin He, Jianguo
Liu. Energy policy: A low-carbon road map for China. Nature 500, 143–145
(2013).
Zhu Liu, Dabo Guan, Scott Moore, Henry Lee, Jun Su, Qiang Zhang. Climate
policy: Steps to China’s carbon peak. Nature 522, 279–281 (2015).
Zhu Liu. Dabo Guan, Wei Wei, Steven J. Davis, Philippe Ciais, Jin Bai, Shushi
Peng, Qiang Zhang, Klaus Hubacek, Gregg Marland, Robert Andres, Douglas
Crawford-Brown, Jintai Lin, Hongyan Zhao, Chaopeng Hong, Tom Boden,
Kuishuang Feng, Glen Peters, Fengming Xi, Junguo Liu, Yuan Li, Yu Zhao, Ning
Zeng, and Kebin He. Reduced carbon emission estimates from fossil fuel com-
bustion and cement production in China. Nature 524, 335–338 (2015).
Zhu Liu, Steven J. Davis, Kuishuang Feng, Klaus Hubacek, Sai Liang, Laura Diaz
Anadon, Bin Chen, Jingru Liu, Jinyue Yan and Dabo Guan. Targeted opportunities
to address the climate–trade dilemma in China. Targeted opportunities to address
the climate-trade dilemma in China. Nature Climate Change 6, 201-206 (2015).
Zhu Liu, Soeren Linder, Yong Geng, Bing Xue, Fengming Xi, Ying Pan, TianZhu
Zhang, Tsuyoshi Fujita. Features, trajectories and driving forces for energy-related
GHG emissions from Chinese mega cites: The case of Beijing, Tianjin, Shanghai
and Chongqing. Energy 37, 245–254 (2012).
Zhu Liu, Yong Geng, Soeren Linder, Dabo Guan. Uncovering China’s greenhouse
gas emission from regional and sectoral perspectives. Energy 45, 1059–1068
(2012).
Zhu Liu, Yong Geng, Soeren Linder, Hongyan Zhao, Tsuyoshi Fujita, Dabo Guan.
Embodied energy use in China’s industrial sectors. Energy Policy 49, 751–758
(2012).
Dabo Guan, Zhu Liu, Yong Geng, Soeren Lindner, Klaus Hubacek. The gigatonne
gap in China’s carbon dioxide inventories. Nature Climate Change, 672–675
(2012).
Kuishuang Feng, Steven J Davis, Xin Li, Dabo Guan, Laixiang Sun, Weidong Liu,
Zhu Liu, Klaus Hubacek. Outsourcing CO2 within China. Proceedings of the
National Academy of Sciences of the United States of America (PNAS) 110,
11654–11659 (2013).

ix
Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Scientific Background of Climate Change. . . . . . . . . . . . . . . . . . 1
1.2 International Efforts on Climate Change Mitigation . . . . . . . . . . . 2
1.3 Energy Consumption and Carbon Emission in China . . . . . . . . . . 4
1.4 China’s National Strategy on Climate Change Mitigation . . . . . . . 6
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2 China’s National, Regional, and City’s Carbon Emission
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 13
2.1 Methodology for Emission Accounting. . . . . . . . . . . . . . . ..... 13
2.1.1 Calculation of Carbon Emissions from Fossil Fuel
Combustion . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 13
2.1.2 Calculation of Carbon Emission from Cement
Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 14
2.1.3 Calculation of Carbon Emission from Industrial
Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.2 Emission Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3 China’s National Carbon Emission Inventories . . . . . . . . . . . . . . 23
2.3.1 Carbon Emission from Energy Combustion . . . . . . . . . . . 23
2.3.2 Carbon Emission from Cement Production Process . . . . . . 24
2.3.3 Emission from Industrial Process. . . . . . . . . . . . . . . . . . . 25
2.4 China’s Provincial Carbon Emission Inventories . . . . . . . . . . . . . 27
2.4.1 Methods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.4.2 Carbon Emissions from 30 Provinces in 1995–2010 . . . . . 28
2.5 Difference of China’s Carbon Emission Estimates Between
National and Provincial Statistics. . . . . . . . . . . . . . . . . . . ..... 31
2.6 City’s Carbon Emission Inventories . . . . . . . . . . . . . . . . . ..... 34
2.6.1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 34
2.6.2 Carbon Emissions in Chinese Megacities: Case
Study in Beijing, Tianjin, Shanghai, and Chongqing ..... 35
2.6.3 Carbon Emissions from 150 Chinese Cities . . . . . . ..... 40

xi
xii Contents

2.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3 Carbon Emissions from Regions and Sectors . . . . . . . . . . . . . . . . . 45
3.1 Characteristics of China’s Regional Carbon Emissions . . . . . . . . . 45
3.2 The Spatial Autocorrelation of China’s Carbon Emissions . . . . . . 48
3.2.1 Methodology—Spatial Autocorrelation. . . . . . . . . . . . . . . 50
3.2.2 Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.3 Carbon Emissions from Sectors . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.3.1 Carbon Intensity for Sectors . . . . . . . . . . . . . . . . . . . . . . 55
3.4 The Embodied Energy Consumption and Carbon Emissions
from China’s Industrial Sectors . . . . . . . . . . . . . . . . . . . . . .... 61
3.4.1 Methodology—Environmental Extend Input–Output
Model (EIO). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 61
3.4.2 Results of Embodied Energy Consumption . . . . . . . . .... 63
3.4.3 Discussion and Policy Implications of Embodied
Energy Consumption . . . . . . . . . . . . . . . . . . . . . . . .... 68
3.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 71
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 72
4 Driving Factors of China’s Carbon Emissions . . . . . . . . . . . . . . . . . 75
4.1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
4.2 Driving Factors of Carbon Emission from 1997 to 2009. . . . . . . . 77
4.3 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
5 Carbon Emissions Embodied in Trade . . . . . . . . . . . . . . . . . ..... 85
5.1 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 85
5.1.1 Estimates of Sectoral Level Imported and Exported
CO2 Emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
5.1.2 Emissions and Trade Data . . . . . . . . . . . . . . . . . . . . . . . 87
5.2 Carbon Emissions Embodied in Domestic Trade . . . . . . . . . . . . . 88
5.3 Carbon Emissions Embodied in International Trade . . . . . . . . . . . 88
5.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
6 Policy Implications for China’s Low-Carbon Development . . . . . . . 99
6.1 Disaggregate National Targets into Regions . . . . . . . . . . . . . . . . 99
6.2 Low-Carbon Technology Revolution . . . . . . . . . . . . . . . . . . . . . 100
6.3 Expand Carbon Trading Nationwide . . . . . . . . . . . . . . . . . . . . . 101
Chapter 1
Introduction

1.1 Scientific Background of Climate Change

Climate change has profound impacts on human survival and development and is
considered as the major challenge for sustainable human development. Since the
industrial era, the burning of fossil fuels produces considerable greenhouse gas
(GHG) emissions into the atmosphere and becomes the major driver of anthro-
pogenic climate change [1]. Human activity, especially the carbon emissions from
burning of fossil energy (9.1 billion tons of carbon/year), is the major greenhouse
gas emissions [2]. A total of 90–98 % components of the fossil energy (coal, oil,
gas, etc.) is carbon, which could be oxidized into carbon dioxide during the
combustion process, and nitrous oxide (N2O) and methane (CH4), which are also
main GHGs that highly related with energy consumption. Nitrous oxide (N2O)
emissions are also mainly from burning fossil fuels. Sources of methane emissions
include fossil fuel combustion, waste treatment, and agricultural activities. Other
GHGs, such as fluorides, are mainly from chemical production processes. The
effects of global warming (global warming potential, GWP) from different green-
house gases are indicated by the equivalent effect of the carbon dioxide in
100-years. United Nations Framework Convention on Climate Change (UNFCCC)
reported that the carbon dioxide released (CO2), methane (CH4), and nitrous oxide
(N2O) has GWP equivalents of 1.25 and 310, respectively [1, 3]. In total, carbon
dioxide (CO2) accounts for 63 % of total GWP among all GHGs, methane (CH4)
accounts for about 18 %, nitrous oxide (N2O) accounts for about 6 %, other GHGs,
including sulfur hexafluoride, hydrofluorocarbons, and perfluorocarbons together
account for about 13 % of the GWP from all GHGs [1, 3].
Since the industrial era, carbon emissions from energy consumption has com-
pletely changed the global carbon cycle, which is one of the basic patterns of
geochemical cycles [4]. Global carbon cycle operates on the basis of budgets
among the carbon sources and sinks. In addition to burning fossil fuels, the
human-induced land changes also contribute 10 million tons of carbon emissions

© Springer-Verlag Berlin Heidelberg 2016 1

Z. Liu, Carbon Emissions in China, Springer Theses,
DOI 10.1007/978-3-662-52864-8_1
2 1 Introduction

per year. The terrestrial forest system and the ocean are the most important carbon
sinks that uptake 2.5 billion tons and 2.3 billion tons of carbon from atmosphere
every year, respectively [5, 6]. The remaining 4.1 billion tons of carbon in the form
of carbon dioxide remain in the atmosphere, driven the change of the dynamic earth
system.
It was reported by Keeling et al. that there was a correlation between human-
induced carbon emission from energy consumption and the amount of carbon
dioxide in the atmosphere [7, 8]. On the timescale of millennium or longer, this
correlation appears to be strictly linear [9]. According to inversion of historical data,
satellite meteorological observation [10, 11], model analogy [12], and other related
data [13–16], anthropogenic carbon emission has far-reaching influences on the
global ecosystem, chemical cycles, energy balance, and even the patterns of
international politics.
The influences on natural system include the following: droughts, floods, hur-
ricanes, and other extreme weather [17, 18]; glacier melting [19] and sea level rise
[20]; loss of biological habitats and desertification [21, 22]; loss of biodiversity
[23]. Such impacts could be dangerous and harmful for human society, for example,
the deterioration of ecosystem may result in regional water shortage [24, 25] and
could cause fights between nations contending for water resources.
The climate change effects are introducing threats to the well-being of the global
ecosystem and the entire human race. To analyze the current situation and provide
strategic solutions, it is urgent needed to understand the carbon emissions from
human activity, which is also the key to human’s sustainable development.

1.2 International Efforts on Climate Change Mitigation

Fighting against the severe consequences caused by fossil fuel shortage and climate
change, international societies take measures to control fossil fuel consumption and
related carbon emissions and to seek low-carbon developmental path. In practice,
the development of low-carbon energy such as nuclear power, wind power, solar
power, and biomass energy has been listed as national developmental strategy in
many countries all around the world. For example, China’s nuclear power reached
40 million kilowatt before 2015 [26], and the consumption of renewable energy in
USA is required to increase to 0.1 billion tons per year according to the American
Clean Energy and Security Act.
Combating climate change requires the collaboration between nations. The
Intergovernmental Panel on Climate Change (IPCC) was established collabora-
tively by World Meteorological Organization (WMO) and United Nations
Environment Program, responsible for studying the influence and inhibition prac-
tices of climate change. In 1992, The United Nations Framework Convention on
Climate Change (UNFCCC) was established to maintain a stable amount of
1.2 International Efforts on Climate Change Mitigation 3

greenhouse gases in the atmosphere, to prevent the climate system from deleterious
anthropogenic interference, and to ensure the adaptation of ecosystem to natural
climate change, the normal production of crops, and the sustainable development of
economy [27, 28].
The Kyoto Protocol that was signed in 1997 and came into effect in 2005
stipulated the principle of “common but differentiated responsibilities” among
contracting parties, and formulated the emission reduction targets under this prin-
ciple [27, 29]. This was the first time that greenhouse gas emission reduction had
been statutorily required. The requirement of GHG emission reduction was
mandatory for 39 developed countries (Annex I Countries), while it was voluntary
for developing countries (Non-Annex I Countries). The Kyoto Protocol also for-
mulated an emission reduction mechanism based on marketing measures, including
Clean Development Mechanism and a series of other treaties, which allows the
transfer and obtain of carbon offsets on protect level between developed and
developing countries. This mechanism has stimulated the establishment of a global
carbon trading market. Under Kyoto Protocol, the Annex I Countries has reduced
650 million tons of carbon dioxide since 1990 [30].
In 2007, the participating nations of the 2007 United Nations Climate Change
Conference adopted the “Bali Road Map,” which required the developed countries
to reduce GHG emission by 25–40 % by 2020. In 2008, Group of Eight
(G8 countries) consented on the long-term target to cut 50 % of GHG emission by
2050. In 2012, the contracting parties of Kyoto Protocol agreed to execute the
Second Commitment Period from 2013.
However, many countries, especially the developed ones, were divided on the
stipulated responsibilities and obligations in Kyoto Protocol and its subsequent
treaties because of the enormous amount of economic and social costs incurred by
mitigation actions. For example, the USA did not carry out Kyoto Protocol in spite
of the fact that it is the major carbon emission sources in the globe. Canada, Japan,
New Zealand, and Russia would not participate in the Second Commitment Period.
Therefore, the voluntary, scientific, and efficient carbon reduction by developing
countries such as China and India under UNFCCC and Kyoto Protocol has become
the inevitable choice of global sustainable development.
In the 2015 United Nations Climate Change Conference, the conference nego-
tiated the <Paris Agreement>, a global agreement on the reduction of climate
change with the text of which represented a consensus of the representatives of the
196 parties attending it. The Paris Agreement will serve as a foundation for all
nations to limit global temperature rise to well below 2 °C, with an aspiration to
reach 1.5 °C, and to adapt to climate change impacts already unfolding. This is the
first time that international society committing for the first time to a universal
agreement to cut greenhouse gas emissions and to avoid the most dangerous effects
of climate changes.
4 1 Introduction

1.3 Energy Consumption and Carbon Emission in China

(1) The gigantic energy consumption and carbon emissions

China is the largest developing country in the world, also with the largest amount of
population. China’s energy consumption and carbon emission have been accelerat-
ing, under the influence of rapid urbanization and industrialization. In 2010, China’s
GDP has overtaken that of Japan and ranked second in the world. However, China
has become the largest carbon emitter in 2007, surpassing the USA, and the largest
consumer of fossil fuels in 2011. Carbon emission in China has reached approxi-
mately 9 billion by 2011, 23 % of the total emission in the world, while the con-
sumption of primary energy in China represented 25 % of the globe. China’s carbon
emissions from fossil fuel burning and cement production reached 8.50 Gt CO2 in
2012. China’s carbon emissions were only 5.46 Mt CO2 in 1950; thus, the total
emissions increased more than 100-folds during those 60 years. Such a growth rate
was the highest among the world’s major economies. In 2007, China’s carbon
emissions surpassed that of the USA; in 2012, China’s carbon emissions were almost
equivalent to the carbon emissions from both the USA and the EU combined
(Fig. 1.1).
(2) Rapid growth in China
There has been a dramatic increase in China’s energy consumption and carbon
emission during 1990 and 2010. Between 2000 and 2007, the increase in carbon
emission of China has represented more than a half of that of the world. During the

7
USA
6 EU-27
France
5
Gt CO2

Germany
4 UK
Japan
3 Russian Federation
China
2
India
1

0
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012

Fig. 1.1 Total CO2 emissions of major emitters in 1970–2012. China’s data on carbon emissions
was calculated by the author, the emissions data of the other countries was sourced from the
international datasets of CDIAC [31] and EDGAR [32]
1.3 Energy Consumption and Carbon Emission in China 5

time period of 2008 and 2010, the figure has reached over 80 %. During
2005–2011, China increased thermal power generation (by 90 %), steel (94 %),
cement (96 %), and vehicle production (223 %), at growth rates exceeding that of
GDP (87 %). China also initiated a 4 trillion Yuan ($586 billion) economic stim-
ulus plan after 2008, of which about 85 % was to be used for infrastructure. Today,
China accounts for a huge chunk of the world production of crude steel (45 %),
cement (60 %), primary aluminum (44 %), coke (64 %), and coal (50 %) [33].
The energy and emission targets that are expressed as ratios of GDP and total
emissions do not reduce overall emissions. Moreover, merely rely on rapid expand
of production capacity, China could meet its mitigation targets with little devel-
opment of advanced technology. Much of China’s improved energy efficiency has
come from a bit upgrading equipment and industrial processes but also significantly
larger-scale production capacity. During 2002–2009, the efficiency of China’s
coal-fired power plants improved by 10 %, while their production more than
doubled [33].
Without mitigation measures, projections show, China’s emissions will continue
to rise by around 3 % per year to 2030. Curbing this growth will entail an emissions
reduction between 2015 and 2035 of 30 Gt CO2 (when comparing with BAU
scenario peak at 18 Gt CO2 by 2035), equivalent to all the world’s emissions in
2013 (Fig. 1.2). This is in reach if China follows a best practice low-carbon
pathway—keeping the annual emission growth below 2 %, rolling out a national
carbon trade system and obtaining 30 % of its energy from renewable sources by
around 2035. China’s per capita emissions in 2030 would then mirror those of the
EU in 2013 (less than 8 t CO2/person).

20 BAU Scenario ranges

Low-carbon scenario ranges
18

BAU
16
Average low carbon scenario
14 Best practice low-carbon scenario
Historial emission
Gt CO2

12

10

4
2005 2010 2015 2020 2025 2030 2035

Fig. 1.2 China’s carbon emission projections, data source from [34], copyright reserved
6 1 Introduction

(3) The fossil-based energy supply system

Fossil fuels, especially coal, play a dominant role in China’s energy consumption
structure. Fossil fuel represented 90 % of China’s energy supply, and 70 % of it
came from coal [35]. In the major industrial processes, China has a lower technical
efficiency per product [36], and a higher energy consumption per output [37].
Current energy structure and future economic development determine that
China’s carbon emission will keep in a high level in the long run. In addition, the
cost incurred by adjusting China’s energy supply system and industrial structure
will be far more than those technologically matured developed countries, with
comparatively low-carbon energy mix. Because of the rocketing increase in carbon
emission, China’s emission per capita is gradually approaching the figure for
Western developed countries [31]. Systematic analysis and research into China’s
energy-related carbon emission are the key for China’s to actively combat climate
change and develop a low-carbon economy.

1.4 China’s National Strategy on Climate Change

Mitigation

The Chinese government has actively participated in combating climate change and
set energy conservation and emission reduction as fundamental national strategies.
From national perspective, the Ministry of Science and Technology and 5 other
ministers have collaboratively promulgated the <National Assessment Report of
Climate Change> in 2006. In 2007, the government released <China’s Policies and
Actions for Addressing Climate Change>. China officially announced the national
target would be to achieve a 45 % reduction of carbon intensity (Carbon emission
per unit of GDP) by 2020 (against 2005 level); such a national target has been
allocated into provinces and implemented through “top-down” administrative
measures (Table 1.1). “Top-down” command and control policies are the major
approach that China is using to meet its energy saving and emissions reduction
goals. In its 11th 5-Year Plan (2006–2010), the government set goals that would cut
energy intensity (energy in heat per unit of GDP) by 20 % and cut total SO2
emissions by 10 %. The following 12th 5-Year Plan (2011–2015) called for a 16 %
reduction in energy intensity and a 17 % reduction in carbon intensity with
mandatory subtargets allocated into regions. The 12th 5-Year Plan further allocated
the targets into provinces, with the Eastern coastal regions being allocated more
rigorous goals for intensity reduction. To meet the intensity reduction target in the
11th 5-Year Plan (2006–2010), both central and local governments closed thou-
sands of inefficient power plants and factories. Regionally, provinces, cities, and
districts have implemented several sustainable developing and construction projects
based on the principle of “low-carbon” strategy. In 2010, the National Development
and Reform Commission piloted 11 provinces and cities as “low-carbon pilot
1.4 China’s National Strategy on Climate Change Mitigation 7

Table 1.1 Regional energy intensity targets and achievements in the 11th and 12th 5-Year Plans
(2006–2015)
Region Province Energy Energy intensity Energy Energy
intensity goal goal achievement intensity in intensity goal
(2006–2010) (2006–2010) (%) 2010 (2011–2015)
(%) (ton/104 RMB) (%)
North China Beijing −20 −26.59 0.582 −17
Tianjin −20 −21.00 0.826 −18
Hebei −20 −20.11 1.583 −17
Shanxi −22 −20.66 2.235 −16
Inner −22 −22.62 1.915 −15
Mongolia
Northeastern Liaoning −20 −20.01 1.38 −17
China Jilin −22 −22.04 1.145 −16
Heilongjiang −20 −20.79 1.156 −16
Eastern China Shanghai −20 −20.00 0.712 −18
Jiangsu −20 −20.45 0.734 −18
Zhejiang −20 −20.01 0.717 −18
Anhui −20 −20.36 0.969 −16
Fujian −16 −16.45 0.783 −16
Jiangxi −20 −20.04 0.845 −16
Shandong −22 −22.09 1.025 −17
Central and Henan −20 −20.12 1.115 −16
South China Hubei −20 −21.67 1.183 −16
Hunan −20 −20.43 1.17 −16
Guangdong −16 −16.42 0.664 −18
Guangxi −15 −15.22 1.036 −15
Hainan −12 −12.14 0.808 −10
Southwestern Chongqing −20 −20.95 1.127 −16
China Sichuan −20 −20.31 1.275 −16
Guizhou −20 −20.06 2.248 −15
Yunnan −17 −17.41 1.438 −15
Northwestern Tibet −12 −12.00 1.276 −10
China Shanxi −20 −20.25 1.129 −16
Gansu −20 −20.26 1.801 −15
Qinghai −17 −17.04 2.55 −10
Ningxia −20 −20.09 3.308 −15
Source National Development and Reform Commission (NDRC) [40]

regions”. For the mitigation activities for companies, China has phased out a great
number of small-scale coal-fired power stations and coal mines, which most of them
are low efficiency and with high pollutions. The effect of emission reduction during
the 11th 5-Year Plan period equaled saving 0.75 billion tons of coal and a reduction
of 1.5 billion tons (5 % of the whole world total emissions) of carbon dioxide.
8 1 Introduction

A series of actions and policies from the government and enterprises have revealed
considerable contributions made by China in controlling carbon emission and
tackling global climate change.
It should also be noted that the Chinese emissions reduction target is based on a
relative intensity (emission per unit of GDP) target, not an absolute target. With the
rapid economic development and growth in China, a relative reduction (ratio-based
indicators) may not necessarily mean a net reduction of CO2 emissions. A relative
improvement may result in a net emissions increase if one country’s annual eco-
nomic growth rate exceeds a certain level. The evaluation of such a relative indi-
cator also depends on which types of GDP (or other units) are used for the
calculation. For example, constant price GDP or purchasing power parity
(PPP) may provide variations in results because constant price GDP is likely to
appear lower than PPP for developing countries. The difference in improvement
level becomes larger in both absolute and relative terms when such an indicator is
calculated on the basis of GDP. Thus, peaking China’s total emission will be the
key step for China’s carbon emission mitigation.
In 2014, China has committed to peaking its total CO2 emissions by 2030, under
the November 2014 “US–China Joint Announcement on Climate Change and Clean
Energy Cooperation” [38]. As a first step, China has addressed the cap of total coal
consumption by 4 Gt per year and plans to increase the share of renewable energy
by 20 % by 2030. Further integrated effort is needed to help China meet and

105

12 Five year plan for

Intensity growth rate, previous year =100

energy conservation
100

95

90

State-owned enterprise reform Four trillion RMB investment on

85 infrastructure construction

80
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

Fig. 1.3 Growth rate of carbon emissions intensity during 1995–2011 (value of previous year has
indexed into 100). Source [39], copyright reserved
1.4 China’s National Strategy on Climate Change Mitigation 9

Fig. 1.4 Location of China’s provinces

perhaps surpass this goal—an effort that would likely require market-based
instruments, technology innovation, energy structure optimization, recycling, as
well as international cooperation (Figs. 1.3 and 1.4).

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Chapter 2
China’s National, Regional, and City’s
Carbon Emission Inventories

Consistent, comprehensive, and accurate estimates of carbon emissions from fossil

fuel combustion and cement production are fundamental prerequisites to under-
standing the global carbon cycle and designing evidenced-based policies for
reducing carbon emissions. Uncertainty in estimates of carbon emissions from
fossil fuel combustion [1–6] arises from inconsistencies in data sources for both
activity data (e.g., the amount of fuel burnt or energy produced) and emission
factors (EFs, the amount of carbon oxidized per unit of fuel combusted, EF is the
product of the net heating value v, net carbon content c, percent carbon content Car,
and oxidization rate o).

2.1 Methodology for Emission Accounting

2.1.1 Calculation of Carbon Emissions from Fossil Fuel

Combustion

Carbon emissions are calculated by using activity data, which are expressed as the
amount of fossil fuels in physical units used during a production processes
(activity data clinker is the amount of clinker produced) multiplied by the respective
emission factor (EF).

Emission ¼ activity data  emission factor ðEFÞ ð2:1Þ

Emissions from cement manufacturing are estimated as:

Emissioncement ¼ activity data clinker  EFclinker ð2:2Þ

© Springer-Verlag Berlin Heidelberg 2016 13

Z. Liu, Carbon Emissions in China, Springer Theses,
DOI 10.1007/978-3-662-52864-8_2
14 2 China’s National, Regional, and City’s Carbon Emission Inventories

If data on sectorial and fuel-specific activity data and EF are available, total
emission can be calculated by:
XXX
Emission ¼ ðactivity datai;j;k  EFi;j;k Þ ð2:3Þ

where i is an index for fuel types, j for sectors, and k for technology type. Activity
data are measured in physical units (tons of fuel expressed as t fuel).
EF can be further separated into net heating value of each fuel v, the energy
obtained per unit of fuel (TJ per t fuel), carbon content c (t C TJ−1 fuel), and
oxidization rate o the fraction (in %) of fuel oxidized during combustion and
emitted to the atmosphere. The values of v, c, and o are specific for fuel type, sector,
and technology.
XXX
Emission ¼ ðactivity datai;j;k  vi;j;k  ci;j;k  oi;j;k Þ ð2:4Þ

For the coal extracted in China (e.g., for the 4,243 coal mines analyzed in this
study), net heating v and carbon content c values are not directly available, and a
more straightforward emission estimate for coal emissions can be obtained using
the mass carbon content (Car in t C per t fuel) of fuels defined by Car = c × v so
that the total emission can be calculated as:
XXX
Emission ¼ ðactivity datai;j;k  Car i;j;k  oi;j;k Þ ð2:5Þ

The activity data can be directly extracted as the final energy consumption from
energy statistics, or estimated based on the mass balance of energy, the so-called
apparent energy consumption estimation:

Apparent energy consumption ¼ domestic production þ imports  exports

ð2:6Þ
þ =  change in stocks  non energy use of fuels

2.1.2 Calculation of Carbon Emission from Cement

Production

The carbon emission from cement production is due to the production of clinker,
which is the major component of cement. When clinker is produced from raw
materials, the calcination process of calcium carbonate (CaCO3) and cement kiln
dust (CKD) releases CO2:

CaCO3 ! CaO þ CO2

2.1 Methodology for Emission Accounting 15

The amount of emission can be calculated from the molar masses of CaO
(55.68 g mole−1) and carbon (12 g mole−1) and the proportion of their masses in
clinker production. Furthermore, the emission associated with CKD that is not
recycled to the kiln is calculated using the CKD correction factor, CFcdk.
Carbon emission from cement production can be calculated by clinker emission
factor (EFclinker) and clinker production.

Emissioncement ¼ Activity dataclinker  EFclinker ð2:7Þ

EFclinker ¼ EF CaO  ð1 þ CFcdk Þ ð2:8Þ

EF CaOclinker ¼ Fraction CaO  ð12=55:68Þ = Fraction CaO  0:2155 ð2:9Þ

Fraction CaO is the mass proportion of CaO per unit clinker (in %).
EF CaOclinker is the mass of total carbon emission released as CaO per unit of
clinker (unit: t C per t clinker).
CFcdk is the CKD correction factor (in %).
EFclinker is the mass of total carbon emission per unit of clinker (t C per t clinker)
Clinker is the major component of cement. However, data on clinker production
are less widely reported than those of cement production. When the data of clinker
production are not available, the clinker-to-cement ratio “Rclinker-cement” (in %) can
be used for estimating the cement emission factor (EFcement) and further estimate
the emission based on cement production.

Rclinker-cement ¼ activity dataclinker =activity datacement ð2:10Þ

EFcement ¼ Rcement-clinker  EFclinker ð2:11Þ

Emissioncement ¼ EFcement  Mcement ð2:12Þ

The IPCC default Fraction CaO (clinker) is 64.6 %, and the Fraction CaO
(cement) is 63.5 %; thus, the IPCC default EFclinker is 0.1384 (t C per t clinker). In the
IPCC 1996 guideline, the clinker-to-cement ratio is 95 %, which assumes that most
cement is Portland cement and that the corresponding default EFcement is 0.1360
(t C per t clinker). In the IPCC 2006 guideline, the clinker-to-cement ratio is 75 %
when no direct clinker production data are available, and the corresponding default
EFcement is 0.1065 (t C per t clinker). In this study, the clinker-to-cement ratio is
calculated using clinker production statistics and cement production statistics.
It should be noted that the non-energy use of fossil fuels and other industrial
process such as ammonia production, lime production, and steel production will
also produce carbon emissions. To keep consistent with the scope of international
dataset we are comparing, those emissions are not included in this study. Based on
the previous study, the total emission of these non-energy fuel use and industry
processes was equivalent to 1.2 % of China’s emissions from fossil combustion in
2008 [6].
16 2 China’s National, Regional, and City’s Carbon Emission Inventories

2.1.3 Calculation of Carbon Emission from Industrial

Process

Carbon emissions from industrial production refer to the CO2 released from the
physical–chemical process of transforming raw materials into industrial products.
The fossil fuels used in this transformation stage are considered the carbon emis-
sions from fossil fuel combustion performed by the industrial sectors and are not
considered as the industrial process emissions. For example, emissions from the
calcination of calcium carbonate (CaCO3 → CaO + CO2) are considered industrial
process emissions. By contrast, emissions from fossil energy usage during the
calcination process are considered energy-related emissions.
According to the IPCC’s Guidelines for National Greenhouse Gas Inventories,
industrial process emissions result from several types of industrial production:
Mineral Industry (2A), Chemical Industry (2B), Metal Industry (2C), Non-energy
Products from Fuels and Solvent Use (2D), and Other Industry (2H). The detailed
classifications are provided in Table 2.1.
In this study, we calculated the emissions from 5 types of major industry pro-
duction processes. On the one hand, these emissions are not reported in existing
emission datasets; on the other hand, the openly accessible data sources can be
supported by the calculation.
The IPCC [2] suggested three basic methodologies to estimate industrial process
emissions. The Tier 1 approach, also known as the reference approach, is an
output-based approach that estimates emissions based on the production volume
and the default emission factors. The emissions factors refer to the emission
amounts per production unit, which amounts vary depending on the production
processes; the global average emission factors will be used in the Tier 1 approach,
and the emissions are estimated by the mass production amount and the mass of
emissions per production unit (global average value). The Tier 2 approach is also an
output-based approach, but estimates emissions based on production and
country-specific information for correction emission factors. The calculation pro-
cess in this approach is similar to the Tier 1 approach, except the global average
emission factors are replaced by country-specific values. The Tier 3 approach is an
input-based carbonate approach that estimates the emissions based on the carbon
inputs. The calculation process requires a material flow analysis of the entire pro-
duction supply chain. Hence, the Tier 3 approach requires the greatest volume of

Table 2.1 Electricity grid Electricity grid emission factor: (kgCO2/kWh)

emission factors
Northeast electricity grid: 0.9803
North China electricity grid: 1.0852
East China electricity grid: 0.8367
Central China electricity grid: 1.0297
Northwest electricity grid: 1.0001
South electricity grid: 0.9489
2.1 Methodology for Emission Accounting 17

data. For the purpose of data feasibility, we adopted the Tier 1 approach. Our
calculation is based accordingly on the following equation:

Emission ¼ Activity datai  Emission factori ð2:13Þ

Activity data are the amount of industry products at the national level (mass unit:
tons). The emission factors (unit: ton CO2/ton product) are the national average
ratio of the amount of CO2 released for each unit of product. The emission released
during the production process of glass, soda ash, ammonia, calcium carbide, and
alumina are listed as the following:
(1) Glass production: When glass raw materials have been melted, the limestone
(CaCO3), dolomite Ca(CO3), Mg(CO3), and soda ash (Na2CO3) produce CO2:

CaCO3 ! CaO þ CO2 ð2:14Þ

MgCO3 ! MgO þ CO2 ð2:15Þ

(2) Soda Ash production: Soda ash comprises primarily sodium carbonate
(Na2CO3). CO2 is emitted during the production of Na2CO3; thus, the carbon
emissions can be estimated by multiplying the quantity of soda ash consumed
by the default emission factor for sodium carbonate:

2Na2 CO3  NaHCO3  2H2 O ¼ 3Na2 CO3 þ 5H2 O þ CO2 ð2:16Þ

(3) Ammonia production:

Ammonia (NH3) in the form of major industrial chemical products is syn-
thesized by hydrogen and nitrogen, while both the production processes will
release CO2 as a by-product:
Hydrogen production:

CH4 þ H2 O ! CO þ 3H2 ð2:17Þ

CO + H2 O ! CO2 + H2 ð2:18Þ

Hydrogen and nitrogen production:

CH4 þ air ! CO þ 2H2 þ 2N2 ð2:19Þ

Ammonia synthesis:

N2 þ 3H2 ! 2NH3 ð2:20Þ

(4) Calcium Carbide production

Calcium carbide (CaC2) is created by heating calcium carbonate (CaCO3) to
produce calcium oxide (CaO) and the carbonization process of calcium oxide
(CaO). Both processes will release CO2.
18 2 China’s National, Regional, and City’s Carbon Emission Inventories

CaCO3 ! CaO þ CO2 ð2:14Þ

CaO þ 3C ! CaC2 þ CO ð2:21Þ

2CO þ O2 ! 2CO2 ð2:22Þ

(5) Alumina production

During the alumina production process, CO2 is emitted from the consumption
of carbon anodes while transforming alumina oxide into alumina metal:

2Al2 O3 þ 3C ¼ 4Al þ 3CO2 ð2:23Þ

2.2 Emission Factors

International fossil fuel emission datasets such as The International Energy Agency
(IEA) [7], Carbon Dioxide Information Analysis Center (CDIAC) [8], British
Petroleum (BP) [9], Emission Database for Global Atmospheric Research
(EDGARv4.2) [10], Regional Emission inventory in Asia (REAS) [11], and
Lawrence Berkeley National Laboratory-China Energy Group [12] also give a range
of emission estimates for China (spanning 0.3 Gt C for 2008). A key research gap is
the lack of transparent comparisons of the EF used for estimating China’s emissions
in these different datasets. Specific measurements of the EF are seldom conducted for
the fuels (especially the coal) typically used in China. These critical parameters also
vary with time and space, following the shifts in the exploitation of different coal
mines, or changes in the origin and amount of imported coal. In 2012, for instance,
8 % of the coal used in China was imported compared to only 0.1 % in 1990 [13].
We provide new estimates of EF of coal based on an unprecedented dataset from
coal mines and coal samples. China has 12,200 coal mines in total [14]. We
collected percent carbon content (Car, in %) data of raw coal for 4,243 state-owned
mines (Fig. 2.3). The total annual production of these 4,243 mines is 1.24 Gt-coal
(36 % of the 2011 national total production), and the total reserve for these mines is
86.24 Gt-coal (37.5 % of national total reserve [15]). The average Car of these
4,243 mines is 58.45 % (2σ = ± 44 %), and the production-weighted Car is of
53.34 % (Fig. 2.1a). The standard deviation here represents real spatial variability
across mines and not data uncertainty.
We also conducted independent chemical composition measurements of Car,
v (in TJ t−1 coal), and c (t C TJ−1) in 602 coal samples from 100 main coal mining
areas in China. The total annual production of these 100 mining areas is 3.53
Gt-coal (99 % of the 2011 national production). The average Car for the group of
602 samples (Fig. 2.1b) is 55.48 % (2σ = ± 44 %), and the production-weighted
average is 54.21 %. The average c (Fig. 2.1c) of our 602 coal samples is 26.59 t C
TJ−1 (2σ = ± 11 %) and 26.32 tC TJ−1 when weighted by production. The
2.2 Emission Factors 19

(a) 0.08
(b) 0.08
0.07 100% 0.07 100%
95% 95%
0.06 90% 0.06 90%
Frequency

Frequency
Mean Mean
0.05 0.05
0.04 IPCC 0.04 IPCC

0.03 0.03
0.02 0.02
0.01 0.01
0 0
0 20 40 60 80 100 0 20 40 60 80 100
Carbon content (%) Carbon content (%)
(c) 0.3 (d) 0.12
100% 100%
0.25 95% 95%
90% 0.09 90%
Frequency

Frequency
Mean Mean
0.2

0.15 IPCC 0.06 IPCC

0.1
0.03
0.05

0 0
15 20 25 30 35 40 5 10 15 20 25 30 35
Net carbon content (tC/TJ) Net heating value (PJ/Mt)
(e) 0.2 (f) 0.08
100% 0.07 100%
95% 95%
0.15 90% 0.06 90%
Frequency

Frequency

Mean Mean
0.05
0.1 0.04
0.03
0.05 0.02
0.01
0 0
0 10 20 30 40 0 10 20 30 40 50 60 70
Total mositure (%) Ash content (%)

Fig. 2.1 Histograms of Chinese coal properties. Total carbon content of 4243 coal mines (a) and
602 coal samples (b). Dashed lines show mean, and shading indicates 90 and 95 % intervals. c and
d, show net carbon content (c) and net heating values of the 602 coal samples, respectively.
Carbon content for coal mines (a) and samples (b) is significantly lower than IPCC value, which is
mainly because of the lower heating values, v, of China’s coal (d), net carbon content is close to
the IPCC value (c). Total moisture (e) and ash content (f) further proved the low quality of China’s
coal, which is in general with high ash content but low-carbon content

average v (Fig. 2.1d) is 20.95 PJ Mt−1 (2σ = ± 42 %) and this becomes 20.6 PJ
Mt−1 when weighted by production. Here as well, the standard deviation represents
real spatial variability across samples and not data uncertainty. When collocating
samples and mines data on a 1°-by-1° grid, their regression shows a slope close to
20 2 China’s National, Regional, and City’s Carbon Emission Inventories

one (Fig. 2.4), indicating that samples and mines both capture the same (large)
spatial variability of Car across China.
Overall, the coal mine and sample data give consistent average Car values
(58.45 % for mines and 55.48 % for samples) that are also spatially consistent across

0.713 IPCC
0.518 NDRC
0.491 NC
0.499 Coal samples (This study) -40%
0.491 Coal mines (This study) Chinese coal

0.713 IPCC

0.518 NDRC

0.491 NC

0.508 Coal samples (This study) Imported coal

0.838 IPCC

0.839 NDRC

0.839 NC

0.838 Oil samples (This study)

Oil

0.521 IPCC

0.591 NDRC

0.591 NC

0.590 Gas samples (This study)

Natural gas

0.106 IPCC

0.075 NDRC

0.075 NC

0.074 Clinker data (This study)

Cement

0 0.2 0.4 0.6 0.8 1.0

Emission factors
(tC per t of coal, oil or cement
and per thousand m3 gas)

Fig. 2.2 Comparison of emission factors. (in 2012). IPCC default value from IPCC guidelines for
national emission inventories (1996, 2006). NDRC value reported by National Development and
Reform Commission (NDRC) in 2008 [20]. NC China’s National Communication (NC) that
reported to UNFCCC (2012 for value in 2005) [23]
2.2 Emission Factors 21

the country’s very large range of Car. The mean Car values are significantly lower
than the IPCC default value (71 %) for coal. The Car for mines and samples show
consistent in spatial distribution (Fig. 2.4), indicating the robust of data quality.
Decomposing Car into the net average carbon content (c) and heating values (v), from
the coal samples data, we found v = 20.95 PJ Mt−1 which is very close to the
v reported by NBS (20.91 PJ Mt-coal−1) but significantly less than the default IPCC
value (28.2PJ Mt-coal−1) and the average of US coal value [16] (26.81PJ Mt-coal−1).
The c of coal (26.59 tC TJ−1) in within 2 % of the IPCC (1996, 2006) default value
(25.8tC TJ−1), and NC values reported in 1994 (26.1tC TJ−1).
Because of the average low quality of coal, the v of coal extracted in China is
much lower than the global average. This is also reflected by the high-level ash
content of China’s coal [17, 18]. The average ash content of the 602 coal samples
was 26.91 %, significantly higher than the average ash content of US coal samples
(14.08 %) [16]. This high ash content is an indirect evidence for a lower EF of coal
combustion, but implies larger emissions of particulates containing minerals per
unit of coal burned (such as PM 2.5 and fly ash) if fly ash is not removed in power
plants, with subsequent effects on air quality [19].
Technology efficiency, reflected in the oxidization rate parameter o defining the
fraction of coal consumed that is actually oxidized into CO2, is another factor that

Fig. 2.3 Location of 4243 coal mines (with annual production) and 602 coal samples. The coal
samples and mines are consistent with spatial distribution
22 2 China’s National, Regional, and City’s Carbon Emission Inventories

contributes to EF. To our knowledge, until now there has been no international
dataset using China’s national-specific o. The o value varies with the combustion
technology and economic sector. We collected data on specific o values of energy
consumption for 15 major sectors in China with 135 different technologies of fossil
fuel combustion based on the national level investigation by NDRC in 2008 [20].
By considering the share of each fuel type for each sector, the weighted average
o for coal in our calculation is 92 %, lower than the IPCC default value of 98 %,
but consistent with China-specific values reported by NDRC (94 %), NC (91.5 %)
as well as by Peters et al. [21]. The investigated o of oil (98 %) and natural gas
(99 %) are close to IPCC default value (within 1 %).
Based on the investigation of Car, c, v, and o, we updated the EFs (Fig. 2.2) of
coal, crude oil, and natural gas combustion in China. The final EF expressed in t C
per t-coal in 2012 show that EF from coal mining data (0.4907 t C tcoal−1) and coal
samples (0.4987 t C t−1) are nearly identical each other and 40 % lower than the
IPCC default value (0.713 t C t tcoal−1), but close to the specific value reported by
NDRC (0.5180 t C t−1) and by NC (0.4910 t C t−1). The value of NDRC and NC is
both based on the national investigation of about 1700 government-owned coal
mines in 1994 [22] (NDRC has updated o in 2005); thus, the results show time

90
Carbon content of
coal samples (%)

70

50

30
R=0.59, P<0.001
n=104
10
10 30 50 70 90
Carbon content from
coal mines (%)

Carbon content (%)

10 − 20
20 − 30
Annual production
30 − 40
(104 t yr-1)
40 − 50
0 − 10 50 − 60
10 − 100 60 − 71
100 − 1000 71 − 80
> 1000 80 − 90

Fig. 2.4 Total carbon content and production of coal mines. The inset shows the comparison
between carbon content from 602 coal samples and 4243 coal mines (R = 0.59, P < 0.001,
n = 104). Each dot in the inset indicates the average of carbon content from 602 coal samples and
4243 coal mines in the same 1°-by-1° grid. The nearly one-to-one correlation indicates that
samples and mines capture the same spatial variability of coal carbon content across China
2.2 Emission Factors 23

consistency of EF. The EF of China’s natural gas is 11 % higher than the IPCC
value. The difference of emission factors for crude oil and cement production
process is within 5 % of IPCC (Figs. 2.2, 2.3, and 2.4).
All error bars are 2σ errors.

2.3 China’s National Carbon Emission Inventories

2.3.1 Carbon Emission from Energy Combustion

China’s carbon emissions from fossil fuel burning and cement production were 8.50
GtCO2 in 2012, making it the country with the largest emissions in the world.
China’s carbon emissions were only 5.46Mt CO2 in 1950; thus, the total emissions
increased more than 100-folds during those 60 years. Carbon emissions are mainly
the result of fossil fuel combustion (90 %) and cement production (10 %). In 2012,
90 % of China’s energy consumption was primarily derived from fossil fuel
combustion (Fig. 2.5): 68 % from coal consumption, 13 % from oil, and 7 % from
gas.
Among the industrial sectors, the emissions are mainly produced by the man-
ufacturing and power generation sectors (see Fig. 2.6). In 2012, manufacturing
accounted for 47 % of China’s total carbon emissions, while thermal power gen-
eration contributed 32 %, and the transportation sector accounted for only 6 %.
Such patterns differ with each sector’s proportion of emissions from other major
emitters, especially from the developed countries where the emissions are mainly
from the transportation and household sectors. For example, in the USA, the
transportation sector produces 32 % of the total carbon emissions while the
industrial sector only accounts for 17 %.

6 Cement Production
Other Fuels
Gt CO2

5
Gas
4 Oil
Coke
3
Cleaned Coal
2 Raw Coal

0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

Fig. 2.5 China’s national CO2 emissions by fuels (unit: Mt CO2)

24 2 China’s National, Regional, and City’s Carbon Emission Inventories

100%

90%

80% Rural Consumption

Urban Hosehold Consumption
70%
Other industrials
60% Services
Transportation
50%
Construction
40% Cement Production
Heating Supply
30% Thermal Power
20% Manufacturing
Agriculture
10%

0%
1997 2002 2007 2012

Fig. 2.6 China’s national CO2 emissions by sectors (unit: Mt CO2)

2.3.2 Carbon Emission from Cement Production Process

Cement process emissions account for about 9 % of China’s total carbon emissions
[10]. Carbon emissions associated with cement production in China are about half
of the global total. CO2 is emitted during calcining of limestone to produce clinker,
which is combined with other ingredients to produce cement. We calculated
China’s emissions from cement production based on clinker production and EF. We
found that carbon emissions of cement production in China were 0.62 Gt CO2 yr-1
(2σ = ± 3 %) in 2012 compared to 0.024 Mt CO2 yr-1 in 1978. The cement
emissions are lower than those reported by international sources. For example,
cement emissions are 1.1 Gt CO2 yr-1 in CDIAC and 0.88 Gt CO2 yr-1 in
EDGARv4.2 (data for 2012).
The large differences in cement carbon emissions are because CDIAC and
EDGAR estimated clinker production as a fraction of total cement production,
whereas we collected original clinker production data. To calculate the cement
process emission, it is more appropriate to use the specific amount of clinker
production rather than the total cement production. China’s clinker production was
not directly reported by national statistics. Therefore, the IPCC proposed a method
to estimate it by using a fixed cement-to-clinker ratio, and this method is used by
CDIAC and EDGAR. This ratio is estimated to be 95 % in the IPCC 1996
Guidelines [1], which assumed that most cement in China was Portland cement.
The more recent IPCC 2006 Guidelines [2] suggested a 75 % cement-to-clinker
ratio for developing countries. We found that both IPCC 1996 and 2006 default
values result in an overestimation of China’s clinker production when compared
with official clinker statistics from China Cement Association [24]. These data
suggest that the cement-to-clinker ratio was only 58 % in 2012, which is also
2.3 China’s National Carbon Emission Inventories 25

350
This study
IPCC 1996 clinker
IPCC 1996 cement
300 IPCC 2006 clinker
IPCC 2006 cement
CSI
CDIAC
250 PBL/EDGAR

200
Mt C

150

100

50

0
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Fig. 2.7 Emission estimates of China’s cement production emissions by different sources
(1C = 3.6642 CO2)

consistent with factory-level investigations [25] and other recent studies [26–29].
As a result, our estimation of emissions from cement production (0.62 Gt CO2 yr-1)
is 45 % lower than CDIAC (1.1 Gt CO2 yr-1) and 32 % lower than that of
EGDARv4.2 (0.88 Gt CO2 yr-1) (Fig. 2.7).

2.3.3 Emission from Industrial Process

The total CO2 emissions from the production of alumina, plate glass, soda ash,
ammonia, and calcium carbide totaled only 43 Mt CO2 in 1990 but 233 Mt CO2 in
2013. The cumulative industrial emissions of manufacturing the 5 products are also
significant, and during the 1990–2013 period, it measured approximately 2.5 Gt
CO2, exceeding the total annual emissions of India. Annual 233 Mt CO2 emissions
are equivalent to approximately 25 % of the total emissions from cement produc-
tion. However, such emissions are not reported by current international emission
datasets or by China’s national emission inventories that are reported to the UN.
26 2 China’s National, Regional, and City’s Carbon Emission Inventories

The emissions from the production of ammonia and alumina constitute the
highest proportion of total emissions from the 5 industrial processes. In 2013,
emissions from ammonia and alumina contributed 42 and 31 % of total industrial
process emissions, respectively. Emissions from calcium carbide production con-
stituted the third largest contribution, constituting 24 % of total industrial process
emissions. The contributions from glass production and soda ash production are
relatively small, namely 1.7 and 1.4 %, respectively. For the 1990–2013 period, the
industrial emissions of all five production processes increased rapidly. In particular,
the emissions from alumina production increased substantially from 12 Mt CO2 in
2004 to 73 Mt CO2 in 2013, a sixfold increase within ten years. The trend of
increasing emissions from ammonia production is relatively smooth compared with
that from the production of the other four products. This finding may be due to the
long history of Chinese agricultural development, and the associated demand for
ammonia as a fertilizer has been relatively stable because of the scale and status of
China’s agriculture system. Additionally, the emissions from the production of
alumina, calcium carbide, and ammonia fluctuated around the year 2008, which can
be explained as the impact on the production processes of the global economic
crisis [30]. After 2008, the emissions from these processes continued their rapid
growth trends. China initiated a 4,000 billion RMB economic stimulus plan in 2008
to counteract the effects of the global economic crisis and invested most of the
capital in infrastructure construction, which stimulated industrial production [31].
For example, the emissions from alumina production doubled during the period
2008–2013. This doubling can be explained by the rapid development of heavy
industries after 2008 (Fig. 2.8).

250

200

150 Alumina
Mt CO2

Calcium Carbide
Ammonia
100
Soda Ash
Glass
50

0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

Fig. 2.8 Industrial process emissions from the production of alumina, plate glass, soda ash,
ammonia, and calcium carbide in 1990–2013
2.4 China’s Provincial Carbon Emission Inventories 27

2.4 China’s Provincial Carbon Emission Inventories

2.4.1 Methods

The inventories include carbon emission from energy consumption of 30 provinces,

excluding Tibet, Taiwan, Hong Kong, and Macau Special Administrative Region.
Data were obtained from National Energy Statistical Yearbook and Provincial
Energy Balance Sheet.
The compilation steps are the following:
Determine the energy consumption data of different sectors.
Determine the sectorial emission factor.
Different from national carbon accounting, provincial carbon emission calcula-
tion should take cross-regional electricity transmission into consideration. This
study adopted the accounting method from a consumption perspective rather than
production perspective.
Calculation formula is

CO2 electricity ¼ ðEFe  Activitye Þ ð2:25Þ

where
EFe: electricity grid emission factor (kgCO2/kWh)
Activitye: consumption of electricity
National electricity grid can be divided into northeast, north China, east China,
central China, northwest, and south regional electricity grid, not including the Tibet
Autonomous Region, Hong Kong SAR, Macau SAR, and Taiwan.
The coverage of each regional electricity grid is shown below.
Northeast electricity grid: Liaoning, Jilin, and Heilongjiang
North China electricity grid: Beijing, Tianjin, Hebei, Shanxi, Shandong, and
Inner Mongolian Autonomous Region
East China electricity grid: Shanghai, Jiangsu, Zhejiang, Anhui, and Fujian
Central China electricity grid: Henan, Hubei, Hunan, Jiangxi, Sichuan, and
Chongqing
Northwest electricity grid: Shaanxi, Gansu, Qinghai, Ningxia Autonomous
Region, and Xinjiang Autonomous Region
South electricity grid: Guangdong, Guangxi Autonomous Region, Yunnan,
Guizhou, and Hainan
28 2 China’s National, Regional, and City’s Carbon Emission Inventories

2.4.2 Carbon Emissions from 30 Provinces in 1995–2010

Figure 2.9 shows China’s provincial carbon emission patterns in 2010. It is clear
that the pattern coincides China’s industrial center distribution. It is shown in
Tables 2.2 and 2.3 that there was a nation-wide dramatic increase in provincial
energy-related carbon emission between 1995 and 2010, especially in underde-
veloped areas such as Xinjiang and Inner Mongolia, who mainly relied on heavy
and energy-intensive industries.
Industry and thermal power generation are the predominant energy consumers.
Among all energy types, the increase in coal consumption represents 80 % of the
total increase. The summation of provincial increasing trend is the same as national
increasing trend.
It is worth noticing that there was a 5–20 % error between the provincial sum of
carbon emission and the national carbon emission based on National Balance Sheet.
In 2010, the absolute value of the error is as high as 1.4 billion tons of carbon
dioxide, equivalent with the total emission of Japan in the same year. Comparisons
between carbon accounting by different organizations reveal that the uncertainty of
China’s energy-related carbon emission is inevitable under different data sources
and choices of emission factors. Possible reasons for this uncertainty are:

Fig. 2.9 China’s provincial CO2 emissions in 2010 (unit: Mt CO2)

2.4 China’s Provincial Carbon Emission Inventories 29

Table 2.2 China’s provincial CO2 emissions in 1997–2003 (unit: Mt CO2)

1997 1998 1999 2000 2001 2002 2003
Beijing 60.75 62.73 66.21 67.35 76.99 76.38 80.91
Tianjin 53.26 54.93 56.09 59.80 62.04 71.75 71.55
Hebei 208.74 232.01 218.91 233.42 248.07 278.96 322.19
Shanxi 148.12 146.93 144.88 147.81 184.29 221.10 245.88
Inner 98.79 94.10 98.71 106.98 116.48 127.64 122.24
Mongolia
Liaoning 203.60 197.76 185.59 215.95 190.82 215.62 237.28
Jilin 100.94 86.58 88.06 82.77 87.96 91.06 99.00
Heilongjiang 134.40 134.83 125.79 130.26 126.16 118.50 122.45
Shanghai 108.86 115.92 127.89 125.76 138.17 145.08 155.41
Jiangsu 189.23 191.25 193.01 204.17 196.91 212.72 234.63
Zhejiang 111.43 109.36 113.46 123.81 134.16 144.65 162.44
Anhui 105.11 107.15 109.45 115.77 122.88 128.95 145.01
Fujian 41.20 44.56 56.27 53.51 52.82 64.40 78.41
Jiangxi 50.49 49.64 48.96 50.47 54.93 58.04 70.89
Shandong 177.66 196.42 196.55 173.65 210.87 236.80 313.19
Henan 145.09 145.30 146.17 166.94 168.56 171.04 190.26
Hubei 132.26 130.52 133.64 134.31 126.70 150.45 158.67
Hunan 94.89 95.82 77.14 73.26 71.86 83.40 95.24
Guangdong 160.39 179.25 180.34 189.81 198.45 213.42 241.25
Guangxi 45.81 46.47 47.08 50.59 48.86 48.67 58.70
Hainan 6.73 13.79 7.18 7.75 8.14 No data 14.98
Chongqing 53.39 61.16 66.49 68.03 61.25 65.66 57.94
Sichuan 116.88 116.58 101.97 96.93 99.46 114.23 145.52
Guizhou 72.19 94.36 75.92 79.19 79.05 82.62 105.80
Yunnan 54.38 53.67 51.54 49.88 58.35 69.32 85.07
Shaanxi 63.11 59.94 54.82 54.59 56.27 69.71 74.79
Gansu 47.21 47.59 47.91 51.01 52.60 55.79 63.72
Qinghai 11.58 11.51 13.56 11.92 14.46 15.20 17.46
Ningxia 16.57 17.36 17.14 No data No data No data 50.83
Xinjiang 62.67 63.88 62.10 64.67 67.78 63.73 74.09
Industrial 255.1 267.2 285.64 297.6 329.53 361.41 429.75
process
emissions
Total 3,130.87 3,228.56 3,198.46 3,288.00 3,444.86 3,756.30 4,325.57
emissions

China’s energy consumption and carbon emission have been accelerating as a

result of its rapid economic development, but the statistical technology and man-
agement standards lagged behind, not being able to accomplish large-scale quan-
tification and accounting.
30 2 China’s National, Regional, and City’s Carbon Emission Inventories

Table 2.3 China’s provincial CO2 emissions in 2004–2010 (unit: Mt CO2)

2004 2005 2006 2007 2008 2009 2010
Beijing 86.62 91.18 95.86 102.73 98.10 99.14 103.05
Tianjin 82.19 94.35 100.54 109.55 116.47 128.62 134.36
Hebei 366.01 453.87 478.10 515.17 541.16 558.12 663.18
Shanxi 260.21 276.61 306.30 334.19 367.52 371.27 403.45
Inner 197.49 230.01 266.97 339.26 412.42 443.29 474.35
Mongolia
Liaoning 255.40 281.84 323.18 358.15 367.64 405.89 456.38
Jilin 108.49 143.52 158.55 170.16 175.93 179.02 198.36
Heilongjiang 133.57 161.01 178.06 189.16 198.00 201.72 217.38
Shanghai 171.53 174.62 202.71 217.10 218.65 200.98 211.26
Jiangsu 306.23 394.21 427.87 453.04 476.90 495.25 555.56
Zhejiang 199.57 235.97 269.29 304.26 310.86 316.54 337.48
Anhui 150.24 147.20 166.43 185.60 213.91 236.86 247.75
Fujian 96.66 117.21 128.19 153.04 157.31 176.81 187.30
Jiangxi 82.58 88.40 99.33 116.46 118.01 126.34 134.84
Shandong 387.01 545.98 590.31 658.49 696.63 718.99 769.12
Henan 225.63 295.72 338.25 409.10 415.01 428.77 490.92
Hubei 176.03 183.83 217.87 242.55 247.93 266.75 319.61
Hunan 109.10 169.15 192.56 212.36 214.75 224.10 243.02
Guangdong 286.92 329.18 353.17 384.73 397.99 421.20 443.59
Guangxi 79.16 88.15 103.93 117.36 118.64 135.39 155.79
Hainan 14.09 15.52 17.34 21.25 25.22 25.67 25.82
Chongqing 63.72 76.77 84.22 92.51 119.54 125.06 124.86
Sichuan 165.36 158.12 165.47 195.20 218.71 245.03 270.10
Guizhou 118.35 136.84 160.43 168.86 160.23 179.14 182.36
Yunnan 53.82 127.86 143.54 153.74 155.99 176.21 183.64
Shaanxi 93.62 102.63 111.77 135.05 153.90 170.55 202.27
Gansu 73.48 81.49 87.58 95.52 101.75 98.33 123.44
Qinghai 18.72 19.54 23.93 25.27 29.78 29.96 28.88
Ningxia 58.53 48.25 56.02 66.81 71.43 79.04 91.11
Xinjiang 92.27 109.13 118.80 129.26 138.97 155.95 166.75
Industrial 481.96 532.82 616.53 678.54 709.64 819.52 938.13
process
emissions
Total 4,994.56 5,911.00 6,583.09 7,334.49 7,749.00 8,239.51 9,084.10
emissions

As most regions of China regard fast economic development as successful

political achievement, the local government would conceal the real statistical val-
ues, which results in the larger value for provincial sum estimate.
2.4 China’s Provincial Carbon Emission Inventories 31

As a result of widespread cross-regional electricity and primary energy trans-

mission, energy consumption may be calculated for several times. For example, raw
coal is included as primary energy consumption in its place of production, while
washed coal is again included in its place of consumption, leading to errors from
duplication.
Uncertainty analysis is crucial to the compilation of carbon inventories, but the
quantification of uncertainties is out of the scope of this study. The study of
energy-related carbon emission is based on international references, and the
uncertainty is +10 %.

2.5 Difference of China’s Carbon Emission Estimates

Between National and Provincial Statistics

The uncertainty associated with carbon emissions in China comes from both
uncertainties regarding activity data and emission factors. The Chinese National
Bureau of Statistics (NBS) is the only official source for the data on energy con-
sumption and cement production. NBS reports the national energy consumption
data that been used by international organizations such as the United Nations or the
World Bank. However, a conspicuous error in energy consumption data, reported
by the NBS since 2000s, is that the provincial aggregated energy consumption data
are 20 % higher than the national energy consumption data [32]. Therefore, there is
significant uncertainty regarding which of the two numbers are more accurate.
China implements a top-down statistics system—the compilation of energy
statistics in China occurs under the aegis of the National Bureau of Statistics
(NBS) at the central government level which oversees and coordinates the corre-
sponding statistical departments at provincial and county level [33]. The NBS
designs and publishes survey principles and reporting formats that are applied to all
regional and local statistical department for collecting energy data and information
from firms and households. The NBS publishes both national and provincial
‘Energy Balance Sheets’ annually in China’s Energy Statistical Yearbook [34],
which provides detailed energy inventory and final energy consumption for the
country and each province. In principle, the national energy statistics should be
identical to the provincial ones.
In 2009, China’s national energy consumption was 3,066 million tons standard
coal equivalents (SCE), but the sum of all the provinces was 17 % higher, i.e.,
3,572 million tons SCE. The energy data discrepancy between the national total and
the sum of the data provided by the provinces has been increasing since the 1990s.
The discrepancy was less than 2 % in 1995, but the difference kept increasing to
17 % in 2009. The “official” explanation offered by the NBS is: “as [different]
conversion factors [are applied in converting to standard unit of energy con-
sumption], the sum of the data by region is not equal to the [national] total” [34].
32 2 China’s National, Regional, and City’s Carbon Emission Inventories

If only the conversion factor is to be blamed, then the amount of energy consumed
in physical units should still be identical. The amount of raw coal consumption in
2009 from the national Energy Balance Sheet is 2,966 million tons, while aggregated
figure from provincial sheets is 3,560 million tons. The discrepancy of coal con-
sumption is 20 %, while the discrepancies of other types of final energy consumption
are relatively small (see Fig. 2.10). Furthermore, the difference is due to factors in
energy transformation and final energy consumption. For example, the difference of
coal washing during energy transformation process between the two data sources can
contribute 33 % of the total discrepancy of 594 million tons in raw coal consumption
while manufacturing contributes 42 % of the discrepancy.
As a result, China’s estimated CO2 emission from provincial aggregation was
14 % higher than the figure calculated based on the national statistical data in 2010.
The discrepancy of 1.4 Gt accounts for about 3 % of the world’s total and is larger
than Japan’s total emissions, which can be ranked as the 5th largest emitter in the
world. If we compare the CO2 emissions from the provincial aggregation with data
from other international statistical agencies, the gap ranges from 0.09 Gt (the
equivalent of Maldives total emissions [35]) to 1.2 Gt (Japan’s total [35]) in 2008.
We conduct analysis to show the uncertainty range of China’s emission esti-
mates based on emission factors (EFs) reported in the literature. We collected 12
sets of EF data for fossil fuel combustion from the six following official sources:

10,000

9,000 1.3 gigaton gap of CO2 in 2010 1500

1200
8,000
Mt CO2

900
7,000
600
6,000 300
Mt CO2

5,000 0

4,000
Other Fuels
3,000 Process Emission
Natural Gas
2,000
Petroleum
1,000 Coal
Provincial Aggregation
0
1997 1999 2001 2003 2005 2007 2009

Fig. 2.10 The sources of China’s CO2 emissions by fuel types during 1997–2010. The left side
“area chart” illustrates the increases of CO2 emissions calculated from the national energy
statistics since 1997 breaking down with different fuel type: coal—light blue; petroleum—yellow;
natural Gas—black; process emission—purple; and other fuels (e.g., coke oven gas, other gas,
other coking products, LPG, refinery gas, and other petroleum products)—dark blue. The dash line
represents the aggregated CO2 emissions calculated from the provincial energy statistics 1997–
2010. The right side “column chart” presents the 1.4 Gt emission gap in 2010 between national
and provincial statistics and the pattern of different fuel types in contributing the emission gap
2.5 Difference of China’s Carbon Emission … 33

IPCC (1996, 2006) [1, 2], China National Development and Reform Commission
(NDRC) [36], UN Statistics (UN) [37], China National Communication on Climate
Change (NC) [23], China National Bureau of Statistics (NBS) [13], and
Multi-resolution Emission Inventory for China (MEIC) [38]. There are 3 sets of EF
in the NDRC data, corresponding to 3 tiers of fuel classifications, 4 sets in NC and 2
sets in UN. We combined these 12 sets of EF with 2 sets of energy statistics derived
from national and provincial data [13, 39]. This yielded 24 possible inventories for
China’s carbon emissions of fossil fuel combustion for 1997–2012. The underlying
data used in the commonly used datasets (IEA, CDIAC, BP, EDGAR) are either
listed in this data assembly (NBS and IPCC) or not publically available.
The mean value of 24 possible inventories is 2,490 MtC in 2012, and the
standard deviation is 372 MtC (15 %). The 2σ standard deviation range suggested
by 24 possible inventories is 30 %, which is larger than the reported range of 10 %
by current emission datasets such as EDGAR.
A Monte Carlo approach was adopted to assess the distribution range of the
emissions by assuming that all reported EF values have the same probability (values
have been randomly selected with equal probabilities and calculated for 100,000
times). The mean value of the 24 members’ ensemble is 2.43 Gt C in 2012 (95 %
confidence interval is +20 %, −11 % and max–min range of +27 %, −15 %). The
uncertainty is attributed to the activity data (about 40 % of total uncertainty) and EF
(60 %). The variability of EF for coal dominates the total uncertainty (55 % for
total uncertainty and 90 % for the uncertainty by EF), whereas the EF for other
fuels are more comparable. Different EF values for coal mainly reflect variation in
v and hence Car (Car = v × c) values, whereas the variation of c and o is com-
paratively smaller (less than 10 %).
The distribution range of the emissions is listed in Fig. 2.11.

3
CO 2 emissions (GtC yr−1)

1 10 20 30 40 50 60 70 80 90 99
Percentiles (%)
2.5
EP

2
EN

1.5

0.5
1998 2000 2002 2004 2006 2008 2010 2012
Year

Fig. 2.11 Uncertainty distribution of Chinese CO2 emissions 1997–2012. Monte Carlo simula-
tions of the Chinese carbon emissions based on a blended activity dataset where national and
provincial data are assigned equal probabilities (n = 100,000). Chinese carbon emissions based on
national energy activity data (EN) and provincial activity energy data (EP) in 2012 are shown on
the right bar
34 2 China’s National, Regional, and City’s Carbon Emission Inventories

We assumed the equal possibility for various EF when conducting the Monte
Carlo analysis, and this will expand the uncertainty range. However, both the
standard deviation of 24 possible inventories and the Monte Carlo analysis show
the significant uncertainty range, implying the considerable system error of the
emission estimates by using reported EF; thus, it is critical to perform the emission
estimates based on measurement-based EF.

2.6 City’s Carbon Emission Inventories

2.6.1 Methodology

The urbanization process has been considered as the major driver for China’s
development in the coming decades. Cities play an essential role in China’s carbon
emissions, for example, 85 % of China’s direct carbon emissions are from cities [40].
It is difficult to define a city’s boundary for carbon emission accounting due to
lots of cross-boundary carbon emissions caused by urban metabolism.
Cross-boundary exchange of goods, services, commuter travel, and aviation has
posed challenges in developing a holistic accounting of emissions associated with
human demands for energy and materials in cities. Direct use of primary energy
through industrial activity leads to the direct carbon emissions within territorial
boundary, and these emissions are usually defined as scope 1. Cities also consume
lots of purchased electricity generated by upstream power plant, and the corre-
sponding emissions are defined as scope 2. The consumption of products leads to
the emissions from upstream production through supply chain, which is defined as
scope 3. Various boundary definitions arouse uncertainties of cities’ carbon
inventories and then become barriers for the comparability of cities’ carbon
emission status at global scale.
To undertake quantitative analysis on carbon emissions from Chinese cities is
necessary. Practically, China’s regional “low-carbon development” strategy mainly
targeted in cities. For example, several cities have already initiated their low-carbon
development plans, such as Baoding, Shanghai, Guiyang, Hangzhou, Wuxi, Jilin,
Zhuhai, Nanchang, and Xiamen [41]. National Reform and Development
Commission (NDRC, a ministry leveled agency responsible for national economy
planning) initiated national low-carbon demonstration projects in August 2010, in
which eight cities were chosen as pilot cities, including Tianjin, Chongqing,
Shenzhen, Xiamen, Hangzhou, Guiyang, and Baoding. Academically, studies on
carbon emissions in Chinese cities increased sharply, such as Shanghai [42],
Shenyang [43], Nanjing [44–46], and Suzhou [45, 47]. Both “top-down” and
bottom-up” approaches have been applied, and most of the carbon emissions were
calculated based on the IPCC method for national carbon inventory [48]. For
example, Dhakal estimated energy consumption and CO2 emission in 35 cities and
analyzed historical changes in Beijing, Tianjin, Shanghai, and Chongqing by using
2.6 City’s Carbon Emission Inventories 35

a “top-down” approach [40]. Xi et al. [43] and Bi et al. [44] developed a bottom-up
accounting approach with sectoral detailed carbon emissions. These studies created
opportunities for global comparison, but a comparison study among different cities
from spatial–temporal perspective is still missing, especially between different
emission scopes.
Calculation of city’s carbon emissions from different scopes:
(1) Direct carbon emission (scope 1) accounting
In this study, we analyzed the scope 1 and scope 2 emissions for Chinese mega
cities. The scope 1 emission includes emissions from industrial energy con-
sumption, cement manufacturing process, residential consumption and trans-
portation. Emission from industrial energy consumption can be calculated by
the quantity and type of final energy consumption. Emission from cement
manufacturing process can be calculated according to the production quantity
and the respective emission factor. Car ownership, density of road network,
population density, transportation volume, and the provincial emission data
can be used to estimate transportation emission. Emission from waste disposal
can be calculated by waste disposal quantity and the life cycle emission
database. Remote sensing results and GIS technology are used to calculate the
carbon emission from changes in land usage.
(2) Cross-regional electricity transmission carbon emission (Scope 2) accounting
The scope 2 emission can be calculated based on electricity production and
supply, and the purchase and output of electricity. Here, we calculated the
scope 2 emission by using the cross-regional electricity (imported electricity)
multiplied by the emission factors (emission per unit of electricity
consumption).
(3) Embodies carbon emission (Scope 3)
Scope 3 inventories require detailed information on materials and energy flux
and should be calculated through the use of national and regional input–output
(IO) models. The scope 3 carbon emission can be calculated according to the
consumption quantity of major products, LCA emission database, and the
Global Trade Analysis Project (GTAP) [49].

2.6.2 Carbon Emissions in Chinese Megacities: Case Study

in Beijing, Tianjin, Shanghai, and Chongqing

Beijing, Tianjin, Shanghai, and Chongqing are four municipal cities directly
accountable to the central government (politically equal to one province) in China.
The definition of the total population of these four cities is 70 million, about 1 % of
global population, and their total GDP counts for 10 % of the whole country in
36 2 China’s National, Regional, and City’s Carbon Emission Inventories

2009 [50]. Beijing is the capital of China which locates in the northern part of the
North China Plain. It covers 16, 808 km2 area and has a population of 17.6 million
and a gross domestic product (GDP) of 1, 215 billion Yuan (RMB) in 2009. Tianjin
is east to Beijing, approximately 160 km from Beijing. It covers an area of 11,
920 km2, with a population of 9.69 million and a GDP of 752 billion Yuan in 2009.
Shanghai is an economic center located in Yangtze delta area, with an area of
6340 km2, a population of 19.2 million, and a GDP of 1, 505 billion Yuan in 2009.
Chongqing is located along the upper reaches of the Yangtze River, straddling the
region that connects the central and western parts of China. It covers an area of 82,
400 km2 and has a population of 28.6 million and a GDP of 653 billion in 2009.
Therefore, here we performed the scope 1 and scope 2 carbon emission accounting
for the aforementioned four municipalities as examples.
The total population of Beijing, Tianjin, Shanghai, and Chongqing is over 70
million, accounting for approximately 1 % of the global population. The total GDP
of four municipalities accounts for 10 % of the national GDP. The total GDP,
population, and area of the four municipalities in 2009 are shown in Table 2.4.
The calculation of carbon emission is based on the sectorial energy consumption,
the quantity of cross-regional electricity supply, and electricity consumption from
1995 to 2010.
Calculation results:
All the four cities have rapid growth of total (scope 1 + scope 2) emissions from
1995 to 2009 (for Chongqing from 1997 to 2009), in which Beijing increased from
81 million tons of CO2 in 1995 to 155 million tons of CO2 in 2009, Tianjin
increased from 65 million tons of CO2 in 1995 to 176 million tons of CO2 in 2009,
Shanghai increased from 100 million tons of CO2 in 1995 to 218 million tons of
CO2e in 2009, Chongqing increased from 58 million tons of CO2 in 1997 to 144
million tons of CO2 in 2009, respectively. In total, four big cities emitted
approximately 700 million tons of CO2 in 2009 and contribute to about 2 % of
global anthropogenic GHG emissions. In particular, scope 2 contributes signifi-
cantly to the total amount of carbon emissions and shows a considerable increase
both in Beijing and Shanghai. The proportion in Beijing increased from 17 % in
1995 to 32 % in 2009, accounting for 50 million tons of CO2 in 2009. Shanghai had
no input cross-boundary emissions in 1995 and then had 13 % of cross-boundary
emission proportion in 2009, accounting for 28 million tons of CO2 in 2009. The

Table 2.4 Population, GDP, area, and urbanization level of Beijing, Tianjin, Shanghai, and
Chongqing
Population GDP (billion RMB) Area (km2) Urbanization rate (%)
(million)
Beijing 17.6 1215.3 16,410.5 78.2
Tianjin 12.3 721.2 11,917.3 60.9
Shanghai 19.2 1504.7 6,340.5 88.3
Chongqing 28.6 653.0 82,402.9 30.0
2.6 City’s Carbon Emission Inventories 37

fractions of cross-boundary emissions both in Tianjin and Chongqing in 2009 are

relatively small with 9 % (15 million tons of CO2) in Tianjin and 4 % (6 million
tons of CO2) in Chongqing.
Figures 2.12 and 2.13 show the sectoral carbon emission distribution of four
municipalities in 1995 (1997 for Chongqing) and 2009. It is clear that industries,
thermal electricity generation, and external electricity purchase are the major carbon
emission contributors, followed by transportation and heat supply. Emission from

Fig. 2.12 CO2 emission from different sectors (inner year 1995; external year 2009)
38 2 China’s National, Regional, and City’s Carbon Emission Inventories

external electricity purchase (scope 2 emission) represents a large proportion of the

total emission and experienced an accelerating increase. For example, emission
from external electricity purchase in Beijing accounted for 17 % of the total
emission, and the figure increased to 32 % (20 million tons) in 2009. There was no
external electricity purchase in Shanghai in 1995, while the proportion rose to 13 %
in 2009. The percentage of external electricity in Tianjin and Chongqing was
minimal, with 9 and 4 % for Tianjin and Chongqing, respectively. It is manifested
that the proportion of scope 2 emission represents the developing and urbanization
level of a city to some extent.

160 160
Beijing Tianjin
140 140
Million tons of CO 2 e

120 120
Million tons of CO 2 e
100 100

80 80

60 60

40 40

20 20

0 0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
250 160
Shanghai Chongqing
140
200
Million tons of CO 2 e
Million tons of CO2 e

120

150 100

80
100 60

40
50
20

0 0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

11.Cross-boundary Electricity 10.Other Consumption

9.Rural Residential Consumption 8.Urban Residential Consumption
7.Comerical Industry 6.Transportation
5.Construction 4.Industry
3.Agriculture 2.Heating
1.Thermal Power

Fig. 2.13 Trajectory of GHG emission from Beijing, Tianjin, Shanghai, and Chongqing (1995–
2009)
2.6 City’s Carbon Emission Inventories 39

Apart from the external electricity purchase sector, industries and transportation
are two other sectors whose carbon emission increased the most rapidly. The
average increase in emission from industries has doubled over the period. Carbon
emission from transportation increased from 4 % in 1995 to 32 % in 2009 for
Beijing, 1 to 9 % for Tianjin, 6 to 18 % for Shanghai, and 3 to 7 % for Chongqing.
The carbon emission per capita is 8.9 tons, 12.2 tons, 11.3 tons, and 5.1 tons for
Beijing, Tianjin, Shanghai, and Chongqing, respectively. The average carbon
emission of Beijing, Tianjin, and Shanghai is similar to cities in developed coun-
tries, while the emission per capita is lower in Chongqing. As the urbanization level
in Beijing and Shanghai has reached 80 %, while Chongqing is only 30 %, the
average emission can reveal the economic development level to some extent.
Under the rocketing urbanization process, a great amount of population will
surge to urban areas in the following decades. With increasing life quality and the
development of infrastructure, the municipal carbon emission in China will further
increase. Regions with similar carbon emission quantities as cities of developed
countries could be key areas to implement energy conservation and emission
reduction strategies.
From per capita point of view, the per capita carbon emissions in Tianjin,
Shanghai and Beijing are among at the average international level (Fig. 2.14), while
such a figure in Chongqing (5.1 tons of CO2 per capita) is still low, indicating a
potential increasing emission due to their further urbanization initiatives and
improvements of citizens’ living standards.
The scope 2 emissions from imported electricity use play a significant role in the
evolution of the carbon emissions during 1995–2009. Beijing and Shanghai
reversed their growth trends of carbon emissions when considering the indirect
carbon emissions from imported electricity use since 2004. Besides, the proportion

25.0
21.5

20.0

15.0 13.0
12.2 11.6 11.6
11.3 10.7
10.5
9.6 9.4
10.0 8.9
7.8

5.1
5.0 4.2

0.0
New York City
Los Angeles

Cape Town

Chongqing

Barcelona
Shanghai

Bangkok
Toronto

London

Geneva
Denver

Beijing
Tianjin

Prague

Fig. 2.14 Per capita CO2 emission for global cities (tCO2 per capita)
40 2 China’s National, Regional, and City’s Carbon Emission Inventories

of carbon emissions from cross-boundary electricity keeps growing with city’s

development. It implies that with city’s further development and industrial structure
changes (such as more dependence on service-oriented industries), cross-boundary
activities will further strengthen, and such cities will further rely on products,
energy supply, and material supply from other regions.

2.6.3 Carbon Emissions from 150 Chinese Cities

We found the total carbon emissions from 150 Chinese cities (this is the number of
cities for which the emissions data are available) are about 6,006 Mt CO2 in 2010,
which is higher than total emissions from the USA (the second largest emitter) and
which accounts for 70 % of China’s total carbon emissions. The per capita emis-
sions show the significant variations of Chinese cities. The CO2 emissions per
capita in some Chinese cities are even higher than those of cities in developed
countries. For example, the emissions in Tangshan city (in Hebei province), Suzhou
city (in Jiangsu Province), Baotou city (in Inner Mongolia), and Zibo City (in
Shandong province) are more than 20t CO2 per capita—not surprisingly, these
cities are important resource bases or manufacturing bases for China. However, in
general, the per capita emissions in Chinese cities (about 7.5 t CO2 emissions per
capita) are much lower than the cities of developed countries and are approaching
the level of global average. The emissions per capita in rural China are much lower
than the emissions per capita in urban areas, mainly due to the less-developed
infrastructure and a lower standard of living conditions in rural China (Fig. 2.15).

Fig. 2.15 CO2 emissions in 150 largest Chinese cities in 2012

2.7 Summary 41

2.7 Summary

This Chapter compiled the national, provincial, and city’s carbon emission inven-
tories, based on the national and provincial Energy Balance Sheet, sectorial energy
consumption, and Chinese emission factor by the internationally recognized
greenhouse gas inventory compilation method. The national energy-related carbon
emission more than doubled from 1990s to 2010s. There was a gradual increase
during 1995 and 2001, while the increase has been faster since 2002. Among all
fuel types, coal is the major contributor to carbon emission increase. Among all
sectors, thermal electricity generation and industries make the greatest contribution,
accounting for over 80 % of the total increase.
This chapter also calculated the scope 2 carbon emission of four Chinese
municipalities (Beijing, Tianjin, Shanghai, and Chongqing) from 1995 to 2009 and
compared the results to scope 1 emission and the per capita emission from other
international cities. Because of “urban metabolism,” urban areas consume more
electricity and commodities from external sources. Scope 2 emission resulting from
external purchase of electricity is more significant in more developed municipali-
ties. For example, emissions from external electricity purchase account for 25 % of
the total emission in Beijing and Shanghai. Moreover, due to the adjustment of
economic structure and the change in heavy industry location, the scope 1 emission
of municipalities gradually reaches a plateau or even decline. For instance, the
scope 1 energy-related carbon emission of Beijing and Shanghai has decreased
since 2008.
This chapter is an indispensible part of the whole research, as it provides strong
data basis for the follow-up studies.

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Chapter 3
Carbon Emissions from Regions
and Sectors

3.1 Characteristics of China’s Regional Carbon Emissions

China is a country with significant regional differences in terms of technology,

energy mix, and economic development [1]. The distribution of carbon emissions
varies among the 30 mainland provinces (Figs. 3.1, 3.2, 3.3, 3.4 and 3.5). In 2012,
the total carbon emissions were mainly contributed by the eastern coastal regions
such as Shandong and Zhejiang and by the energy-based provinces such as Inner
Mongolia and Shanxi. The provinces such as Inner Mongolia, rich in fossil
resources, have experienced a sevenfold increase in CO2 emissions since 2000. The
emissions increment is also very significant for the other fossil-rich provinces [2].
The total emissions from several of the major provinces are already larger than the
emissions from certain developed countries. For example, if Shandong were to be
considered as a single country, it would be listed as one of the world’s top 5 countries
with a high level of total carbon emissions (more than 800 Mt CO2 per year).
This high level of total emissions can be a result of the high population intensity
and the living standard of the population. However, the CO2 emissions per capita
for the provinces (Fig. 3.1) show a different pattern when compared with the GDP
per capita for the provinces. In general, the developed regions have a high level of
GDP per capita, such as Beijing, Shanghai (Beijing and Shanghai are municipalities
with administrative level equal to provinces), and Zhejiang provinces. In compar-
ison, several of China’s underdeveloped regions have a high level of per capita CO2
emissions, for example, the per capita emissions in Ningxia and Inner Mongolia are
much higher than in the other provinces, and are even higher than the level in the
developed countries such as the USA, the UK, and Japan. For example, the per
capita emissions in Ningxia alone are approaching 20 t CO2/person, which is higher
than the US average and almost three times higher than the E.U. average.

© Springer-Verlag Berlin Heidelberg 2016 45

Z. Liu, Carbon Emissions in China, Springer Theses,
DOI 10.1007/978-3-662-52864-8_3
46 3 Carbon Emissions from Regions and Sectors

Heilongjiang
Xinjiang

Jilin
Gansu
Inner Mongolia
Hebei Liaoning
Beijing
Ningxia
Tibet Qinghai Shanxi
Shandong

Shannxi Henan
Jiangsu
Sichuan
Hubei Anhui Shanghai
Chongqing
Zhejiang
Jiangxi
Guizhou Hunan
Fujian
Yunnan Guangxi Guangdong
Taiwan

Hainan

The South China Sea Islands

Fig. 3.1 CO2 emissions per capita in 2012

The high levels of per capita CO2 emissions in these underdeveloped regions can
be explained by two factors: First, these regions serve as energy and resource bases
which provide the electricity and industrial materials that have been consumed in
other regions. For example, more than one-third of the power generated by Inner
Mongolia is exported to other provinces, and the economic value of Inner
Mongolia’s total export to other provinces is equivalent to about 50 % of the GDP
produced by Inner Mongolia [3, 4]. In comparison, the developed regions are
mainly the consumers and the importers of the electricity and products that are
3.1 Characteristics of China’s Regional Carbon Emissions 47

Fig. 3.2 China provincial carbon emissions during 1995–1998

supplied by underdeveloped regions, for example, one-third of Beijing’s electricity

supply is generated by neighboring regions around Beijing. Second, the carbon
intensity of these underdeveloped regions is much higher than that of the developed
regions, for example, the carbon intensity of Inner Mongolia, Shanxi, and Ningxia
is more than 5 times that of Beijing.
48 3 Carbon Emissions from Regions and Sectors

Fig. 3.3 China provincial carbon emissions during 1999–2002

3.2 The Spatial Autocorrelation of China’s

Carbon Emissions

The spatial distribution pattern is a crucial factor to evaluate environmental, social,

and economic development. The spatial distribution attributes include the location,
quantity, density, and autocorrelation of a spatial unit. According to Tobler’s first
3.2 The Spatial Autocorrelation of China’s Carbon Emissions 49

Fig. 3.4 China provincial carbon emissions during 2003–2006

law of geography, all attribute values on a geographic surface are related to each
other. As the spatial autocorrelation describes the discreteness of a spatial variable, it
is often used to analyze and quantify the spatial distribution, and is crucial to regional
economic and environmental change studies. However, there is lack of studies to
quantify the spatial distribution of China’s regional energy-related carbon emission,
50 3 Carbon Emissions from Regions and Sectors

Fig. 3.5 China provincial carbon emissions during 2007–2008

due to unsound regional carbon emission inventories. Chapter 2 has compiled a

detailed carbon emission inventory, which provides data for relevant studies.

3.2.1 Methodology—Spatial Autocorrelation

Spatial autocorrelation measures the degree of dependency among observation units

in a geographic space. The spatial autocorrelation statistics transform the obser-
vation values to binary symmetric spatial weights matrix W to reflect the geographic
relationships between n locations:
2 3
w11 w12    w1n
6 w21 w22    w2n 7
W ¼6
4 
7 ð3:1Þ
   5
wn1 wn2    wnn

The spatial weights matrix Wij represents the intensity of geographic relationship
between region i and j. Since the spatial attribute (energy-related carbon emission)
in this study is a single value, and the space of each province is different with
irregular shape, the adjacency rule is adopted.
3.2 The Spatial Autocorrelation of China’s Carbon Emissions 51


1 When i and j are spatially linked
wij ¼ ð3:2Þ
0 Others

The spatial correlation index represents the degree of geographical relationship

by a dimensionless value. Moran I index is used in this study:
P P  
n ni¼1 nj¼1 wij ðxi 
xÞ xj 
x
I ¼ Pn Pn Pn ð3:3Þ
i¼1 j¼1 wij xÞ 2
i¼1 ðxi 

I: Moran I index
xi: Attribute value of region i, represented by the energy-related carbon emission
The value of Moran I index ranges [–1, 1], with negative numbers for dis-
creteness, positive number for aggregate, and zero for randomness. Moran I index
can be further standardized as statistical value Z to test the spatial autocorrelation
between n regions.

I  EðIÞ
Z ¼ pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi ð3:4Þ
VARðIÞ

Z: standardized statistical value

E(I): expectation of Moran I index
VAR(I): variance
Positive and notable Z value indicates the positive spatial autocorrelation, rep-
resented by the aggregate of similar observational values (high or low). Negative
and notable Z value indicated the negative spatial autocorrelation, represented by
the discreteness of similar observational values. Zero indicates random distribution
of the observations (Getis and Ord 2010).

3.2.2 Results

ArcGIS is used for analyzing Z value. Regions with high Z value are significant
energy-related carbon emitters, and the surrounding areas are important contributors
as well. On the contrary, regions with low Z value indicate that there is no special
relation between it and the surrounding areas.
Due to low resolution, the provincial carbon inventories cannot fully depict the
temporal and spatial changes in carbon emission. Therefore, the temporal and
spatial extension method is applied to estimate municipal carbon emission based on
the GDP ratio.
52 3 Carbon Emissions from Regions and Sectors

Fig. 3.6 Z value of China city carbon emissions in 2008

Figure 3.6 shows the Z value of Moran I index distribution in 2008 by temporal
and spatial extension method. It is indicated that Jing-Jin-Tang, Pearl River Delta,
and Yangtze River Delta are industrial centers with highest Z values, which are also
China’s carbon emission hotpots.

3.3 Carbon Emissions from Sectors

The national energy-related carbon emission inventory at sectorial level is shown in

Table 3.1. It is clear that heavy industries such as mining, petroleum refining, and
smelting, chemical ingredients and manufacturing, non-metal producing, black
3.3 Carbon Emissions from Sectors 53

Table 3.1 China sectoral emission inventory in 2008

Emissions(Mt CO2)
Agriculture 64.84
Mining industry 319.10
Oil and gas processing industry 38.26
Non-ferrous metal mining and dressing industry 8.48
Ferrous metals mining and dressing 2.76
Non-metallic mining and dressing industry 13.38
Other mining and dressing industry 0.08
Timber and mining transport industry 0.00
Food processing industry 30.41
Food production industry 20.26
Beverage industry 15.66
Tobacco industry 1.97
Textile industry 46.71
Clothing and other fiber products industry 5.84
Leather, fur, feather, and related products 2.64
Wood processing and products 8.22
Furniture manufacturing 1.28
Paper and paper products industry 66.41
Printing, reproduction of recording media 1.69
Cultural, educational, and sporting goods manufacturing industry 1.29
Petroleum processing and coking industry 490.14
Chemical materials and chemical products manufacturing 478.84
Pharmaceutical manufacturing 14.10
Chemical fiber manufacturing industry 15.39
Rubber production 9.45
Plastic products industry 8.56
Non-metallic mineral products industry 1189.89
Ferrous metal smelting and rolling industry 1478.40
Non-ferrous metal smelting and rolling industry 90.20
Fabricated metal products 13.23
Ordinary machinery 28.32
Special equipment manufacturing 18.06
Transportation equipment manufacturing 26.94
Electrical machinery and equipment manufacturing 8.40
Electronic and communication equipment manufacturing 8.60
Instrumentation and culture, office machinery manufacturing 1.24
Other manufacturing 10.08
Electricity, steam, hot water production, and supply industry 2486.05
Production and supply 26.47
(continued)
54 3 Carbon Emissions from Regions and Sectors

Table 3.1 (continued)

Emissions(Mt CO2)
Tap water production and supply 0.86
Building industry 29.39
Transport, storage, and communications sector 426.30
Wholesale, retail trade, and catering 42.74
Other tertiary industry 102.75
Consumption of urban residents 150.96
Consumption of rural residents 125.20

metal smelting, color metal smelting, and the production and supply of heat, steam,
and hot water accounted for over 80 % of the total emission. Using the same
approach, this study compiled a detailed energy-related carbon emission inventory
for 46 industrial sectors of 30 provinces in 2008.
The provincial distribution pattern (Fig. 3.7) of carbon emission among different
sectors is similar to that of national pattern. Energy supply (power and heat) is the
largest contributor to total emission, followed by metal and non-metal manufac-
turing, and metal processing. The combined contribution of three aforementioned
sectors accounts for more than 70 % of the total emission in most provinces
(Fig. 3.8).

800

600
Unit: Mt CO2e

400

200

0
Hainan

Shanghai

Guangdong
Guizhou

Fujian

Liaoning
Qinghai
Ningxia

Gansu

Heilongjiang

Anhui
Beijing

Inner Mongolia

Shandong
Xinjiang
Jiangxi

Jilin
Guangxi

Henan
Yunnan

Shannxi

Hebei
Jiangsu
Hunan

Zhejiang
Shanxi
Hubei
Sichuan
Chongqing
Tianjing

Comerical industry and other services

Transportation
Construction
power Generation
Machinery
Smelting
Nonmetal and Metal Production

Fig. 3.7 China provincial sectorial carbon emissions in 2008

3.3 Carbon Emissions from Sectors 55

Carbon Intensity: tCO2e/10,000 Yuan

Carbon per Capita: tCO2e/Person

Inner…
Xinjiang

Yunnan

Guangdong
Qinghai

Jiangxi

Shaanxi

Anhui
Guizhou

Hubei
Hunan
Beijing

Shanxi
Fujian

Heilongjiang

Henan

Jiangsu
Hebei
Hainan

Ningxia

Gansu
Tianjin
Chongqing

Guangxi

Shanghai

Jilin

Sichuan

Liaoning

Shandong
Zhejiang
Fig. 3.8 Carbon emission intensity, per capita emission, and total emission in China provinces in
2009

3.3.1 Carbon Intensity for Sectors

The emission intensity is the carbon emission per gross domestic product (GDP).
Sectorial GDP contribution is obtained from China Statistical Yearbook and China
Economic Census Yearbook (price converted to constant prices using the base year
producer price). As the energy consumption sectors did not match the GDP pro-
ducing sectors, they are adjusted and recombined into 28 carbon emission con-
tributors (Table 3.2).
Apparently, huge disparities exist among the provincial distribution of total
emission, emission intensity, and per capita emission. Developed eastern coastal
regions (such as Guangdong, Zhejiang, and Jiangsu) have higher total emissions and
per capita emissions, but with relatively lower emission intensity. Those
middle-leveled regions (such as Hebei, Inner Mongolia, and Shanxi) have both
higher total emissions and emission intensity because their economic activities are
dominated by intensive resource mining (primary energy) and other heavy indus-
tries. Those least developed Western regions (such as Qinghai and Ningxia) have
lower total carbon emissions, but higher per capita emissions and emission intensity.
By grouping 28 sectors into 12 industries, results show that “non-metal and
metal production,” “smelting and machinery,” and “power generation” sectors are
three main contributors for total carbon emission. Particularly, provinces located
within industrial clusters (such as Shandong and Hebei) have higher proportion of
carbon emission from manufacturing-related sectors, especially from the sector of
“non-metal and metal production” and sector of “smelting.” Both Shanxi and Inner
Mongolia are energy source-rich areas (especially coal) and have provided a large
amount of electricity to their neighboring provinces, thus having higher proportions
of carbon emission from power generation sector.
56 3 Carbon Emissions from Regions and Sectors

Table 3.2 Sectoral classification for carbon emission inventories

Level 1 Level 2 Level 3 (sector code + sector name)
Agriculture Agriculture 1. Agriculture
Manufacturing Mining 2. Coal mining and dressing
3. Petroleum and natural gas extraction
4. Metals mining
5. Non-metal mining
Food production 6. Food, drinks and tobacco
Textile, paper, and wood 7. Textile industry
industry 8. Wearing
9. Forest industry
10. Papers
Petroleum and chemical 11. Petroleum processing and coking
industry 12. Chemicals
Non-metal and metal 13. Non-metal mineral products
production 14. Metal products
Smelting 15. Smelting
Machinery 16. Machinery
17. Transportation equipment
18. Electric equipment and machinery
19. Electronic and telecommunications
equipment
20. Instruments, meters, cultural, and office
machinery
21. Other manufacturing industry
Power generation 22. Production and supply of electric power,
steam, and hot water
23. Production and supply of gas
24. Production and supply of tap water
Construction Construction 25. Construction
Transportation Transportation 26. Transportation, storage, post, and
telecommunication services
Commercial Commercial industry and 27. Wholesale, retail trade, and catering
industry other services services
28. Others

Most importantly, emission intensity illustrated significant disparity of tech-

nology level among regions (Table 3.3). The emission intensity in underdeveloped
regions is much higher than that in more developed regions, especially in heavy
industries. For example, emission intensity of Chemistry (No. 12) production in
Hainan is more than twenty times higher than that of in Beijing. Another case in
Table 3.3 Intensity of China provincial carbon emission inventories in 2009 (unit: t CO2/10,000 RMB)
Sector No. Anhui Beijing Chongqing Fujian Gansu Guangdong Guangxi Guizhou Hainan Hebei Heilongjiang Henan Hubei Hunan
1 0.68 0.18 0.53 0.18 0.21 0.09 0.03 0.31 0.20 0.05 0.27 0.09 0.23 0.20
2 0.14 0.01 0.65 0.32 0.21 0.00 0.02 0.95 0.00 0.20 0.61 0.42 0.02 0.07
3 0.00 0.12 0.15 0.00 0.05 0.34 0.00 0.00 0.00 0.19 0.13 0.55 0.44 0.00
4 1.28 0.05 0.08 0.10 0.06 0.02 0.08 0.19 0.12 0.12 0.03 0.04 0.89 0.14
5 1.12 0.04 0.69 0.10 0.16 0.08 0.13 0.05 0.07 0.10 0.10 0.06 0.34 0.86
6 0.34 0.09 0.07 0.10 0.20 0.11 0.30 0.16 0.05 0.21 0.14 0.23 0.19 0.13
7 0.11 0.03 0.23 0.09 0.10 0.13 0.05 0.01 0.05 0.08 0.05 0.12 0.07 0.10
8 0.05 0.10 0.02 0.03 0.05 0.12 0.02 0.01 0.00 0.05 0.00 0.07 0.07 0.04
9 0.25 0.06 0.07 0.16 0.08 0.06 0.29 0.14 0.08 0.17 0.24 0.34 0.19 0.87
3.3 Carbon Emissions from Sectors

10 0.69 0.06 0.43 0.30 0.18 0.27 0.74 0.21 0.70 0.33 0.20 0.70 0.27 0.73
11 0.05 0.32 0.49 0.40 0.98 0.13 0.02 3.59 0.05 0.28 1.62 0.53 0.16 0.52
12 0.16 0.07 0.80 0.20 0.21 0.05 0.48 0.19 1.66 0.31 0.72 0.36 1.05 0.48
13 6.42 1.06 4.03 2.87 3.85 2.67 8.70 6.60 10.73 2.74 7.08 1.92 4.94 5.29
14 0.89 0.50 0.75 1.68 2.23 0.35 1.67 1.74 1.25 2.44 0.96 1.00 3.45 1.50
15 0.02 0.02 0.05 0.02 0.03 0.07 0.06 0.28 0.04 0.06 0.03 0.13 0.08 0.14
16 0.05 0.04 0.07 0.03 0.14 0.02 0.01 0.02 0.01 0.09 0.17 0.12 0.15 0.08
17 0.03 0.04 0.03 0.02 0.10 0.02 0.02 0.08 0.00 0.07 0.07 0.27 0.22 0.07
18 0.03 0.01 0.01 0.01 0.07 0.03 0.01 0.00 0.01 0.04 0.02 0.13 0.08 0.08
19 0.00 0.00 0.00 0.00 0.05 0.01 0.00 0.00 0.01 0.03 0.00 0.05 0.01 0.06
20 0.00 0.01 0.02 0.00 0.00 0.01 0.00 0.00 0.00 0.04 0.02 0.05 0.02 0.04
21 0.03 0.14 0.03 0.02 0.02 0.09 0.01 0.05 0.00 0.01 2.16 0.14 0.09 0.03
22 13.79 2.47 3.95 5.73 6.77 3.27 3.47 9.30 7.56 6.79 9.63 9.10 7.16 5.35
23 0.33 0.41 0.03 0.49 6.52 0.14 0.06 0.59 11.23 1.22 3.96 0.08 0.02 0.02
24 0.35 0.30 0.02 0.32 0.05 0.81 0.34 2.90 0.01 0.09 0.00 11.38 0.01 0.03
25 0.05 0.06 0.06 0.06 0.28 0.02 0.02 0.08 0.04 0.04 0.01 0.02 0.16 0.05
26 0.27 0.29 0.82 0.49 0.83 0.82 1.09 1.03 1.23 0.28 0.80 0.52 1.17 0.85
27 0.04 0.09 0.10 0.07 0.16 0.11 0.12 1.04 0.15 0.12 0.40 0.04 0.50 0.47
28 0.07 0.12 0.05 0.08 0.03 0.13 0.16 0.45 0.12 0.11 0.24 0.01 0.15 0.10
57

(continued)
Table 3.3 (continued)
58

Sector Inner Jiangsu Jiangxi Jilin Liaoning Ningxia Qinghai Shandong Shanghai Shaanxi Sichuan Tianjin Xinjiang Yunnan
No. Mongolia
1 0.36 0.12 0.11 0.1 0.18 0.15 0.17 0.08 0.06 0.1 0.12 0.2 0.27 0.24
2 0.95 0.44 0.47 0.33 0.89 0.43 1.95 0.19 0 0.14 1.1 0 2.93 1.34
3 0.16 0.05 0 0.48 0.27 0 0 0.08 0 0.5 0.87 0.18 0.18 0
4 0.18 0.02 0.07 0.34 0.22 0 0.03 0.16 0 0.07 0.56 0 0.49 0.24
5 0.34 0.23 0.32 0.39 0.21 0.01 0.58 0.13 0 0.05 0.81 0.52 0.84 1.4
6 0.42 0.1 0.24 0.66 0.15 0.59 0.11 0.18 0.04 0.15 0.34 0.1 1.12 0.15
7 0.11 0.09 0.05 0.04 0.1 0.02 0.14 0.24 0.05 0.1 0.59 0.06 0.22 0.11
8 0.04 0.11 0.02 0.02 0.13 0.04 0 0.14 0.04 0.01 0.17 0.07 0.03 0.02
9 0.48 0.33 0.06 2.13 0.29 0.03 0 0.83 0.04 0.01 0.41 0.09 0.39 0.27
10 0.45 0.38 0.16 0.64 0.25 2.23 0.01 0.49 0.06 0.49 1.14 0.1 0.78 0.44
11 0.72 0.17 0.34 0.09 0.41 1.84 0.71 0.41 0.46 0.76 3.82 0.33 0.87 0.87
12 0.35 0.19 0.03 0.34 0.35 1.21 0.59 0.31 0.03 0.07 0.79 0.13 0.09 0.04
13 3.5 2.76 7.53 5.78 2.46 8.77 4.89 2.39 0.44 3.73 7.62 0.78 7.09 10.45
14 1.68 0.83 1.76 1.62 2.04 1.29 1.73 1.11 0.69 0.91 1.45 0.92 1.53 1.43
15 0.06 0.07 0.05 0.06 0.11 0.06 0.09 0.1 0.04 0.02 0.11 0.06 0.06 0.03
16 0.08 0.08 0.02 0.05 0.12 0.06 0.17 0.14 0.03 0.05 0.16 0.04 0.03 0.02
17 0.02 0.04 0.05 0.09 0.09 0 0 0.1 0.02 0.09 0.26 0.03 0.02 0.01
18 0.19 0.03 0.02 0.03 0.08 0.03 0.71 0.19 0.01 0.02 0.07 0.01 0.03 0.01
19 0 0 0.01 0.03 0.01 0 0 0.04 0 0.06 0.02 0 0.8 0
20 0 0.01 0.01 0.04 0.02 0.08 0 0.06 0 0.03 0.02 0 0.01 0.01
21 0.03 0.01 0.04 0.07 0.13 0 0.04 0.1 0.01 0.11 0.37 0.03 0 0.03
22 21.45 7.7 3.77 7.92 9.03 14.26 5.76 8.55 4.74 10.49 5.43 5.77 21.56 8.32
23 0.23 5.93 0.16 0.06 0.1 1.58 0.19 0.33 0.69 0.16 0.94 0.1 0.9 0.19
(continued)
3 Carbon Emissions from Regions and Sectors
Table 3.3 (continued)
Sector Inner Jiangsu Jiangxi Jilin Liaoning Ningxia Qinghai Shandong Shanghai Shaanxi Sichuan Tianjin Xinjiang Yunnan
No. Mongolia
24 4.26 1.23 0.03 0.21 1.25 0 0 3.07 0.9 0.02 0.73 0.01 0.05 2.24
25 0.11 0.03 0.01 0.03 0.04 0.09 0.07 0.06 0.11 0.04 0.06 0.08 0.09 0.09
26 1.01 0.52 0.5 0.84 1.18 1.06 1.04 0.88 0.76 1.03 1.08 0.2 1.38 1.22
27 0.78 0.02 0.07 0.18 0.06 0.25 0.42 0.3 0.14 0.27 0.14 0.12 0.19 0.13
28 0.18 0.06 0.09 0.21 0.13 0.13 0.27 0.15 0.06 0.19 0.02 0.09 0.16 0.09
3.3 Carbon Emissions from Sectors
59
60 3 Carbon Emissions from Regions and Sectors

Inner Mongolia which is one of China’s provinces concentrated with energy supply
industries, the emission intensity of its electricity is about six times of that in
Jiangxi province and five times of that in Shanghai. Similar pattern can be seen in
other sectors, while underdeveloped provinces generally have much higher emis-
sion intensity for the industrial sectors.
Based on the 2008 China Economic Census Yearbook, we can compile the
sectorial carbon emission intensity in 2008, and estimate the emission intensity data
for 2009.
On comparison of the emission intensity and per capita emission of 30 provinces
in 1997 and 2009, there was a dramatic increase in the per capita emission in Inner
Mongolia, Shanxi, Ningxia, and Shandong. One major reason for this is that these
regions rely heavily on energy engineering and manufacturing in developing pro-
cess. The energy intensity of most provinces experienced a sharp decrease over the
same period, especially more developed areas such as Beijing, Tianjin, and
Shanghai. However, Shanxi, Inner Mongolia, Ningxia, and Xinjiang have experi-
enced an increase in emission intensity by 2009. The low-value-added and
emission-intensive developing path will result in enormous environmental impacts
and resource pressure in these underdeveloped areas.
It is clear from Table 3.3 that thermal electricity generation and the traditional
heavy industries are among the most significant contributors, with the emission
intensity of thermal electricity generation reaching 20 t/10000 Yuan (GDP) at some
provinces. There was a huge difference between provinces when conducting a
comparative analysis. The emission intensity in underdeveloped areas is more
significant than that in more developed areas, especially for carbon-intensive
industries. For example, the emission intensity of thermal electricity generation in
Inner Mongolia is six times larger than that in Shanxi and five times larger than that
in Shanghai.
From sectorial perspective, non-metal manufacturing, metal pressing, and ther-
mal electricity generation are industries with the highest carbon emission.
Regionally, Shanxi and Inner Mongolia possess abundant coal resources and thus
are the major energy supply sources. Therefore, the emission intensity in their
energy sectors is significantly higher.
Guangdong, Zhejiang, and Jiangsu have higher total carbon emission, but with
their larger GDP, their emission intensity is relatively low. Hebei, Inner Mongolia,
and Shanxi have high total carbon emission and emission intensity simultaneously,
as they rely heavily on energy industries and energy-intensive industries. The GDP
of underdeveloped regions such as Qinghai and Ningxia are smaller. Although they
have lower total carbon emission, the per capita emission and emission intensity are
higher.
3.4 The Embodied Energy Consumption and Carbon … 61

3.4 The Embodied Energy Consumption and Carbon

Emissions from China’s Industrial Sectors

It will be crucial to study how different industrial sectors use energy for their
operations so that appropriate national regulations and standards can be enacted to
promote energy-efficient production. Therefore, a comprehensive analysis of energy
consumption is required, which should not only focus on the direct energy con-
sumption activities but also consider the indirect activities potentially causing
energy consumption throughout the whole supply chain, namely, the embodied
energy consumption (direct plus indirect) perspective [5–7]. One sector’s embodied
energy consumption includes both energy consumption caused by final demand
(direct energy consumption) and energy consumption caused by other sector’s
activities throughout the supply chain (indirect energy consumption) [8]. The
embodied energy consumption provides a complete picture that not only considers
the direct energy consumption primarily due to final demand but also identifies the
drivers of the energy consumption and quantifies the amount of energy usage for
which every sector is responsible [6, 9]. Hence, it is critical for policy makers to
understand how embodied energy consumption occurs along the entire supply
chain. This requires an integrated analysis so that an appropriate energy manage-
ment policy for industrial sectors can be adopted.
In this section, the embodied energy consumption among China’s 29 industry
sectors was estimated by using an extended environmental input–output analysis.
First, we selectively review the method of our input–output analysis. Then, we
quantify and present the embodied energy consumption for 29 industrial sectors in
China’s economic system. Finally, we discuss the policy implications for sectoral
energy conservation policy before drawing our conclusions.

3.4.1 Methodology—Environmental Extend Input–Output

Model (EIO)

A comprehensive analysis of energy consumption in industry supply chains

requires an appropriate method that does not only focus on the energy consumption
due to final demand of one single industrial sector but also consider the use of
energy in intermediate production processes by other industrial sectors that are
included in the supply chain. The standard Leontief input–output (I–O) model has
been extended to the so-called environmental extend input–output model (EIO) to
capture energy consumption flows in the economy [9, 10]. EIO describes the energy
consumption required to produce a unit of economic output (goods and services)
driven by final demand. This tool allows the calculation of the direct energy con-
sumption by a sector’s final demand as well as all indirect energy consumption
from other sectors within the same supply chain [11, 12]. This “top–down”
approach for assessing environmental impacts of the whole economy has been
62 3 Carbon Emissions from Regions and Sectors

widely applied for national energy analyses after the energy crisis in the early 1970s
[9, 13, 14]. Interactions between economic activities, the associated direct and
indirect energy consumption, and related environmental impacts can be explicitly
determined by the input–output relationship described by Leontief and its extension
to cover environmental impacts, e.g., [11, 15–20]. The input–output analysis has
been extended to cover interregional and international trade in multi-regional
input–output models (MRIO) [9, 13, 21–23]; this type of model has been used to
analyze international embodied energy consumption and related CO2 emissions
inventories in the context of the Kyoto Protocol from the perspective of either
consumers of goods and services or producers. For a single system boundary,
energy consumption associated with the production process comprises the pro-
duction entity (the production energy consumption) and the total energy con-
sumption in its production activity (the embodied energy consumption). Several
scholars have conducted their studies of embodied energy consumption in pro-
duction activities in China. For example, Lin and Polenske explained energy
consumption changes between 1981 and 1987 in China by analyzing effective
changes in the production technologies as well as the final demand shift on the
consumer side [14]. Liu et al. [24] conducted an energy input–output analysis in
China to evaluate the indirect energy consumption of rural and urban households
and studied how energy policies influenced final prices; they concluded that energy
efficiency improvements not only served as a means to reach energy conservation
goals but also had a positive impact on household income. Another example of
studying the embodied energy in the supply chain of one single sector is the
Polenske and McMichael analysis of the environmental impacts of the coke-making
process in China by using an input–output process model [25]; they discovered
changes in the production technology of the supplying sectors and the subsequent
impacts. Similar studies were also conducted by Liang et al. [26].
This study used the most recently available input–output tables (2007) and
constructed the EIO model to reveal China’s sectoral embodied energy consump-
tion; the study focuses on China’s sectoral direct and indirect energy consumption
and considers the related policy implications for energy conservation and efficiency
in the national 5-Year Plan.
The EIO model captures the energy consumption of each economic sector from
supply chain perspectives. The total output of one economy is expressed:

X ¼ Z þ y ¼ AX þ y ð3:5Þ

X represents total economic output, which can be expressed as a vector; Z represents

the intermediate demand matrix; y represents the final demand vector, including the
components of “rural and urban households consumption,” “government con-
sumption,” “gross capital formation,” “export,” and “others”, and A represents the
economy’s direct demand matrix. Matrix A describes the relationship between all
sectors of the economy. Assuming that (I − A) is non-singular, then the total
economic output vector X can be expressed by Eq. (3.6):
3.4 The Embodied Energy Consumption and Carbon … 63

X ¼ ðI  AÞ1 y ð3:6Þ

I represents the identity matrix, (I − A)−1 is the Leontief inverse. Equation (3.2)
illustrates the gross output needed to satisfy both the final consumption “y” and the
corresponding intermediate consumption “(I − A)−1” from each economic sector.
The EIO method combines the economic IO model with sectoral environmental
impacts by multiplying the total economic output by each sector’s energy intensity
(energy consumption per unit economic output from each sector i). The total (both
direct and indirect) energy consumption can be expressed by Eq. (3.7):

E ¼ FX ¼ Fy þ FAy þ FA2 y þ FA3 y þ FA4 y. . . ¼ F ðI  AÞ1 y ð3:7Þ

E represents the matrix of the total embodied energy consumption; F represents the
factor vector of the energy intensity for each sector. Fy is the direct energy con-
sumption due to final demand, FAy is the first round of indirect energy consumption
due to intermediate industrial activities. FA2y, FA3y, FA4y… (infinite recursive
reduction series of FAjy) are the second, third, fourth,… round indirect energy
consumption of intermediate activates. F can be calculated by Eq. (3.8):

Fi ¼ Di =Xi ð3:8Þ

Fi represents the intensity factor of sector i; Di represents the production energy

consumption for sector i; Xi represents the total economic output from sector i.
In this study, we adopted the most recently available input–output table, namely
the one for the year of 2007 [27], covering 42 economic sectors in total. Production
energy consumption data from each sector were extracted from the Chinese Energy
Statistics Year Book (CESYB) [28]. The input–output table is available at 42
industrial sectors details, while the energy consumption data have 29 sectors. We
aggregate the 42 economic sectors into 29 sectors to keep the two datasets con-
sistent. Table 3.4 presents the 29 sectors classification and more aggregated sector
group. This classification principle has been widely used in IO-based energy and
carbon footprint research in China [29–31]. Based on Eq. (3.5), A is a matrix with
29*29 elements, Y^ is a diagonal matrix with the values of final energy demand
along its diagonal, F is a column vector with energy intensity data of 29 sectors.

3.4.2 Results of Embodied Energy Consumption

Figure 3.9 depicts the comparison results between production-based energy con-
sumption and embodied energy consumption for 6 industrial groups, and Fig. 3.10
depicts the comparison results for 29 economic sectors.
In this study, a system boundary was chosen according to China’s territorial
boundary, and energy embodied in imports was not included (excluded in the final
64 3 Carbon Emissions from Regions and Sectors

Table 3.4 Sectors classification

Group Group Sectoral Sector
code code
A Agriculture 1 Farming, forestry, animal husbandry, fishery, and
water conservancy
B Mining 2 Coal mining and dressing
3 Petroleum and natural gas extraction
4 Ferrous metals mining and dressing
5 Other metals mining and dressing
C Manufacturing 6 Food processing, food production, beverage
production, tobacco processing
7 Textile
8 Garments and other fiber production, leather, furs,
down, and related production
9 Timber processing, bamboo, cane, palm and straw
production, furniture manufacturing
10 Paper printing and educational and sports goods
production
11 Petroleum processing and coking, gas production,
and supply
12 Raw chemical materials and chemical production,
medical and pharmaceutical production, chemical
fiber, rubber production, plastic production
13 Non-metal mineral production
14 Smelting and pressing of ferrous and non-ferrous
metals
15 Metal products
16 Ordinary and special equipment
17 Transportation equipment
18 Electric equipment and machinery
19 Electronic and telecommunications equipment
20 Instruments, meters, cultural, and office machinery
21 Other industrial activities
22 Waste production
D Power and 23 Electricity power/heating supply
heating supply 24 Gas-fire supply
25 Hot water production and supply
E Construction 26 Construction
F Tertiary 27 Transport, storage, postal, and telecommunications
industry services
(service) 28 Wholesale, retail trade, hotels, catering service
29 Other service activities
3.4 The Embodied Energy Consumption and Carbon … 65

Production Energy Use Embodied Energy Use

Fig. 3.9 Production-based energy consumption (extracted from the CESYB) and embodied
energy consumption (calculated by the EIO model) from 6 sector groups (Units: Mt SCE)

Production Energy Use Embodied Energy Use

Fig. 3.10 Production-based energy consumption and embodied energy consumption for 29
economic sectors (Units: Mt SCE)

demand Y); thus, the sum of all sector’s production-based energy consumption and
the sum of their embodied energy consumption are equal. The embodied energy
consumption for each sector was the energy consumption reallocated through this
sector’s supply chain; thus, significant differences exist between production-based
energy consumption and embodied energy consumption for 6 groups and 29 sec-
tors. From Fig. 3.9, it is very clear that the “Manufacturing” (Group C) industry
was the main contributor to total production-based energy consumption, while
“Manufacturing” (Group C), “Construction” (Group E), and “Service Industry”
(Group F) were the three main contributors to total embodied energy consumption.
66 3 Carbon Emissions from Regions and Sectors

Particularly, the “Manufacturing” (Group C) industry dominated both

production-based energy consumption and embodied energy consumption,
accounting for 65.8 % of the total amount of production-based energy consumption
and 50.4 % of total amount of embodied energy consumption.
With respect to the 29 economic sectors (Fig. 3.10), the sectors of “Petroleum
Processing and Coking, Gas Production and Supply” (No. 11), “Raw Chemical
Materials and Chemical Production, Medical and Pharmaceutical Production,
Chemical Fiber, Rubber Production, Plastic Production” (No. 12), “Nonmetal
Mineral Production” (No. 13), “Smelting and Pressing of Ferrous and Nonferrous
Metals” (No. 14), “Electricity Power/Heating Supply” (No. 23), and “Transport,
Storage, Postal and Telecommunications Services” (No. 27) are the greatest con-
tributors to the total production-based energy consumptions, accounting for 70 %
of the total production-based energy consumption. Each of these sectors accounts
for 5.8, 15.3, 7.55, 25.0, 7.9, and 8.0 % of total production-based energy con-
sumption, respectively. Meanwhile, the sector of “Construction” (No. 26) is the
largest contributor of the total embodied energy consumption (26.1 %), followed by
“Other Service Activities” (No. 29) (12.4 %), “Ordinary and Special Equipment”
(No. 16) (7.5 %), “Electronic and Telecommunications Equipment” (No. 19)
(6.4 %), “Transportation Equipment” (No. 17) (6.0 %), and “Electric Equipment
and Machinery” (No. 18) (5.4 %).
Embodied energy consumption from 29 sectors further decomposed into direct
energy consumption and indirect energy consumption (Fig. 3.11).
The results indicated that indirect energy consumption accounts for 80 % of the
total embodied energy consumption. Particularly, the “Construction” sector has the
largest amount of embodied energy consumption, with approximately 95 % of its
embodied energy consumption allocated into indirect energy consumption.
To further explore the energy consumption features of typical economic sectors,
three sectors were chosen for more a detailed analysis of embodied energy con-
sumption. Based on Eq. (3.3), the embodied energy consumptions of the

1000

800

600

400

200

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Direct Energy Use Indirect Energy Use

Fig. 3.11 Direct and indirect energy consumption for 29 sectors’ final demand (Units: Mt SCE)
3.4 The Embodied Energy Consumption and Carbon … 67

Fig. 3.12 Embodied energy consumption for the “Construction” sector (Units: Mt SCE)

“Construction” sector (No. 26), the “Other Service Activities” sector (No. 29), and
the “Ordinary and Special Equipment” sector (No. 16) have been presented in
Figs. 3.12, 3.13 and 3.14, respectively.

Fig. 3.13 Embodied energy consumption for the “Other Service Activities” sector (Units: Mt
SCE)
68 3 Carbon Emissions from Regions and Sectors

Fig. 3.14 Direct and indirect energy consumption for the “Ordinary and Special Equipment”
sector (Units: Mt SCE)

The results showed that the indirect energy consumptions from these three
sectors were mainly caused by energy consumptions from their
upstream/downstream sectors, especially from the sectors of “Raw Chemical
Materials and Chemical Production, Medical and Pharmaceutical Production,
Chemical Fiber, Rubber Production, Plastic Production” (No. 12), “Nonmetal
Mineral Production” (No. 13), “Smelting and Pressing of Ferrous and Nonferrous
Metals” (No. 14), “Electricity Power/Heating Supply” (No. 23), and “Transport,
Storage, Postal and Telecommunications Services” (No. 27). Because the sectors of
No. 12, 13, and 14 are typical heavy industrial and energy-intensive sectors, the
higher proportion of embodied energy consumption in “Construction” and “Other
Service Activities” can be explained by the intermediate activities’ energy con-
sumption from those energy-intensive sectors.

3.4.3 Discussion and Policy Implications of Embodied

Energy Consumption

By employing the EIO method, our study results provided an innovate perspective
for explaining the rapid growth of “energy-intensive” sectors in China. While heavy
industries such as smelting and pressing of metals are typical energy-intensive
sectors and have higher level of production-based energy consumption, sectors such
as “Construction” (No. 26) have relatively higher embodied energy consumptions
and should be considered energy-intensive sectors from a supply chain perspective.
By uncovering the supply chain energy consumption for a single sector, our
results illustrated that those heavy industrial sectors and the relevant energy supply
3.4 The Embodied Energy Consumption and Carbon … 69

sectors along upstream/downstream supply chains are the main contributors of the
high embodied energy consumption for sectors such as “Construction.”
Consequently, the supply chain energy consumptions contribute to higher values of
the embodied energy consumption of certain sectors.
Given the above information, it is necessary to find appropriate explanations for
such phenomenon. First, China’s soaring economy has been primarily driven by
infrastructure construction and capital investment [32, 33]. Such a strategy has been
effective in maintaining China’s rapid GDP growth even during the global eco-
nomic recession [34]. Based on the Chinese official statistics [35], capital invest-
ment had contributed to 45 % of the annual GDP growth during 2000–2007,
whereas household consumption and exports had contributed to 30 and 25 %,
respectively. Capital investment creates market demand for the large-scale pro-
duction expansion of cement, steel, and other highly energy-intensive materials as
well as demand for the associated electricity generation to support such production
[32, 36, 37]. For example, the average annual growth rate of cement output was
10.7 % from 1985 to 2010. In 2010, China’s cement output was 1.87 billion metric
tons, accounting for 56 % of the world’s total cement production [38]. Similarly,
China’s steel production had increased from 152 million tons in 2001 to 695.5
million tons in 2011, accounting for 45.5 % of the world’s total steel production
[39]. Most of the cement and steel were consumed by the supply chain of the
“Construction” sector, resulting in this sector being the most intensive sector for
embodied energy consumption. Thus, the supply chain demand of such sectors
caused very large amounts of production activity in heavy industries; in other
words, these sectors are also “energy intensive”, but energy consumption is con-
centrated in supply activity rather than their direct production for final demand.
Secondly, a sector’s classification limited the analysis of the energy consumption
in the supply chain. Because of the mismatch between sectoral classifications in
China’s IO tables and the classifications in sectoral energy consumption, we merged
similar sectors in this study for consistency between the sectors in IO and the
sectors in the energy consumption data; the aggregated sectoral classification
contains 29 sectors. Thus, several subsectors may be merged together and some
sectors may contain too many sectoral activities, especially “Other Service
Activities,” for which activities that do not belong to other sectors are all contained
within in it. Such classifications of energy consumption sectors have been already
widely used for IO-related research in China. For example, a classification of 24
sectors was proposed by Chang [30], 26 sectors were proposed by Chen [29], and
29 sectors were proposed by Zhang [31]; the sectoral aggregation and disaggre-
gation were also discussed by Kahrl and Roland [40] as well as by Chen [29].
Given the scale and proportion of the embodied energy consumption from these
sectors, the uncertainty brought about by such simplification cannot negate the
result that China’s construction and service sectors are actually energy intensive
when considering their embodied energy consumption. However, such uncertainty
cannot be ignored, especially when the EIO model is coupled with life cycle
analysis [41]. Because the CESYB is the only official and open published data
source which contains China’s sectoral detailed energy consumption, it is
70 3 Carbon Emissions from Regions and Sectors

impossible to directly improve the data quality based on current statistics system;
thus, we encourage any effort of further disaggregation of sectoral energy con-
sumption and improvement in the data quality of China’s energy statistics from
different sources in the future.
Generally, current Chinese energy conservation policies focus on
production-based energy consumption; thus, heavy industries received a lot of
attention for their energy-saving efforts. For example, during the 11th 5-Year Plan,
energy-saving targets for China’s 1000 highest energy-consuming enterprises were
arranged by the NDRC, aiming to save approximately 2.9 EJ of energy con-
sumption during 2006–2010 [42]. In 2010, factories with production capacities of
10 million kWh of power generation, 6 million tons of steel, and 25 million tons of
iron were closed [43, 44]. Additionally, more ambitious plans have been prepared
to improve energy efficiency of 17 heavy industrial sectors (such as cement, iron,
and steel) during the 12th 5-Year Plan (2011–2015). However, current policy
overlooks the supply chain of those heavy industries. The continuous expansion of
those industries would result in multiple increase in energy demand by their
upstream suppliers. This would further lead to higher energy consumption for the
whole economy [45]. Thus, energy-saving measures and efficiency improvement
policies should not only consider the traditional heavy industries but also pay
attention to the relevant sectors along their supply chains. An integrated policy
approach should be employed instead of only addressing energy efficiency issues in
several individual sectors. Such integrity requires that policy makers integrate
energy supply management, energy demand management, energy efficiency man-
agement, and energy-related emission management throughout the whole supply
chain. Moreover, policy makers should seek new economic growth strategies, rather
than only relying on infrastructure construction and capital investment. For
instance, increasing investment in education service and technological innovation
aspects could be helpful for long-term economic growth and the adjustment of the
economic structure.
With respect to the “bottom-up” implementation of such energy-saving and
efficiency improvement policies, different strategies should be adopted based on a
certain sector’s energy consumption features. For those heavy industries such as
thermal power generation and smelting metal, efforts should focus on the
improvement of their efficiency through cleaner production, energy audits, tech-
nology updates, compulsory phaseout/shutdown of inefficient and backward man-
ufacturing facilities, capacity-building programs on energy-saving awareness, etc.
For those sectors with higher embodied energy consumptions such as the con-
struction sector, efforts should focus on addressing their supply chain energy
consumption, such as greening their supply chain and controlling the irrational final
demand. Market-based instruments, such as sectoral financial subsidies, preferable
tax rates, and low interest bank loans, should be employed so that the energy
consumption along the supply chain can be adjusted according to their final demand
and consumption.
3.5 Summary 71

3.5 Summary

This chapter established a detailed sectorial energy-related carbon emission

inventory for 46 industries, calculated the carbon emission intensity of 28 industrial
sectors of 30 provinces in 2009, and compared the sectorial coefficient of variance
of the carbon emission intensity.
The study indicates that the carbon emission intensity is higher in traditional
heavy industries and thermal electricity generation. The calculated sectorial carbon
emission intensity and per capita emission reveal that the emission intensity of
less-developed areas is higher than that of more developed areas. While most
provinces saw a decrease in emission intensity during 1997 and 2009, Shanxi, Inner
Mongolia, Ningxia, and Xinjiang experienced increases in emission intensity in
2009 compared with the emission intensity in 1997. The per capita emission
increased in all provinces during the same period, with the most increase occurring
in Inner Mongolia, Shanxi, Ningxia, and Shandong. The emission-intensive and
energy-intensive developing path will pose enormous pressure on the local envi-
ronment and resources in the less-developed areas.
Spatial and temporal differences in emission intensity and per capita emission
are quantified by coefficient of variance (CV) analysis. The variability in provincial
emission intensity is more significant than that in provincial per capita emission.
The difference mainly stems from the gap between carbon emission intensity
between coastal and inland areas. The emission intensity in some underdeveloped
areas is dozens of times higher than that in developed areas. Therefore, how to
achieve low-carbon development pattern becomes the crucial issue. In the mean-
time, the difference in sectorial efficiency indicates a novel path for energy con-
servation and emission reduction—through technological transfer from developed
areas to less-developed areas.
Energy consumption from all industrial sectors in China’s economy was
examined by using an extended environmental input–output (EIO) analysis of latest
data from 2007. We compare the direct energy consumed with the embodied energy
in the final demand from 29 sectors within each sector. Two different viewpoints on
sectoral energy consumption have been presented: Energy consumption is directly
associated with the producer entity (production energy consumption) and with
where energy consumption is accounted throughout the sector’s whole supply chain
(embodied energy consumption). The results show that a considerable amount of
the energy is embodied in the supply chain, especially for the “Construction” and
“Other Service Activities” sectors, which production energy consumption is small.
The study further distinguishes the embodied energy consumption between direct
(for final demand consumption) and indirect (for intermediate demand between
industrial sectors) approaches. About 80 % of China’s embodied energy con-
sumption in 2007 was driven by indirect energy consumption. Our results provide a
more holistic picture of energy consumption and, therefore, should be considered
by policy makers.
72 3 Carbon Emissions from Regions and Sectors

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Chapter 4
Driving Factors of China’s
Carbon Emissions

In this chapter, we adopted the Logarithmic Mean Divisia Index (LMDI) method to
investigate the effect of three driving factors on national and provincial carbon
emission: economic scale, economic structure, and technological level.

4.1 Methodology

Index decomposition analysis (IDA) is a classic measure to quantify the contri-

bution of various dimensions for shaping the trajectories of energy consumption
and carbon emission, due to its adaptability and simplicity [1–4]. Among various
index decomposition analysis methods, the Logarithmic Mean Divisa Index
(LMDI) method has its own advantages due to its path independency, consistency
in aggregation, and easy interpretation of results [2, 4]. Therefore, LMDI method is
applied in this study for analyzing how industrial sectoral emission driven the
growth of provincial carbon emissions in China. In this study, the historical change
of carbon emissions is decomposed into three driving force factors: overall
industrial activity (activity effect), activity mix (structure effect), and sectoral car-
bon emission intensity (intensity effect). Activity effect describes the contribution of
GDP to carbon emission increase, namely, total economic scale. Structure effect is
an indicator for evaluating the contribution of industrial structure change on carbon
emission increase. Intensity effect refers to the effect of carbon intensity (GHG
emissions per unit GDP) on carbon emission increase and is used to evaluate the
contribution of technology improvement on carbon emission reduction.
Comprehensive description of activity effect, intensity effect, and structure effect
and the associated calculation have been introduced by Ang [5]. The LMDI
decomposition method was based on the IPAT equation and refined by Ang and
other scholars [3]. The LMDI is the preferred method since it avoids the allocation

© Springer-Verlag Berlin Heidelberg 2016 75

Z. Liu, Carbon Emissions in China, Springer Theses,
DOI 10.1007/978-3-662-52864-8_4
76 4 Driving Factors of China’s Carbon Emissions

of unexplained residual terms. It is also consistent in aggregation, which means that

the industrial activities can be grouped into sub-groups for further analysis [2]. The
decomposition results can be presented in additive and multiplicative forms.
The detailed calculation process is listed as follows:
If E0 and Et represent the carbon emission at start year and end year, respec-
tively, and ΔEact, ΔEstr, and ΔEint represent the economic scale effect, economic
structure effect, and technological level effect in the additive approach, then the
difference between E0 and Et, ΔEt, is decomposed into the sum of the three
aforementioned effects. It is the same with the multiplicative approach.
The formula for additive and multiplicative approaches is as follows:

DEt ¼ Et  E0 ¼ DEact þ DEstr þ DEint ð4:1Þ

where
X  
Qt
DEact ¼ wi  ln 0 ð4:2Þ
i
Q

X  t
S
DEstr ¼ wi  ln 0i ð4:3Þ
i Si

X  t
I
DEint ¼ wi  ln i0 ð4:4Þ
i Ii

Eit  Ei0
wi ¼ ð4:5Þ
ln Eit  ln Ei0

and

Dt ¼ E t =E 0 ¼ Dact Dstr Dint ð4:6Þ

where

X  !
Qt
Dact ¼ exp wi ln 0 ð4:7Þ
i
Q

X  t !
S
Dstr ¼ exp wi ln 0i ð4:8Þ
i Si

X  t !
I
Dint ¼ exp wi ln i0 ð4:9Þ
i Ii
4.1 Methodology 77

ðEit  Ei0 Þ=ðln Eit  Ei0 Þ

wi ¼ ð4:10Þ
ðE t  E 0 Þ=ðln Et  E 0 Þ

Et: total carbon emission at end year

E0: total carbon emission at start year
Dt: ratio of end year emission to start year emission
Q: GDP
S: ratio of sectorial GDP to total GDP
I: emission intensity, represented by carbon emission per GDP.

4.2 Driving Factors of Carbon Emission from 1997

to 2009

The carbon emission intensity and total emission index in China from 1997 to 2009
are shown in Fig. 4.1 (base year: 1997). During 1997–2009, the total GHG emis-
sions remained relatively constant during 1997–2001, sharply increased during
2002–2005, and slow down after 2005. Phase change can also been seen in his-
torical change of carbon emission intensity. In order to find reasons for such
changes, LMDI was applied for the following three periods: 1997–2001,
2002–2005, and 2006–2009.
From 1997 to 2001, the total emission remained nearly stable with a decrease in
emission intensity. There was a dramatic increase in total emission from 2002 to
2005, and the emission intensity increased accordingly. While the total emission
has continued to increase since 2006, the emission intensity has experienced a fall.
Therefore, the analysis of driving factors will be conducted in three time periods.
This study adopts the additive approach in decomposition. Figures 4.2, 4.3, 4.4,
and 4.5 represent the contribution from economic scale effect, economic structure
effect, and technological level effect from 1997 to 2009, from 1997 to 2001, from
2002 to 2005, and from 2006 to 2009, respectively.
It is indicated in Fig. 4.2 that from 1997 to 2009, all provinces experienced
remarkable increase in total carbon emission. While the technological advancement
offset part of the emission increase, the economic structure effect contributed
positively in all provinces, which means that the proportion of heavy industry has
been increasing.
From 1997 to 2001 (Stage I), the increase in total carbon emission was limited,
and most emission driven by economic scale was offset by technological
advancement (Fig. 4.3). The total emissions of Shanghai, Hunan, and the Northeast
region even declined due to economic structure adjustment. The structure effect
contributed less significantly, but in most provinces it drove an increase in total
emission.
78 4 Driving Factors of China’s Carbon Emissions

300

GHG Emission Emission Intensity

250

200
(%)

150

100

50

0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fig. 4.1 Carbon emission intensity and total emission index in China during 1997–2009

From 2002 to 2005 (Stage II), all provinces experienced dramatic increase in
total carbon emission. The economic scale, economic structure, and emission
intensity contributed significantly and positively to total carbon emission. The
contribution could be several times more than that during 1997–2001.
From 2006 to 2009 (Stage III), the provincial carbon emission continued to
increase, represented by the increase in economic scale. While the emission
intensity effect dropped significantly, the economic structure still appeared “heavy.”
With the decline in emission intensity effect, the increase nearly halved that of
during 2002–2005.
Results indicate the significant disparity on carbon emissions between Chinese
provinces, and more precisely, such disparity is more remarkable in certain
industries. While regional inequity of per capita emission is well recognized and
aroused pressing concern recently [6], the technology inequities among regions are
rarely reported. More importantly, such technology inequity has a direct connection
4.2 Driving Factors of Carbon Emission from 1997 to 2009 79

700

Eint Estr Eact GHG Emission

600

500

400

300

200

100

-100

-200

-300
Inner Mongolia
Shanxi
Hainan
Qinghai
Beijing

Shanghai
Gansu
Ningxia
Heilongjiang
Tianjin
Chongqing
Jiangxi
Jilin
Guangxi
Xinjiang
Shannxi
Sichuan

Fujian

Liaoning

Jiangsu
Hebei
shandong
Guizhou
Yunnna
Anhui
Hubei
Hunan
Zhejiang

Guangdong
Henan

Fig. 4.2 Driving forces for carbon emission of 30 provinces during 1997–2009 (unit: million tons
of CO2)

with China’s soaring carbon emission growth in 1997–2009, and intensity increase
in underdeveloped regions plays an important role in total emission increase.
The LMDI analysis revealed that the most of carbon emission increase is con-
centrated at underdeveloped regions since 2001, such as poor areas which struggle
with economic growth, coupled with energy-intensive industry and low-efficiency
technology (Figs. 4.3, 4.4, and 4.5). Several provinces, such as Inner Mongolia,
Ningxia, and Shanxi, have both higher per capita carbon emission and higher
emission intensity, implicating lower energy efficiency and carbon-intensive
80 4 Driving Factors of China’s Carbon Emissions

400

Eint Estr Eact GHG Emission

300

200

100

-100

-200
Inner Mongolia
Liaoning
Shanghai

Sichuan

Tianjin

Shanxi
Hunan

Jilin

Hainan
Heilongjiang
Shannxi
Hubei

Qinghai

Yunnna
Jiangxi
Gansu
Chongqing

Fujian
Anhui
Jiangsu

Beijing
Zhejiang
Henan
Guangxi
Xinjiang

Guizhou

Shandong

Hebei
Ningxia

Guangdong

Fig. 4.3 Driving forces for carbon emission of 30 provinces during 1997–2001 (unit: million tons
of CO2)

economic structure. In fact, China’s overall economy is largely dependent on pri-

mary energy resources and these resources are mainly located in less-developed
regions. Our research illustrates that the efficiency in certain sectors are extremely
low in those less-developed regions. Besides the economic barrier, such technology
barrier becomes a new challenge for sustainable development in these regions.
Technology inequity has a direct effect on China’s mitigation actions. On the one
hand, the disparity of technology level has not been fully recognized by policy
makers; such difference raises a request to revise current energy intensity reduction
targets for different provinces. For example, both the Beijing municipality (politi-
cally equal to a province) and Liaoning province were ranked as “second level”
regions, second highest and equivalent emission reduction targets (17 % energy
4.2 Driving Factors of Carbon Emission from 1997 to 2009 81

400

Eint Estr Eact GHG Emission

300

200

100

-100

-200
Inner Mongolia
Hainan

Shanxi
Liaoning
Beijing

shandong
Fujian

Shanghai
Qinghai

Chongqing
Anhui
Gansu
Tianjin
Jiangxi
Heilongjiang
Xinjiang
Guangxi
Shannxi
Jilin
Hubei
Sichuan
Guizhou

Yunnna

Hunan
Zhejiang

Guangdong
Henan
Jiangsu
Hebei

Fig. 4.4 Driving forces for carbon emission of 30 provinces during 2001–2005 (unit: million tons
of CO2)

intensity reduction target). Beijing is a provincial city with a highly developed

commercial industry and much reliance on electricity supply from other provinces
[7]. Liaoning province, with a large industrial base, is not able to export their
industrial base and shift their environmental burden. This unequal playing field and
perceived lack of fairness have caused provincial officials to take these emission
reduction goals less seriously. On the other hand, the technology inequity causes
underdeveloped regions to rely more on low-efficiency and energy-intensive
industries, resulting in carbon-intensive economic structure of these regions and of
the whole country. The fact is that many less-developed regions double lock both
carbon-intensive economic structure and low-efficiency technology with their
economic growth. The technology equity will hamper long-term sustainable
development for underdeveloped regions.
82 4 Driving Factors of China’s Carbon Emissions

400

Eint Estr Eact GHG Emission

300

200

100

-100

-200
Shanxi

Inner Mongolia
Beijing
Hainan
Qinghai
Gansu
Shanghai
Ningxia
Tianjin
Heilongjiang
Jiangxi
Jilin
Guangxi
Yunnna
Chongqing
Guizhou
Xinjiang

Fujian
Hunan

Shannxi
Hubei

Sichuan
Zhejiang

Anhui
Guangdong

Jiangsu
Hebei
Liaoning
Henan
shandong

Fig. 4.5 Driving forces for carbon emission of 30 provinces during 2005–2009 (unit: million tons
of CO2)

Currently, China’s carbon emission mitigation policies mainly depend on

mandatory control of intensity reduction such as the 40–45 % target. For example,
the dramatic decrease in GHG intensity since 2005 can be explained by the effect of
national energy-saving and emission-reduction policies in its 11th 5-year Plan
(2006–2010). Such a policy targets energy-consumption reduction per unit GDP by
20 % and main pollutants reduction (COD and SO2) per unit GDP by 10 % [8], but
there is no mandatory indicator for quantitative control of national and regional
economic structure change. Our results illustrate that intensity reduction can con-
tribute to significant offset of total carbon emission increase, especially after 2005.
However, most attention has been addressed on efficiency improvement, but little is
4.2 Driving Factors of Carbon Emission from 1997 to 2009 83

known about China’s economic structure which actually has become more carbon
intensive recently. Such a policy blind point will further block China’s mitigation
actions and lead to a long-term emission increase. Thus, complementary mechanism
and technology transfer are urgently needed in China’s underdeveloped areas.

4.3 Summary

In this chapter, China’s regional and sectoral GHG emission patterns and their
driving forces were explored by using detailed energy consumption data at the
sector level. We constructed for each province a detailed GHG inventory covering
28 sectors in the year 2009 and used an index composition analysis to explore
disparity. Results uncovered significant differences of sectoral emission intensity
among provinces, implying a huge disparity of technology level among regions.
Less-developed provinces with much higher energy-intensive technologies con-
tribute to the most of the national emission increment during 1997–2009 and cause
the whole country’s economic structure to become carbon intensive. Our research
indicates the inequity of technology level among regions already becomes a main
barrier for China’s CO2 mitigation and thus needs more attention from researchers
and policy makers.

References

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of industry. Applied Energy, 76, 15–23. doi:10.1016/s0306-2619(03)00043-6.
2. Ang, B. W. (2004). Decomposition analysis for policymaking in energy: Which is the preferred
method? Energy Policy, 32, 1131–1139. doi:10.1016/s0301-4215(03)00076-4.
3. Ang, B. W., & Liu, F. L. (2001). A new energy decomposition method: perfect in decomposition
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4. Ang, B. W., & Zhang, F. Q. (2000). A survey of index decomposition analysis in energy and
environmental studies. Energy, 25, 1149–1176. doi:10.1016/s0360-5442(00)00039-6.
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Policy, 33, 867–871. doi:10.1016/j.enpol.2003.10.010.
6. Clarke-Sather, A., Qu, J., Wang, Q., Zeng, J., Li, Y. (2011). Carbon inequality at the
sub-national scale, A case study of provincial-level inequality in CO2 emissions in China
1997–2007, Energy Policy, 39, 5420–5428.
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8. Wang, Q., & Chen, Y. (2010). Energy saving and emission reduction revolutionizing China’s
environmental protection. Renewable and Sustainable Energy Reviews, 14, 535–539.
Chapter 5
Carbon Emissions Embodied in Trade

This chapter will analyze China’s carbon emissions embodied in domestic and
international trade, based on the consumption emission accounting. The consumption-
based emission accounting is introduced to calculate the trade-related carbon emis-
sions for nations or regions, and the consumption-based emission is widely considered
as “carbon footprint” by literatures.

5.1 Methodology

Consumption-based accounting of emissions. An alternative to the production-

based accounting of CO2 emissions (See Chap. 2) is to compile inventories
according to where related goods and services are ultimately consumed. Such a
consumption-based method accounts for inter-regional exchange of energy supply,
goods, and materials by adding emissions embodied in imports to the production-
based total and subtracting emissions embodied in exports.
The emissions embodied in a region’s imports and exports can be calculated
using environmentally extended input–output analysis (EIO). Environmentally
extended multi-regional input–output (MRIO) analysis has been widely developed
for calculating the embodied carbon emission [1–3], virtual water [4, 5], material
use [6], biodiversity loss [7], and land use [8, 9] associated with international trade.
In MRIO framework, different regions are connected through inter-regional
trade, Zrs. The technical coefficient submatrix Ars consists of “½ars ij ” is derived from
ars
ij ¼ z rs s
ij =x j , where zrs
ij is the intersector monetary flow from sector i in region r to
s
sector j in region s; xj is the total output of sector j in region s. The final demand
matrix is Y consist of “½yrs rs
i ”, where yi is the region’s final demand for goods of
sector i from region r. Therefore, MRIO analysis can be shown as:

© Springer-Verlag Berlin Heidelberg 2016 85

Z. Liu, Carbon Emissions in China, Springer Theses,
DOI 10.1007/978-3-662-52864-8_5
86 5 Carbon Emissions Embodied in Trade

2 3 2 11 32 1 3 2 P y1s 3
x1 A A12  A1n x Ps 2s
6 x2 7 6 A21 A22  A2n 76 x2 7 6 y 7
6 3 7 6 31 3n 7 6 3 7 6 Ps y3s 7
6
7
6x 7 ¼ 6A A31  A 7 6 x 7
6 . 7 6 . .. .. .. 7 6 . 7þ66
s
.
7
7
ð5:1Þ
4 .. 5 4 .. 5 4 . 5 4 .
. . . .
P . 5
xn An1 An2  Ann xn sy
ns

Using familiar matrix notation and dropping the subscripts, Eq. 5.1 can be written
as: x = Ax + y or x = (I – A)–1y, where (I – A)–1 is the Leontief inverse matrix that
captures both direct and indirect inputs required to satisfy one unit of final demand in
monetary value; I is the identity matrix. To calculate the consumption-based CO2
emissions, we then extend the MRIO table with sector-specific CO2 emissions:
E = k (I – A)–1y, where E is the total CO2 emissions embodied in goods and services
used for final demand and k is a vector of CO2 emissions per unit of economic output
for all economic sectors in all regions.

5.1.1 Estimates of Sectoral Level Imported

and Exported CO2 Emissions

In a region IO model, a regional economy is considered as its system boundary, and

r
thus, exports are treated as final products in a region’s economy.
P Letr Gi be the total
CO2 emissions in economic sector i and region r, and thus, i Gi represents the
production-based emissions in region r. In each region r, there are intermediate
consumption, denoted Zijr , which represents the domestic purchases of sector i by
sector j in region r and final consumption, denoted yri , represents the domestic
purchases of sector i by final consumers in region r which includes households,
government, and capital investments. In the single-region IO model, exports, ers i ,
from region r to region s are also treated as final consumption. By summing
intermediate and final consumption, we can obtain the total output in each region:
X
xr ¼ Z rr þ yrr þ ers ð5:2Þ
s

By assuming fixed production ratios, we obtain the technical coefficients, Arr

ij , the
ratio of input to output, by diving Zijrr by xrj :

Arr rr r
ij ¼ Zij =xj ð5:3Þ

Thus, equation (S1) can be rewritten as:

X
xr ¼ ðI  Arr Þ1  ðyrr þ ers Þ ð5:4Þ
s

where ðI  Arr Þ1 is Leontief inverse matrix for region r.

5.1 Methodology 87

CO2 emissions are estimated based on the direct emission intensity, k r in each
sector in region r.

kir ¼ Gri =xri ð5:5Þ

Therefore, the total embodied emissions (direct and indirect) in exports from
region r to region s can be calculated by:

Expr ¼ kr ðI  Arr Þ1^ers ð5:6Þ

where Expr is a vector of embodied CO2 emissions in sectoral exports of region r to

region s; k r is a row vector of sectoral emission intensities in region r; ^ers is a matrix
with sectoral export from region r to region s on diagonal.
In turn, the total embodied emissions in imports from region s to region r can be
estimated by:

Impr ¼ ks ðI  Ass Þ1^ers ð5:7Þ

where Impr is a vector of embodied CO2 emissions in sectoral imports of region s to

region r; ks is a row vector of sectoral emission intensities in region s; ^ers is a matrix
with sectoral import from region s to region r on diagonal.

5.1.2 Emissions and Trade Data

In this study, we estimate emissions from fossil fuel energy combustion and cement
production, which together account for about 90 % of GHG emissions produced in
China. Our calculations include 20 different types of fuel and 46 energy con-
sumption sectors. Further details of data sources and processing methods are
available in [10–12].
Our multi-regional input–output (MRIO) relies on data from the Global Trade
Analysis Project (GTAP) [13], which includes 129 regions (mostly countries, but
some aggregated regions). Although GTAP data cover 57 industry sectors, we
aggregate to 30 sectors in order to match input–output tables of interprovincial trade
compiled by Liu et al. at the Chinese Academy of Sciences [14]. In turn, we use
Liu et al.’s tables to disaggregate the Chinese region in GTAP into 30 subregions
(26 provinces and 4 cities). Thus, we have a global MRIO comprised of the latest
available economic data that allows us to assess consumption-based CO2 emissions
in each Chinese subregion as well as emissions embodied in trade among these
subregions and all 129 other GTAP regions around the world. Technical details of
how the Chinese IO tables are nested with the GTAP MRIO are available in [3].
88 5 Carbon Emissions Embodied in Trade

5.2 Carbon Emissions Embodied in Domestic Trade

Consumption-based accounting shows that approximate 40 % of total production-

based emissions are embodied in the interprovincial trade in China. In the most
developed provinces, such as Beijing, Shanghai, Tianjin, Guangdong, and Zhejiang,
imported emissions account for more than 50–80 % of their consumption-based
emissions. The well-developed coastal provinces tend to externalize their CO2
emissions central and west provinces through imports of low valued carbon-intensive
goods.
In 2007, 57 % of China’s emissions from the burning of fossil fuels were emitted
during production of goods and services that were ultimately consumed in different
provinces in China or abroad. Beijing–Tianjin, the central coast, and the south coast
are the most affluent regions in China, with large net import of emissions embodied
in goods from poorer central and western provinces. More than 75 % of emissions
associated with products consumed in Beijing–Tianjin occur in other regions.
Similarly, the central coast and south coast regions outsource about 50 % of their
consumption emissions. Beijing–Tianjin, central coast and south coast are the
richest regions in China, and their per capita GDP are about 2–4 times of the per
capita GDP in southwest, northwest and central. At the same time, these three
wealthy regions import a large amount of goods from poorer regions, thus have a
large amount of embodied emissions in their imports. A large amount of emissions
from central (32 % of its production-based emissions), northwest (27 %), and
southwest (25 %) are induced by the consumption of goods and services or inter-
national export in coastal provinces in China.
The results demonstrate the economic interdependence of Chinese provinces,
while also highlighting the differences in wealth, economic structure, and fuel mix
that drive imbalances in interprovincial trade and associated embodied emissions in
traded products.

5.3 Carbon Emissions Embodied in International Trade

China is the world’s largest carbon emitter [15] and the largest net exporter of CO2
emissions embodied in goods and services [16]. In 2007, emissions produced in
China (production-based emissions) were 7.3 Gt CO2, of which 1.7 Gt (23 %) were
related to goods exported and consumed in other regions. Several factors contribute
to the prodigious imbalance of emissions embodied in China’s trade, among them:
(1) the large trade surplus between China and its trading partners, (2) the structure
of the Chinese economy (i.e., specialization in energy-intensive production), and
(3) the emission intensity of Chinese production (i.e., the emissions produced per
unit of economic output) [1, 17].
Among these factors, emission intensity is particularly problematic. Although
trade in emissions may undermine the efficacy of region-specific climate policies
[18], in the case of China it probably also reflects an economically efficient use of
5.3 Carbon Emissions Embodied in International Trade 89

production factors [17]. But where Chinese industry produces more emissions than
the same industry elsewhere, this economic efficiency is directly opposed to climate
change mitigation.
Here, we track emissions embodied in trade among 159 regions using a global
multi-regional input–output (MRIO) model of emissions and trade as of the year
2007. The trade and emissions data supporting the model are a combination of the
Global Trade Analysis Project (GTAPv8) and province-level input–output tables of
China that we constructed [3, 11, 19].
China accounts for 34 % of global total carbon emissions embodied in inter-
national trade of imports and exports, ranking highest in the world. When consider
the net carbon emission in trade (net emission = emission in export − emission in
import), China is the largest net emission exporter and USA is the largest importer
in the world (Fig. 5.1a). China’s emissions embodied in exports are 8 times the

Fig. 5.1 Emissions embodied in trade. Top 25 regions (including countries and Chinese
cities/provinces) by net emissions embodied in trade (a), gross imports (b), gross exports (c), the
ratio of emission intensity of exports to imports (d), and emission intensity of imports (e), and
emission intensity of exports (f)
90 5 Carbon Emissions Embodied in Trade

import emissions, highest in 159 regions, and the ratio between export and import
emission is also significantly larger than other countries with large emissions
embodied in trade, such as the USA (0.5), India (1.3), Canada (1.2), Germany (0.5),
and Australia (1.5).
The unbalanced trade emission is more significant for China’s provinces, and 25
of China’s 30 provinces are listed as the top regions among 159 world regions with
the emission embodied in export higher than the emission embodied in import
(Fig. 5.1b, c). There are 11 Chinese provinces with export-embodied emissions
being 10 times larger than the emissions embodied in imports. Xinjiang (25 times
larger), Shanxi (19), and Hebei (16) have the highest carbon export–import ratio
among all 159 countries and regions. China’s trade emissions are mainly from few
provinces. Shandong (export 178 Mt CO2 in 2007), Jiangsu (173 Mt), Guangdong
(161 Mt), Hebei (139 Mt), and Zhejiang (111 Mt) those five top carbon export
provinces account for the 46 % of total 1671 Mt CO2 that embodied in China’s
export. On the contrary, Guangdong, Shandong, Jiangsu, Zhejiang, and Henan are
the five provinces with highest import emissions (together account for 44 % of total
211 import emissions). Trade-embodied emission exported from several Chinese
provinces is already larger than the emission exported from major developed
countries. For example, Shandong and Jiangsu listed as world No. 3 and
No. 5 region in terms of total emissions embodied in exports, the amount of
export-related emission is larger than that of Canada (No. 8) and Germany (No. 10),
respectively (Fig. 5.1c).
By calculating the carbon intensity of exports and imports, China’s regions are
most carbon-intensive exporter among the world. The average carbon intensity of
China’s international exports (1.35 t CO2/kt dollar) about 6 times that of China’s
international imports (0.23 t CO2/kt dollar). Ranking the global 159 regions with
the ratio between carbon intensity of exports and the carbon intensity of imports,
China’s 29 provinces list within the top 30 of the regions among world regions
(Fig. 5.1d), with South Africa (listed as No. 28) being the one exception. More
importantly, China’s carbon-intensive exports were mainly produced in the poor
regions. China’s regions with less than $4,000 per capita GDP show dramatic
discrepancy of the emission intensity between imports and exports (Fig. 5.2). 80 %
of China’s export-related emissions are produced by poor regions where the carbon
intensity of exports was more than 5 times the carbon intensity of their international
imports. For example, Guizhou with a per capita GDP of only $900 in 2007 had an
emission intensity for international exports about 31 times of the intensity in
international imports, and that ratio is about 49-fold in Inner Mongolia ($3,386),
30-fold in Guizhou (with per capita GDP of $922 in 2007), 26-fold in Yunnan
($1405) and 17-fold in Gansu ($1380). The gap is smaller in China’s more
developed east coast regions; for example, the ratios in Beijing, Zhejiang, and
Shanghai are 2.8, 3, and 4.1, respectively; however, such ratios are still much
higher than the ones in other major countries for emissions embodied in trade, such
as USA (ratio = 0.8), Germany (0.4), Japan (0.2), Canada (1.1), the UK (0.3), and
India (1.7).
5.3 Carbon Emissions Embodied in International Trade 91

Fig. 5.2 Emission intensity of production. Kilograms of CO2 per dollar of output in each of 30
Chinese cities/provinces for international export (purple bars) and domestic consumption in China
(gray bars), as well as the emission intensity of goods imported to the city/province from outside
China (orange bars). The green curve shows GDP per capita in each city/province according to the
right axis

Developed countries are the major consumers of goods that cause

carbon-intensive exports originating from Chinese regions. US consumption trig-
gered 395 Mt CO2 (24 % of China’s total 1671 Mt export emission) emissions
embodied in exports, followed by Japan (150 Mt CO2, 9 %), Germany (5 %),
Korea (4 %), the UK (4 %), and Russia (3 %). The European Union and other East
Asian countries together account for 25 and 15 % of China’s export-embodied
emissions, respectively. On the other hand, China’s exported-embodied emissions
accounted for the largest share of emissions imported to other countries. For
example, the import emission from China to Japan, the USA, and Russia accounts
for 48, 44 and 42 % of their total import-embodied emissions, respectively. The
exports are mainly come from Jiangsu, Shandong, Guangdong, Hebei, and
Zhejiang, and those top 5 carbon export provinces account for 10.7, 10.4, 9.7, 8.3,
and 6.7 % of national total emissions embodied in exports, respectively.
The export-embodied emission is larger than the import-embodied emission in
all the 30 provinces. Calculating the embodied emissions by sectors further
explained China’s high carbon intensive and unbalanced trade. The carbon intensity
of China’s exporting heavy industrial materials (mining products, chemical prod-
ucts, metal and non-metal products, energy products) is many times higher of its
imports and even higher than the same kind of products that been consumed in
domestic market. Such carbon-intensive heavy industrial materials are exactly the
products that China mostly exported. Metal and non-metal products (account for
37 % of total export carbon), chemical products (22 %), and equipment (15 %)
together account for 75 % of China’s carbon emission embodied in international
exports. On the contrast, the proportion of these three sectors in China’s imports is
only 19, 16, and 21 %, respectively. Raw mining products have the highest share of
92 5 Carbon Emissions Embodied in Trade

emission that embodied in China’s imports (23 %). The high level of imported raw
mining materials and exported metal and non-metal products implies that China is
not just world workshop, but the workshop of most carbon-intensive products. Such
phenomenon is significant in China’s major carbon export regions, for example,
Shandong was the No. 1 province for the emission embodied in international
exports (accounting for 11 % of national total emission embodied in international
exports), 42 % of the embodied emission (8 Mt CO2) that Shandong imported from
other countries is from mining products, accordingly, 34 % of embodied emission
(60 Mt CO2) that Shandong exported to other countries are coming from metal and
non-metal products. The high proportion of imported mining products and exported
metal and non-metal products for China’s regions implies that China is now the
world factory of smelting and processing of raw mining materials, the most
carbon-intensive stage among manufacturing supply chain (Figs. 5.3 and 5.4).

Fig. 5.3 Top exporting provinces. The emissions embodied in goods exported from China to the
USA, EU and Japan represented 58 % of all emissions embodied in trade in 2007 (a). Five
Chinese provinces account for 46 % of these exports (b)
5.3 Carbon Emissions Embodied in International Trade 93

Fig. 5.4 Emissions embodied in international trade. The flow represents the emissions embodied
in trade, the color represents the original production regions; for example, red flow represents the
embodied emission that produced by Africa and exported and consumed by other regions

Several factors can contribute to the observed differences in the magnitude and
intensity of emissions embodied in exports and imports. First, in recent years, China
has become a “factory for the world,” with high concentrations of global heavy
industry and manufacturing. For example, China produces 60, 51, and 65 % (by
mass) of the world’s cement, steel, and coke, respectively [20]. Such large
imbalances in the volume of traded products may correspond to similarly large
imbalances in the emissions embodied in traded products. Figure 5.5 compares the
percentage of emissions related to consumed goods that are imported (y-axis) and
the percentage of produced emissions that are embodied in exports for a number of
industry sectors in China (Fig. 5.5a) and Europe (Fig. 5.5b). For example, 34 %
94 5 Carbon Emissions Embodied in Trade

Fig. 5.5 Differences in share

of embodied emissions traded
by industry categories.
Circles indicate the share of
consumed emissions that are
imported (y-axis) and the
share of produced emissions
that are exported (x-axis) for a
range of industry categories in
Europe (a) and China (b). The
size of each circle denotes the
sector’s total production
emissions, providing an
indicator of the relative
importance of different
sectors. The colors of the
circles indicate whether the
industries are primary
(yellow), secondary and
energy intensive (red),
secondary and non-energy
intensive (purple), or tertiary
(green). It should be noted
that while the marker area
scale is common across both
charts (to aid comparison), the
x- and y-axis scales differ.
A line representing equal
import and export share is
shown in each chart. Data are
in year 2007

(26 Mt CO2) of emissions produced by the European metal production industry are
embodied in products exported from Europe in 2007, but emissions embodied in all
metal products consumed in Europe were 140 Mt CO2, 64 % of which (90 Mt CO2)
were imported from outside Europe (Fig. 5.5a; red circle labeled “metal”). In
comparison, the share of emissions produced by China’s metal production sector
that is exported is similar to Europe’s (33 %; Fig. 5.5b), but the share of emissions
related to Chinese consumption of metals that is imported is much lower: 11 %.
5.3 Carbon Emissions Embodied in International Trade 95

Overall, Fig. 5.5 highlights that, across many industry sectors, the share of
European consumption (import from other countries) is consistently greater that the
share of produced emissions that are exported, and the opposite is true for China.
These trade imbalances are evident for both industries (yellow circles) and sec-
ondary industries (red and purple circles).
A second factor influencing emissions embodied in trade is the trade structure.
Figure 5.4 shows the industry categories that make up Chinese imports, exports,
and domestic consumption. Emissions embodied in heavy, energy-intensive prod-
ucts such as metal and non-metal products and equipment make up much larger
shares of China’s exports (37 and 22 %, respectively) than its imports (19 and
16 %, respectively; light green and dark blue bars in Fig. 5.6). Meanwhile, mining
products is the category with the greatest proportion of emissions embodied in
Chinese imports (23 %). The dominance of these industries in Chinese trade
implies that China is not just the world’s workshop, but is engaged in the most
emission-intensive stages of manufacturing: the smelting and processing of raw
materials. This pattern is visible at the province level, as well; in Shandong, where
emissions embodied in trade are largest, 8 Mt CO2 are embodied in imports of
mining products from other countries (42 % of all emissions embodied in imports)
and 60 Mt CO2 are embodied in exported metal and non-metal products (34 % of
emissions embodied in the province’s exports).
The third major factor is emission intensity, or CO2 emissions per dollar of
output in each particular industry. Such emission intensity reflects both energy
intensity (energy consumed per dollar of output) and carbon intensity of energy
(CO2 per unit of energy consumed). The combination of a carbon-intensive power

Fig. 5.6 Sectoral share of China’s embodied emissions. Data are in year 2007
96 5 Carbon Emissions Embodied in Trade

industry, relying primarily on coal, and of a relatively low value-added of industry

thus translate into a high emission intensity of Chinese production. In 2007, 75 %
of China’s primary energy was supplied by coal, the highest level among major
energy-consuming nations. As a result, the carbon intensity of energy consumption
in general (for internal consumption and exports combined) in China is extremely
high: Chinese exports entail 61 tCO2/PJ on average, which is almost triple the
carbon intensity of imports to China, 24 tCO2/PJ. The energy intensity of China’s
exports is similarly high; in 2007, China consumed 22 MJ/$ of output, on average,
or more than twice the energy intensity of products imported to China (9 MJ/$).
This high energy intensity is underpinned by low value-added and less advanced
technology of China’s production, as previously suggested by other studies [16, 21]
covering the 2002–2010 time period.

5.4 Summary

China’s provinces are the most unbalanced regions globally in terms of

trade-embodied carbon emissions and with world highest carbon-intensive export.
Carbon-intensive production processes and products, such as mining, metal, and
non-metal products from China and consumed worldwide, are responsible for making
China the country with a significant carbon surplus. Carbon-intensive export is the
most significant driver for such unbalanced carbon trade, by assuming the carbon
intensity of exports which equal to the intensity of imports for China’s 30 provinces,
China’s total export-embodied carbon emission could reduce to 233 Mt CO2 from
1,671 Mt CO2 in 2007, an 86 % reduction with the total amount of 1,438 Mt CO2
equivalent to the total annual emission in Japan. Decarbonizing the carbon-intensive
production of China’s underdeveloped regions requires domestic and international
efforts on improving the technology level, adjusting economic structure, and
de-carbonizing the energy mix. China should improve the energy efficiency and (more
broadly) the environmental performance of industrial practices in poor regions, per-
haps by adopting technologies already used on China’s east coast. Internationally, the
gap between the emissions embodied in international exports from the most advanced
regions in China in different sectors and the emissions embodied in international
exports from the most advanced regions in the world imply that in the medium- to
long-term international efforts could consider how to accelerate the diffusion of more
advanced technologies to China and within China.

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Chapter 6
Policy Implications for China’s
Low-Carbon Development

6.1 Disaggregate National Targets into Regions

A single emissions reduction target cannot suit all of China’s 30 provinces, which
have different energy source mixes, uses, and economic development needs. Peak
emission targets need to be designed for each region such that the aggregate sum
falls by 2030.
Wealthy cities such as Beijing, Tianjin, and Shanghai that have already reversed
emissions growth could cap their emissions and set reduction targets every 5 years.
Developed coastal provinces such as Guangdong, Zhejiang, and Jiangsu that have
benefited from the pilot emission trading scheme since 2010 should pledge more
aggressive and rapid peak targets—such as reducing the current per capita carbon
emissions below that of EU countries before 2030 or even 2020. Underdeveloped
regions such as Shanxi, Ningxia, and Xinjiang provinces could be allowed to peak
after 2030 to leave room for new infrastructure construction.
Fossil fuel use needs to be curtailed first. The state’s ambitious plans for national
coal consumption to peak by the end of this year at 3.9 billion tonnes and fall
thereafter must be met. Beijing and Tianjin are required to halve their coal con-
sumption by 2017 to meet mandated air quality requirements. All conventional
coal-fired plants must be converted to gas by the end of 2015, and an additional
13 billion m3 from western China and 12 billion m3 of natural gas from overseas are
being piped to Beijing and Tianjin, respectively. Smaller cities and other regions
too must reduce their coal use.
China can strengthen technology-driven emission intensity (emission per unit of
GDP) improvements, especially in less developed provinces. But loopholes also
need to be overcome. Emission intensity targets should be supplemented by
physical emission efficiency indicators, such as emission per unit production of
steel. Such indicators are easier to monitor and verify and can be used to measure
efficiency for sectors, as well as individual factories.

© Springer-Verlag Berlin Heidelberg 2016 99

Z. Liu, Carbon Emissions in China, Springer Theses,
DOI 10.1007/978-3-662-52864-8_6
100 6 Policy Implications for China’s Low-Carbon Development

Air quality indicators, such as particulate concentrations, can be integrated with

emissions goals. They are currently treated separately. With NDRC in charge of
climate change mitigation and the Ministry of Environment responsible for air
pollution abatement, duplicate investments and work plans are common. Better
coordination between departments and a set of joint emission measures—managed
by one agency—are needed.
Climate targets must become decoupled from GDP. Further criteria by which
both local and provincial leaders are evaluated for career promotion must include
not simply economic development measures, but also the attainment of energy
productivity and pollution abatement targets.

6.2 Low-Carbon Technology Revolution

China’s economy can be decarbonized only by reducing energy demand and

emissions together. Recycling could reduce total energy intensity by 90 % (22),
with China one of the world’s top producers of materials such as iron and steel.
Schemes encouraging “urban mining” of scrap and exchanging by-products among
regional factories will be needed. China recycled 70 million tons of steel carps in
2008, and China has potential to replace its 80 % primary steel production by
recycling by 2050.
In renewable energy, China is leading the world. Its wind turbines and hydro-
power stations generated 45 and 720 million kWh in 2010, respectively; both are
highest in the world (23). China’s total installed renewable capacity (300 GW in
2011) is already twice the USA (146 GW in 2011). However, China is producing
more renewable technologies than it is using. Its solar PV manufacturers made
panels which could generate 40 GW in 2012, but less than 5 % of that installed
domestically (24). Policy attention should focus on the implementation as well as
capacity production. China invest world highest 680 billion US dollar in renewable
industry in 2011, but further investments in the grid construction and market
exploring are urgently needed for absorbing excess renewable capacity.
Great potential remains for low-carbon energy development and implementation
in China. For example, further developing wind power alone could meet all the
electricity demand projected by 2030, and introducing 640 GW wind capacity (with
cost about 900 billion US dollars) over next 20 years will save 30 % of carbon
emission in the period. Using China’s waste gutter oil (as of 2010) for biomass fuel
could reduce 90 million tons of CO2 (26), equivalent to 14 % of total emission
reduction from developing (Annex B in Kyoto Protocol) countries during
1990–2008.
Non-renewable options could contribute to the energy transition by creating
buffering time for large-scale renewable use. China by now installed 13 GW nuclear
power capacities (1 % of China’s electricity production) and will increase it to the
world leading 80 GW by 2020 (6 % of China’s electricity production). Natural gas
consumption could reach 250 billion cubic meters by 2020 with double-digit
6.2 Low-Carbon Technology Revolution 101

growth in 2010–2020, and the air pollutions such as SO2 and NOx can be funda-
mental reduced by replacing coal with gas. The advantages of these options should
be acknowledged yet heavy investment need seriously considered due to their
drawbacks in safety, cost, and environment impact.
Energy and emissions targets need to be decoupled from economic performance.
Physical intensity indicators, such as emission per unit production of steel, should
be used rather than relative economic intensity indicators. Similar to the con-
sumption cap of 3.9 billion tons of coal by 2015, a total emission cap should be
introduced to control rising emissions countrywide. Instead of simply shutdown the
power plant when cap has been exceed, energy taxes or allowances would be
needed to leverage the cap so that social and economic cost can be minimized.
Given one-third of China’s emission reabsorbed by its enhanced afforestation
and territorial ecosystem in 1980–2000, a carbon budget—considering both emis-
sions and offsets from carbon sinks—should be introduced to reward mitigation
efforts. This will encourage diverse measures such as reforestation and afforestation,
waste management, and credits from carbon-free energy projects.
Regional compensation mechanisms would encourage technology improve-
ments in poor areas at the expense of populous ones. Targets for industrial sectors
rather than regions would lessen disparities between provinces. In order to prevent
the “leakage” of the reduction cost among regions, consumption-based accounting
should be used for regional emission calculation especially in electricity sector.
Mitigation responsibilities should be required through supply chain of
energy-intensive enterprises that headquarter in developed regions but leave their
production in poor ones. Rigorous environmental standards need to be addressed
poor center and west regions, where the environment is vulnerable and lack of
protection awareness.
Market mechanisms should be introduced or enhanced. From production per-
spective, bonus such as tax free, subsidies, and policy facility is encouraged to
promote advanced technology and low energy-intensive industries, such as cleaner
production, integrated gasification combined cycle (IGCC), carbon capture and
storage (CCS) for power plants, and cogeneration. From consumption perspective,
step tariff is required since China’s top 5 % consumer account for 25 % of elec-
tricity use. Moreover, energy market needs reform with transparent and concrete
pricing system, which should dominate by energy supply and regulations instead of
government intervention.

6.3 Expand Carbon Trading Nationwide

China’s pilot ETS traded nearly 14 million tons of CO2 (less than half percent of the
national total) in 2013 but is the second largest such scheme in the world after the
EU. The NDRC intends to extend the scheme to all 30 Chinese provinces starting in
2017, making China the world’s largest carbon market. A national emission cap
must be set and coordinated across the country.
102 6 Policy Implications for China’s Low-Carbon Development

In the pilot ETS, each province sets its own cap and decided which sectors it
covered. For example, transport is included in Shanghai’s ETS but not in the others.
Each province has also determined how compliance is assured. Hubei targets
enterprises consuming more than 60,000 tonnes of coal equivalent/year, a threshold
6 times that of Guangdong (10,000 tonnes of coal equivalent/year).
Central government should develop standards and a timeline to unify the cap
criteria. The first step should be to introduce a national ETS for the top six emitting
industries—power generation, ferrous and nonferrous metallurgy, construction,
chemicals production, and aviation services—to be extended later to others.
Regulations and laws are needed that make it mandatory for certain enterprises to
trade emissions. Accounting and tax treatments need to be clarified.
A cascading management framework of carbon trading needs to be established,
with provincial ETS exchanges linked to higher-level regional exchanges. For
example, Beijing’s exchange could coordinate provincial exchanges across
Northern China.
Market mechanisms should be also introduced to the energy supply system.
First, the monopoly of electricity and energy supply by major state-owned com-
panies must be broken to encourage the innovation and efficiency improvement.
Petro China and Sinopec, the two major state-owned oil companies, together take
80 % of the national oil supply and 10 % of the nation’s total carbon emissions.
Second, an energy supply market needs to be set up to allow prices to respond to
demand and incentives. The price for delivering energy to the grid is now controlled
by the government and is largely static. This causes barriers for connecting
renewable energy as low-carbon energy costs more price than thermal power.
Subsidies for fossil fuels such as the contract price for selling coal to power plants
need to be removed so that renewable and low-carbon energy technology can be
competitive. Introducing a carbon tax in certain emission-intensive sectors—start-
ing low and ratcheting up over the next decade—would slow coal and petroleum
consumption.
By meeting the challenges we outline, China can lead the global climate miti-
gation movement and create a pathway toward sustainable, low-carbon
development.