Michael T. Rock and Michael Toman
- Published in print:
- 2015
- Published Online:
- January 2015
- ISBN:
- 9780199385324
- eISBN:
- 9780199385348
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199385324.001.0001
- Subject:
- Economics and Finance, South and East Asia, International
Since 1978 China has been remarkably successful in reducing the CO2 intensity of GDP and industry. The book shows how China’s industrial and technology policies affecting four energy-intensive ...
More
Since 1978 China has been remarkably successful in reducing the CO2 intensity of GDP and industry. The book shows how China’s industrial and technology policies affecting four energy-intensive industries—aluminum, cement, iron and steel, and paper—have transformed industrial structure within these industries and technological capabilities within enterprises in these industries, and how both types of changes have put each of these industries on substantially lower CO2 emissions trajectories. These conclusions are demonstrated through four lines of analysis. The first is several detailed enterprise-level case studies to document the link between enterprise-level investments in technological learning and CO2 intensity. The second is econometric analysis using a KLEM-type model of energy intensity and a large database of enterprises to formally test the hypothesis that enterprises’ own investments in technology learning contributed to lower energy intensities. Third is a comparison of China’s experience in one industry, cement, to that industry in Indonesia, where concern for technological catch-up and energy efficiency has been less pressing. Finally, the book provides industry-wide estimates of CO2 savings from specific technological innovations in each of the four industries and compares them to a business-as-usual scenario. The estimates show that CO2 emissions in these four industries were 45% lower than they would have been in the absence of the technological changes identified. If these CO2 savings had not occurred, the world’s CO2 emissions would have been 10% higher in 2010.Less
Since 1978 China has been remarkably successful in reducing the CO2 intensity of GDP and industry. The book shows how China’s industrial and technology policies affecting four energy-intensive industries—aluminum, cement, iron and steel, and paper—have transformed industrial structure within these industries and technological capabilities within enterprises in these industries, and how both types of changes have put each of these industries on substantially lower CO2 emissions trajectories. These conclusions are demonstrated through four lines of analysis. The first is several detailed enterprise-level case studies to document the link between enterprise-level investments in technological learning and CO2 intensity. The second is econometric analysis using a KLEM-type model of energy intensity and a large database of enterprises to formally test the hypothesis that enterprises’ own investments in technology learning contributed to lower energy intensities. Third is a comparison of China’s experience in one industry, cement, to that industry in Indonesia, where concern for technological catch-up and energy efficiency has been less pressing. Finally, the book provides industry-wide estimates of CO2 savings from specific technological innovations in each of the four industries and compares them to a business-as-usual scenario. The estimates show that CO2 emissions in these four industries were 45% lower than they would have been in the absence of the technological changes identified. If these CO2 savings had not occurred, the world’s CO2 emissions would have been 10% higher in 2010.
Michael T. Rock and Michael Toman
- Published in print:
- 2015
- Published Online:
- January 2015
- ISBN:
- 9780199385324
- eISBN:
- 9780199385348
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199385324.003.0001
- Subject:
- Economics and Finance, South and East Asia, International
Since the onset of economic reforms in 1978, China has been remarkably successful in reducing the CO2 intensity of GDP and industrial production despite a rising share of energy-intensive industries ...
More
Since the onset of economic reforms in 1978, China has been remarkably successful in reducing the CO2 intensity of GDP and industrial production despite a rising share of energy-intensive industries in industrial value added and a rising CO2 intensity of fuel use. The focus in this book is on four such industries: aluminum, cement, iron and steel, and paper. The rapid decline in industry CO2 intensity was due in part to rising energy prices, increased openness to trade and investment, and increased competition. But actually realizing improved energy efficiency in Chinese industries has been highly dependent on industrial policies and institutions that encouraged enterprises to build their technological capabilities. Success in technology transfer and building more robust technological capabilities depended on enterprise investments in technological upgrading—though challenges and costs have been incurred along the way.Less
Since the onset of economic reforms in 1978, China has been remarkably successful in reducing the CO2 intensity of GDP and industrial production despite a rising share of energy-intensive industries in industrial value added and a rising CO2 intensity of fuel use. The focus in this book is on four such industries: aluminum, cement, iron and steel, and paper. The rapid decline in industry CO2 intensity was due in part to rising energy prices, increased openness to trade and investment, and increased competition. But actually realizing improved energy efficiency in Chinese industries has been highly dependent on industrial policies and institutions that encouraged enterprises to build their technological capabilities. Success in technology transfer and building more robust technological capabilities depended on enterprise investments in technological upgrading—though challenges and costs have been incurred along the way.
Michael T. Rock and Michael Toman
- Published in print:
- 2015
- Published Online:
- January 2015
- ISBN:
- 9780199385324
- eISBN:
- 9780199385348
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199385324.003.0008
- Subject:
- Economics and Finance, South and East Asia, International
Individual industry estimates of CO2 savings may not be particularly good at separating out the impact of scale, technology, and price effects on energy efficiency and CO2 intensity. Econometric ...
More
Individual industry estimates of CO2 savings may not be particularly good at separating out the impact of scale, technology, and price effects on energy efficiency and CO2 intensity. Econometric analysis based on a sample of Chinese enterprises in the four industries under consideration (aluminum, cement, iron and steel, and paper), using a common KLEM-type model, provides additional insight in sorting out the contributions of these effects. The results broadly confirm the finding of the individual industry analyses. There is strong statistical support for the hypotheses that energy price and own-enterprise technology investments lead to substantially lower energy intensity. Larger-scale enterprises have lower energy intensities, and increased investments in research and development have decreased energy intensity. The analysis controls for other effects, such as ownership form and regional location of enterprises, and it holds when the sample is broken into different time periods.Less
Individual industry estimates of CO2 savings may not be particularly good at separating out the impact of scale, technology, and price effects on energy efficiency and CO2 intensity. Econometric analysis based on a sample of Chinese enterprises in the four industries under consideration (aluminum, cement, iron and steel, and paper), using a common KLEM-type model, provides additional insight in sorting out the contributions of these effects. The results broadly confirm the finding of the individual industry analyses. There is strong statistical support for the hypotheses that energy price and own-enterprise technology investments lead to substantially lower energy intensity. Larger-scale enterprises have lower energy intensities, and increased investments in research and development have decreased energy intensity. The analysis controls for other effects, such as ownership form and regional location of enterprises, and it holds when the sample is broken into different time periods.
Michael T. Rock and Michael Toman
- Published in print:
- 2015
- Published Online:
- January 2015
- ISBN:
- 9780199385324
- eISBN:
- 9780199385348
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199385324.003.0010
- Subject:
- Economics and Finance, South and East Asia, International
Over three decades, China modernized the aluminum, cement, iron and steel, and paper industries. It provided incentives and reformed institutions to encourage enterprises to adopt state-of-the-art ...
More
Over three decades, China modernized the aluminum, cement, iron and steel, and paper industries. It provided incentives and reformed institutions to encourage enterprises to adopt state-of-the-art technologies. Without these changes CO2 emissions from the four industries would have been nearly 2.3 times higher. Nevertheless, increases in output in these industries led to substantial increases in CO2 emissions despite declines in CO2 intensity. Further progress will require facing challenges in continued technological modernization and closing remaining small and backward enterprises. Attempts to create technologically sophisticated national champion enterprises have not been entirely successful, and there is good reason to worry about the anticompetitive effects of this strategy. Given China’s fragmented industrial structure and its decentralized industrial governance system, it will continue to be challenging to close energy-inefficient and polluting facilities. Nevertheless, China’s experience shows the advantages of combining energy sector policies with market liberalization and technology upgrading policies.Less
Over three decades, China modernized the aluminum, cement, iron and steel, and paper industries. It provided incentives and reformed institutions to encourage enterprises to adopt state-of-the-art technologies. Without these changes CO2 emissions from the four industries would have been nearly 2.3 times higher. Nevertheless, increases in output in these industries led to substantial increases in CO2 emissions despite declines in CO2 intensity. Further progress will require facing challenges in continued technological modernization and closing remaining small and backward enterprises. Attempts to create technologically sophisticated national champion enterprises have not been entirely successful, and there is good reason to worry about the anticompetitive effects of this strategy. Given China’s fragmented industrial structure and its decentralized industrial governance system, it will continue to be challenging to close energy-inefficient and polluting facilities. Nevertheless, China’s experience shows the advantages of combining energy sector policies with market liberalization and technology upgrading policies.
