Scenario Prediction of Energy Consumption and CO 2 Emissions in China’s Machinery Industry

Boqiang Lin () and Weisheng Liu
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Weisheng Liu: China Center for Energy Economics Research, School of Economics, Xiamen University, Xiamen 361005, China

Sustainability, 2017, vol. 9, issue 1, 1-18

Abstract: Energy conservation and CO 2 abatement is currently an important development strategy for China. It is significant to analyze how to reduce energy consumption and CO 2 emissions in China’s energy-intensive machinery industry. We not only employ a cointegration method and scenario analysis to predict the future energy demand and CO 2 emissions in China’s machinery industry, but we also use the Monte Carlo simulation to test the validity of the predictions. The results show that energy demand in the industry will respectively reach 678.759 Mtce (million ton coal equivalent) in 2020 and 865.494 Mtce in 2025 under the baseline scenario. Compared with the baseline scenario, the energy savings in 2020 will respectively be 63.654 Mtce and 120.787 Mtce in the medium and advanced scenarios. Furthermore, we forecast the corresponding CO 2 emissions as well as the reduction potential respectively in 2020 and 2025. In order to achieve energy conservation and emissions reduction, the government should increase energy price, levy environmental taxes based on the emissions level of machinery enterprises, promote mergers and acquisitions of enterprises, and expand the scale of enterprises. This paper provides a reference for energy conservation and CO 2 abatement policy in China’s machinery industry.

Keywords: China’s machinery industry; energy conservation; cointegration; Monte Carlo simulation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
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