Reconfiguration of industrial structure to reduce GHG using an input-output model

Abstract

China promises to decrease carbon intensity by 2020 to 40%-45% of the level in 2005. This research proposes industry structural adjustments for industrial sectors from the perspective of reducing carbon emission. To achieve this goal, first, Energy-Carbon-Economy Input-Output (ECEIO) table is designed; second, an optimal input-output model is established, considering international trade, carbon emissions by industry and output by industry to address industry adjustments for reducing carbon emission; third, this model is applied to China's ECEIO table. Results show that: (1) it is necessary to decrease the share of output of energy sectors (i.e. Production of thermal power, heat, and gas) and heavy industry with high carbon intensity (i.e. Smelting and Pressing of Ferrous Metals and Non-ferrous Metals) by over 1%, and to increase the share of output of high-tech industries (i.e. Manufacture of Communication Equipment, Computers and Other Electronic Equipment by 0.41%) and services (i.e. Real estate finance and other service by 1.07%) with low carbon intensity; (2) sector adjustment is sensitive to the energy mix, the speed of economy growth and the tightness of carbon constraints. (3) Assuming that the ratio of renewable energy increases, the increased range of industry adjustment will rise with the reduction of carbon emission and decline in the speed of economy growth. © 2013 PICMET.