中国结构变化与能源利用2007

China Working Paper Series No. 6 Structural Change and Energy Use: Evidence from China’s Provinces By Bert Hofman and Kelly Labar1 First Version: November, 2006 This version: April 2007 Abstract This paper investigates the extent to which structural change in China’s economy has contributed to changes in energy intensity. It uses a new province-level data set on energy intensity over the period 1990-2004. The main findings are that energy intensity of provincial economies comes down with higher GDP per capita. Most of the reduction in energy intensity has come from intra-sectoral energy savings in industry, with sectoral shifts playing a minor role, but this role is larger in the richer provinces, which have expanded their share of services in GDP. The recent rebound in energy intensity in China’s economy can in part be ascribed to a sectoral shift towards industry in the majority of provinces, but this is offset by continued efficiency gains within industry and other sectors. The exception to this trend is one province, which saw a sharp increase in energy intensity and which drives the results for China as a whole over 2001-4. Beyond structural change we find that energy intensity is negatively correlated with energy price, the efficiency within the energy sector and the share of light industry in provincial GDP, and positively with the share of state enterprises in industrial output. 1 World Bank and University of Clermont-Ferrand. Corresponding Author: Bert Hofman, bhofman@worldbank.org. This paper was written while Labar was a visiting scholar at the World Bank China Office in Beijing. The authors would like to thank Louis Kuijs, Trevor Houser and Jie Li for very helpful comments. The paper is a background study for the World Bank’s forthcoming Country Economic Memorandum for China. The views represent those of the authors, and should in no way be attributed to the World Bank, its Executive Directors or its member countries. 1. Introduction China’s energy use is of considerable interest to the authorities and to the world. China is already the second largest energy user in the world after the United States, and emits the second largest amount of greenhouse gases in the world, again after the United States, most of it due to energy, particularly coal, which accounts for some 70 percent of China’s energy production. China’s rapid growth is also putting considerable pressures on world energy prices, particularly in oil: between 2002 and 2005, about 1/3 of additional global energy demand came from China. China’s energy use per capita is still low (less than 10 percent of that of the United States) but the energy intensity of its economy is high, at least if measured in current dollars:2 some four-six times that of advanced countries. At the level of individual processes, the discrepancy is less, but China still uses some 30-100 percent more energy in a variety of production processes. China’s high economy-wide intensity can be explained by the composition of GDP, which in China is much more geared towards industry compared to all high income countries and most other developing countries. During the 1980s and 1990s, energy intensity of China’s economy saw a rapid decline (Figure 1). However, in recent years, this development seems to have come to an end, or even went into reverse, as the energy intensity of the economy started to increase. The recent increase in energy intensity in China’s economy has raised considerable concern in China and abroad. If recent trends prevail, China’s energy needs are set to rise rapidly, could affect the country’s energy security, and could become a threat for the local and global environment. In response to these trends, the Government has set ambitious targets regarding energy efficiency for the 11th Five Year Plan: over the period 2006-10, energy intensity of the 2 Energy intensity numbers in terms of GDP measured in Purchasing Power Parity is far lower (less intensive) than that measured in current dollar GDP. The reason for this could be that the data on China’s PPP factor, which are based on partial survey results from the late 1980s are no longer reliable. Academic estimates as reported in OECD (2005) suggest that the PPP factor is lower than the World Bank’s 4.5. A lower PPP factor would diminish the discrepancy between energy intensity in current exchange rates and in PPP. Figure 1: China’s Energy Intensity 1995-2004 2,2 2,4 2,6 2,8 3 3,2 3,4 3,6 3,8 4 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 E ne rg y In te ns ity C oa l E qu iv al en t, to n/ R m b 10 0 00 G D P Source: China Energy Yearbook, Various issues, and NBS (2006) Note: the figure uses China’s revised GDP numbers (1990 constant prices) released in December 2005 by NBS and revised energy use numbers from China Energy Yearbook 2005. economy is to be reduced by 20 percent, or some four percent per year. The target is to be achieved by a combination of energy efficiency and structural shifts towards less energy intensive sectors, notably services. Internationally, there is some evidence that structural change affects energy use (Schäfer (2005), Lewis (2003)). In general, the service sector is less energy intensive than the industry, which is more energy intensive than agriculture. As countries develop and GDP increases, sectoral composition shifts from agriculture to industry to services, and thus one would expect that energy intensity first increases, and then decreases as countries grow richer. Residential energy use is likely first to decrease with rising income, as households shift from inefficient biomass to more efficient forms of energy, but later to rise, as people start living in larger houses and start using modern appliances, notably air conditioners in some countries. At the same time, reductions in energy intensity within sectors take place, under influence of technological progress, better management, infrastructure investments, and the like. These two factors, structural change and changes in energy intensity per sector, account for the change energy intensity of the economy. This paper explores to what extent structural change and changes in sectoral energy intensity can contribute to China’s energy saving goal. For this purpose, we analyze the sectoral shifts and changes in energy intensity that have taken place in China’s provinces over the period 1990-2004. Although for most countries 15 years is too short a period to show significant structural change, for China, which has been growing with almost 10 percent a year over the last 15 years, it offers significant change in energy intensity, sectoral structure of GDP, and energy intensity per sector. Using provincial panel data greatly increases the potential for analyzing this relationship, as China’s 30 provinces are at very different stages of development and therefore show considerable variety in growth rate, sectoral composition of GDP and energy use. The main contribution of this paper is the decomposition and analysis of energy intensity at the national level into regional shifts in sectors and shifts in energy intensity per sector and region. To our knowledge, this has not yet been done for China. Hu and Wang (2006) use regional data and a production function approach to assess energy efficiency per region, but do not consider underlying factors that determine the level of efficiency. Fischer-Vanden et. al. (2006) analyze China’s energy intensity using enterprise level data. Garbaccio, Ho, and Jorgenson (1999) and Lin and Polenske (1995) analyze the decline in China’s energy intensity with sub-sectoral data. Zhang (2006) investigates the impact on energy intensity of structural change and energy efficiency improvements for China at the national level per sub-industry, with techniques similar to Schäfer (2005) and the ones we use here, and finds that energy efficiency improvements dominate in the reduction of energy intensity. This is consistent what we find for province level data, but using our province-level dataset we find a wide variety in the importance of structural change and energy efficiency among provinces and among time periods. The paper is organized as follows. Section two describes the data we use for our analysis. Section four briefly describes the national-level decomposition of energy intensity reduction into structural change and energy efficiency improvements. Section four describes the provincial level developments of energy intensity and structural change, and section five formally decomposes the observed changes into sectoral shifts and within sector energy intensity changes. Section six analyzes the relative importance of sectoral changes versus other variables that may affect energy intensity, including energy prices, ownership structure, and sub-sectoral composition of output. Section seven concludes. 2. The Data We are using panel data for 30 provinces from 1990 to 2004. Tibet is excluded from the analysis and we grouped Chongqing and Sichuan for the 1996-2004 period when it was necessary to compare before and after the 1996 periods. We used national and provincial Statistical Yearbooks, accessed through All China Data on-line to obtain general economic data such as GDP, shares of primary, secondary and tertiary sectors in total GDP, share of light and heavy industries in total gross output values or share of state or collective enterprises in total gross output value. China’s sectoral classification differs from international convention: the “primary” sector is equivalent to agriculture, “secondary” includes mining, manufacturing and construction, and “tertiary” includes transport and other services. Gross output value data contain a structural break between the years 1997 and 1998 when the registration system for industries changed. As no correction has been done for these data in the official statistics, we will control for this break when necessary. Data on energy consumption come from the China Energy Statistical Yearbooks and from the Energy Databook (China Energy Group, Various Years). Energy balances for each province are available for the year 1990 and between the years 1995 and 2004. Published data include energy consumption for each energy product distributed among agriculture, industry, construction, transport, services and residential sector. Some energy data are not available for the whole period. We converted each kind of energy consumption into ton coal equivalent (TCE) using conversion factors reported in the China Energy Statistical Yearbook. For briquettes and “other petroleum product”, we used the conversion factor of raw coal and the average of conversion factor for petroleum products respectively, because the yearbook does not include a separate conversion factor for these two categories .We constructed total energy consumption as the sum of all energy products consumption in TCE, with the exclusion of the category “other energy” for which we could not find a reasonable conversion factor into TCE. Consequently, there exists an approximately constant difference between the total energy consumption given by statistical yearbooks and the one we calculated. The evolutions of energy consumption calculated and energy consumption given by the statistical books are broadly the same. 3. Aggregate patterns of energy use and structural change Over the period 1990-2004, China’s energy use increased from 966 MTCE to 2032 MTCE. As already shown in Figure 1, energy intensity showed a steep drop over the whole period, but an upturn since 2001. Energy intensity throughout the period more than halved, from 5.33 TCE/RMB 10 000 GDP in 1990 to 2.56 TCE/RMB 10 000 GDP in 2004. Throughout this period, sectoral shares in energy use remained remarkably stable (Figure 2), and were dominated by the secondary sector (Industry and construction), which uses some 70 percent of all energy in China followed by Residential, whose share declined from 16 percent in 1990 to 11 percent in 2004, and Tertiary (Services and Transport) whose share increased from 6 to 11 percent in the same period, largely because of an increase in the share of transport. The relatively stable shares in energy use mask a combination of strong variety in changes in sectoral energy intensity as well as structural change. Table 1 provides a decomposition of the decline in energy intensity in sectoral shifts and energy intensity change. It shows that China’s rapid decline in energy intensity is mainly caused by a decline in energy intensity in industry, offset by an increase in the GDP share of industry. Energy intensity in the primary and Tertiary sectors are relatively constant, whereas energy intensity in the residential sector showed a small decline. Figure 2: Sectoral Shares in Energy Use 1995-2004 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 1990 1992 1994 1996 1998 2000 2002 2004 Residential Tertiary Primary Secondary Source: China Energy Yearbook, Various issues, and NBS (2006) Note: The figure uses the Chinese classification of sectors. Primary is agriculture; secondary comprises industry and construction; tertiary comprises services including transport. The category “Others” which takes up some 4 percent of total energy use, I omitted from the chart. . Table 1: Sectoral decomposition of changes in China’s energy intensity Contribution to decline in energy intensity 1990/2004 Primary Secondary Tertiary Residential Share in total consumption 1990 0.04 0.72 0.08 0.13 Change in sector energy intensity 0.97 0.53 0.96 0.84 Shift in GDP 0.96 1.17 1.01 n.a. Sub total 0.95 0.62 0.97 0.84 Source: Author’s estimates based on Provincial Statistical Yearbooks and China Energy Statistics 4. Structural Change and Energy Use in China’s Provinces Provincial patterns of energy intensity are more differentiated. The combination of different stages of development in China’s 30 provinces, the variety in their production pattern, and the variety of energy efficiency within the sectors, a much more varied picture in energy intensity emerges (Figure 3). The broad pattern is that richer provinces have considerably lower energy intensity than poorer ones. Also, by and large all of the provinces show a decline in energy intensity with rising GDP per capita—the exception being Shanxi province. At every level of GDP per capita, the variation in energy efficiency among provinces is also considerable. This pattern of energy intensity and development should give some comfort to the Chinese authorities that aim to reduce energy intensity: as provinces grow richer, the energy intensity of their economies tends to drop.3 On the other hand, in light of the variety in energy intensity at every level of income, there still seems to be considerable scope for increasing the energy efficiency of most provinces at every level of GDP. Underlying this aggregate pattern of energy intensity and development are changes in the sectoral shares of energy and energy efficiency per sector as well as sectoral shifts in the economy. The sectoral share of energy use is plotted in Figure 4. Constrained by the Chinese sector classification, we plot 4 sectors: primary, secondary, tertiary, and residential use. The emerging patterns in the sectoral shares in energy use for China’s provinces over time are remarkably similar to those presented in Schäfer (2005). The share of the primary sector shows a continuous decline as provinces grow richer, but the secondary sector shows at first a rise, and then a fall in the share of energy use. The tertiary sector shows a more mixed pattern at low levels of income, but a rising trend at 3 It should be noted that the richest provinces are predominantly city-provinces, that are likely to have their own idiosyncrasies in production pattern and energy use that may not be achievable for other provinces. Figure 3: Energy Intensity per Province and Regional GDP per capita 1990-2005 2 4 6 8 10 12 0 10000 20000 30000 GDP per capita (RMB, constant 1990 prices) Energy Intensity (ton coal equivalent per RMB 10,000 GDP, 1990 prices) Source: China Energy Yearbook, Various issues, and NBS (2006) Note: The category “Others” which takes up some 4 percent of total energy use, is omitted from the energy consumption calculated. higher levels of income. This is consistent with a pattern of development that first relies on industrialization, but at higher levels of income increasingly relies on services. Moreover, at higher levels of income, personal transport is playing an increasingly large role, and explains much of the rapid growth in energy share of this sector in the high income provinces. The residential share of energy use reflects the inefficient sources of energy for household use at lower levels of income (biomass, coal) and the switch to more efficient sources of energy at higher levels, as households get connected to the electricity and gas net. Figure 4: GDP per Capita and Sectoral Shares in Energy Use Per Province 1990-2004 Primary Sector Secondary Sector 0 2 4 6 8 10 S ec to r's s ha re in to ta l c on su m pt io n, % 0 10000 20000 30000 GDP per capita (Yuan) 50 60 70 80 90 S ec to r's s ha re in to ta l c on su m pt io n, % 0 10000 20000 30000 GDP per capita (Yuan) Tertiary Sector Residential 0 5 10 15 20 25 Se ct or 's s ha re in to ta l c on su m pt io n, % 0 10000 20000 30000 GDP per capita (Yuan) 0 10 20 30 Se ct or 's s ha re in to ta l c on su m pt io n, % 0 10000 20000 30000 GDP per capita (Yuan) Source: China Energy Yearbook, Various issues, and NBS (2006) Note: The figure uses the Chinese classification of sectors. Primary is agriculture; secondary comprises industry and construction; tertiary comprises services including transport. The category “Others” which takes up some 4 percent of total energy use, is omitted from the chart. The underlying dynamics in sector shares of energy use is more complex. It is the result of a change in sectoral energy intensity and sector share. Especially the sector energy intensities have changed considerably over time in China’s provinces, with the rapid decline in energy intensity of the industrial sector standing out at almost every level of income (Figure 5). Energy intensity in all sectors except agriculture is strongly correlated with income levels, which also holds true for China as a whole. There is no clear pattern in the agricultural sector—basically, the energy intensity of the sector does not improve with income. In contrast, the industrial sector shows a clearly negative correlation between income and energy intensity. The services sector displays falling energy intensity up to a level of GDP of about RMB 6000 per capita, but then there is a slightly rising tendency afterwards. The strong rise of this sector’s share in total energy use at high levels of income can therefore be explained with a shift in GDP towards that sector. Figure 5: Sectoral Energy Intensity per Province, 1990-2002 Primary Sector Secondary Sector 0 1 2 3 E ne rg y in te ns ity C oa l E qu iv al en t, to n/ R m b 10 0 00 G D P 0 10000 20000 30000 GDP per capita (Yuan) 0 5 10 15 En er gy in te ns ity C oa l E qu iv al en t, to n/ R m