Authors: Karen Fisher-Vanden, Yong Hu, Gary Jefferson, Michael Rock, Michael Toman
The Energy Journal, Vol. 37, China Special Issue, Elsevier, 2016.
In this paper, we investigate the determinants of decline in energy intensity in four Chinese industries - pulp and paper, cement, iron and steel, and aluminum. This paper answers the following key question: For the purpose of promoting energy efficiency, do prices, technology, enterprise restructuring and other policy-related instruments affect various sectors uniformly so as to justify uniform industrial energy conservation policies, or do different industries respond significantly differently so as to require policies that are tailored to each sector separately? We examine this question using data for China's most energy-intensive large and medium-size enterprises over the period 1999-2004. Our econometric results suggest that in all four industries rising energy prices are a significant contributor to the decline in energy intensity over our period of study. China's industrial policies encouraging consolidations and scale economies also contributed to reductions in energy intensity in these four industries.