March, 2013 Journal of Resources and Ecology J. Resour. Ecol. 2013 4 (1) 056-062 DOI:10.5814/j.issn.1674-764x.2013.01.008 www.jorae.cn Vol.4 No.1 Article The Relationship between Patterns of Economic Development and Increasing Carbon Emissions in Western China JIAO Bing* and YANG Fengming Research Center of Resources Environment and Regional Economics, Xi’an University of Finance and Economics, Xi’an 710100, China Abstract: With the implementation of the “Development of Western China” strategy, this region has become the fastest growing economic area in China. However, rapid economic growth has resulted in a substantial increase in carbon emissions and affected energy reduction goals. In order to effectively control the rapid increase in carbon emissions across western China, we need a comprehensively analyze the main factors causing these increases. Here, we analyze the relationship between economic development patterns and carbon emissions. The findings suggest that consumption upgrades and industrial transformation have a positive correlation with carbon emissions in this region. We then conducted an econometric FGLS analysis on the relationship and its transmission mechanism between economic growth and CO2 emissions with cross-province panel data from 1991 to 2009. A positive correlation was found, and the relationship is more significant after the implementation of the western development strategy. The influence coefficient of change in primary, secondary and tertiary industries is 16.4. The influence coefficient of increased share of heavy industry and extractive industry in the secondary industry is 14.3, and the influence coefficients of per-capita living expenditure and per capita traffic expenditure are 5.6 and 6.5. Traditional population size and income scale have a weak impact on carbon emissions, and the influence coefficients of population size and income scale are only 0.73 and 0.86. GDP increases have a second major impact on the carbon emissions. Energy intensity has a negative relationship with carbon emissions and urbanization level has a positive relationship (coefficients are -8.2 and 4.65). Key words: economic growth pattern; carbon emission; consumption upgrade; industrial transformation 1 Introduction Reducing greenhouse gas emissions and achieving lowcarbon economic development have become important measures to combat climate change internationally. With rapid economic development, China is facing increasingly grim carbon emissions. According to the IEA, China’s carbon emissions had surpassed the USA and become the world’s largest emitter in 2009. As a responsible and large country, China has committed to an emissions reduction target of 40%–45% that of 2005 levels. With implementation of the “Development of Western China” strategy, this region in China has become the fastest growing region in China. In order to stimulate economic growth, the government proposed a series of policies. As these policies are implemented, the western region faces challenges from economic structure adjustment, industrial transformation and consumption upgrade. These changes will lead to increased carbon emissions, so the relationship between patterns of economic development and carbon emissions needs to be understood. 2 Literature review After nearly 20 years of exploration, Yoichi Kaya, a Japanese researcher, proposed the Kaya identity in Intergovernmental Panel on Climate Change (IPCC) seminar in 1990. He suggested that increases in carbon emissions depends on four factors: population (P), per capita GDP (G), the energy consumption per unit of GDP (IE, energy intensity) and the energy structure (IC, carbon intensity). The Kaya identity Received: 2012-10-17 Accepted: 2013-01-24 Foundation: Humanity and Social Science Youth foundation of Ministry of Education of China (12YJC790082); National Social Science Fund Key Project (11AJL007). * Corresponding author: JIAO Bing. Email: [email protected]. 57 JIAO Bing, et al.: The Relationship between Patterns of Economic Development and Increasing Carbon Emissions in Western China As a result, this partially reduced carbon emissions. (4) The process of urbanization. Martínez-Zarzoso et al. (2007) examined the relationship between urbanization and carbon emissions using provincial panel data from 1975 to 1998 in 86 countries. They found that the process of urbanization in developing countries had a significant positive impact on carbon emissions. Overall, the spatial dimension of research on the relationship between economic development and carbon emissions is basically focused on the transnational level. Studies focused on the regional level are very few. These researches had tended to not focus on the impact of industrial transformation and consumption on carbon emissions. Fan et al. (2010) measured carbon emissions reduction targets for each country on the basis of final consumption. Lin and Jiang (2009) made an empirical analysis on the relationship between carbon emissions and economic development using the Environmental Kuznets model. The result showed that the theoretical inflection point of Chinese CKC should be reached when per capita income hits 37 170 CNY in 2020. Xu and Song (2010) studied the existence of an Environmental Kuznets Curve for China based on Chinese Provincial Panel Data from 1990 to 2007. The result showed an upside-down U-shaped EKC curve in central and eastern China. However, the curve does not exist for western China. Zhang (2010) looked at the impact of economic development mode changes on carbon emission intensity from 1987 to 2007 using the input-output structural decomposition method. 3 Preliminary statistical observation Growth in GDP per person from 1991 to 2009 was used as the economic growth indicator, and an average annual rate of carbon emissions from 1991 to 2009 was used as carbon emissions indicator (Fig. 1). Data includes 11 western provinces and autonomous regions in China. Carbon emissions in the wealthier areas of the western region, such as Inner Mongolia Autonomous Region and Shaanxi, are higher than for underdeveloped areas, such as Yunnan, Guizhou and Ningxia Hui Autonomous Region. 28 Economic growth rate (%) had been accepted by the IPCC and become the world’s first system to estimate carbon emissions. Cramer and Cheney (2000) estimated the impact of California’s population growth on the environmental pollution using the Kaya identity. The result showed that only CO2 emission had a positive correlation with the size of the population, other environmental pollutants had no significant relationship with population size. Holdren (2000) proposed another IPAT method to estimate carbon emissions. The core idea of the method is that a region’s carbon emissions depend on three factors, namely population size (P), the social impact (A) and technology effects (T). Fischer (2001) used IPAT to estimate carbon emission impact factors and found that income is the most important factor, and the influence of technical factor on carbon emissions is the most extensive factor. IPAT has become one of the major carbon emission estimation methods. Since Grossman and Krueger (1995) first proposed the carbon environmental Kuznets curve (CKC), many empirical tests found that there was an inverted U-shaped curve between carbon emissions and economic development, and the CKC inflection point emerged in the USA, Germany and other developed countries. Copeland and Taylor (2009) used the IPAT method and introduced a per capita income indicator to estimate the relationship between carbon emissions and economic growth. They found that CKC is not a U-shaped curve, but monotonically increasing in developed countries. Auffhammer and Carson (2009) tested CKC of China with Chinese cross-province panel data provided by China Environmental Protection Bureau in 1985–2004. By constructing a CGE model, they found that China would have maintained rapid carbon emission increases for a long time and would not soon emerge from the CKC inflection point. There are four main themes in this research field : (1) Economies of scale. The scale effect has two main parts: population size and income scale. Shi (2003) tested the relationship between population and carbon emissions by taking panel data of 96 countries from 1975 to 1996, and found that the impact of population size on carbon emissions is greater in low-income countries than highincome countries. Hamilton and Turton (2002) found that per capita income and the size of the population are more important for carbon emission increases in OECD countries than other factors. (2) Structural effects. Structural effects mainly refer to the energy intensity structure and input-output structure. Stern (2002) found that the change in energy intensity structure had a significant impact on increasing carbon emissions, whereas the change of input-output structure had little impact. (3) Technical effect. Bruvoll and Medin (2003) revealed that energy intensity increases induced by economic structural adjustment was the top cause of the rapid rise in carbon emissions from 1913 to 1970. After 1970, technical progress was an important reason to reduce energy intensity. Inner Mongolia 26 24 22 Shaanxi 20 Guizhou 18 Yunnan 16 14 5 Guangxi Xinjiang Ningxia Qinghai Sichuan 10 15 20 Growth rate of CO2 emission (%) 25 30 Fig. 1 Relationship between economic growth and carbon emissions in western China, 1991–2009. 58 Journal of Resources and Ecology Vol.4 No.1, 2013 1.5 Inner Mongolia Sichuan CO2 emission (100 Mt) Carbon emissions (100 Mt) 1.5 1.0 Shaanxi 0.5 0 Ningxia Xinjiang Yunnan Guangxi Guizhou Qinghai 30 35 40 Engel coefficient (%) Sichuan 1.0 Yunnan 0.5 Guangxi Guizhou Xinjiang Shaanxi Ningxia Qinghai 0 45 Inner Mongolia 35 50 40 45 50 55 60 Industry structure (%) Fig. 2 Relationship between consumption upgrade and carbon emission in western area, 1991–2009. Fig. 3 Relationship between industrial transformation and carbon emissions, 1991–2009. Therefore, there is a positive correlation between economic development and carbon emissions. Consumption upgrade in the western region will reduce the Engel coefficient, and the increase in the expenditure of durable consumer goods, automobiles and housing will inevitably have an impact on carbon emissions. The relationship between urban residents’ Engel coefficient and carbon emissions is shown in Fig. 2. It can be seen from Fig. 2 that the lower the Engel coefficient, the higher the carbon emissions. This is consistent with empirical results (Martínez-Zarzoso et al. 2007). With the implementation of the “Development of Western Regions” Strategy, the proportion of secondary industry has grown in western China. As the development of the secondary industry requires a huge amount of energy, it will result in increased carbon emissions in the west (Fig. 3). Provinces with a higher proportion of secondary industry in the western region will emit more carbon (Fig. 3), which also is consistent with experience. There is a positive correlation among economic growth, consumption upgrade, industrial transformation and increased carbon emissions in the western region of China. The change in economic development had a significant effect on carbon emissions. constant vector, a1, a2, a3 and a4 represent the coefficient vector, and ε represents random disturbance. Because of differences in economic development levels, population size and regional characteristics, the absolute value index is not suitable for lateral regional comparative assessment, so relative value indicators were chosen to measure economic variables. 4 Model specification and variable description ∑ NX 4.1 Model specification Based on improvements to Holdren (2000) and MartínezZarzoso et al. (2007), we built up the following panel data regression model: Eti=a0+a1lnGDPti+a2Cti+a3INDti+a4Zti+εti where, Eti represents the annual growth rate of carbon emissions, ln GDPti represents the natural logarithm of the growth rate of per capita GDP, C t i represents the consumption structure vector, INDti represents the vector of the industrial structure, Zti represents the vector set to join other control variables, i is corresponds to the cross-section of the various provinces units, t represents the year, a0 is a 4.2 Variable description 4.2.1 Description of carbon emissions The current method to calculate carbon emissions is IPAT, but we argue that this approach has several drawbacks: (1) It relies on fixed carbon emission factors of each type of energy, but it is difficult to reflect the impact of technological advances. (2) In the calculation of carbon emissions, it is difficult to determine the carbon reduction target among all regions. Therefore, we use the national income method provided by Fan et al. (2010) to calculate carbon emissions. Here, an expenditure approach is used to calculate national income in western China as follows: Y = C + I + NX where, Y represents western national income; C represents total consumption; I represents total investment; NX represents net exports. Import and export impacts will offset each other over the long-term. Therefore, we believe that ∞ t =0 t = 0 (t represents time). Then, the calculation of carbon emissions will only consider two components of consumption and investment as follows: E = (C + I) × T × f E represents total carbon emissions; T represents energy consumption per unit of GDP; f represents the carbon emission coefficient of energy consumption per unit of GDP. In the process of calculating carbon emissions we used consumer spending and investment spending data as well as energy consumption per unit of GDP from the Statistical Yearbook (Fig. 4). Carbon emission factors are weighted 7 6 5 4 3 2 1 0 59 4.2.3 Data sources 9 8 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Carbon emissions (100 Mt) JIAO Bing, et al.: The Relationship between Patterns of Economic Development and Increasing Carbon Emissions in Western China Year Fig. 4 Carbon emissions of western China in 1991–2009. based on carbon emission factors of three kinds of primary energy as calculated by the IPCC. As shown in Fig. 4, the amount of carbon emissions in western China from 1991 to 2009 continues to increase. Especially during 2000 to 2009, the amount of carbon emissions has tripled. Therefore, China’s western region is facing severe pressure to reduce carbon emissions. We used indicators of carbon emission average growth rate per annum (E) as a measure of carbon emissions. 4.2.2 Other variables With a stimulus-fuelled boom in domestic demand in western China, we chose the per capita durable consumer goods growth rate (RC), the car growth per capita (MC), and the per capita housing growth (HC) as measures of consumption structure indicators. In the process of industrial transformation in western China, the major subject is adjustment of thrice industrial structure and acceptance transferred industry of eastern region. We used the proportion of secondary industry growth rate (SIND) and the manufacturing sector growth rate (MIND) as measures of industry structure. According to existing literature, the model control variables Z include population size, income scale, energy intensity and urbanization degree. Here we selected the annual population growth rate as a measure of population size, average annual growth rate of per capita income (INC) as a measure of income scale, added value of the primary energy usage of GDP (RI) as a measure of energy intensity indicators, and proportion change rate of urban population (URB) in total population as a measure of urbanization. Considering the actual situation as well as the availability of data in China, the starting point for our research was 1991. The latest statistical data allows us to extend the study period to 2009. Due to a lack of separate statistics in Chongqing before 1997, we incorporated Chongqing into Sichuan. The sample rage of the research includes 190 observation samples during 1991–2009, and the crosssectional unit contains Inner Mongolia, Guangxi, Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia, and Xinjiang. Data was from the China Statistical Yearbook, China Industrial Economy Statistical Yearbook, China Statistical Yearbook and Provincial Statistical Yearbook, the Provinces Statistical Bulletin and INFOBANK Databases (www.bjinfobank.com). 5 The relationship between western economic development and carbon emissions Panel data estimation methods included polymerization least squares regression (Pool OLS), fixed effects (fixed effect) model, random affect (random effect) models. From the data structure, there are more obvious heteroscedasticity and sequence autocorrelation in the error term of the regression equation. So generalized least squares (FGLS) estimation will be the most feasible estimation method. The results are shown in Table 1. Carbon emissions in western China rose by 230% from 1991 to 2009. Before the development of this region, the speed of rise in carbon emissions was 10.83% in 1991–1999, an average annual growth rate of 1.2%. After implementation of the western development strategy, the rise in carbon emissions was 198% from 2000–2009 and the average annual increase rate was 21.96%. 5.1 Economic growth In 1991–2009, the impact of economic growth in western China on carbon emissions is significant, and the contribution rate reached 14.61%. Raupach (2007) found that in the initial stage of economic development, economic take-off will bring a rapid increase in carbon emissions. Before the “Development of West Regions” campaign in 1999, the western regional average annual GDP growth rate was only 7.3% and its impact on carbon emission growth was 9.78%. Following implementation of the strategy the economic growth rate soared to 11.9% and its effect on Table1 Impact of economic development on carbon emission in western China in 1991–2009. Consumption upgrade Per capita (%) GDP growth Phase Per capita durable Traffic Per capita rate consumer goods expenditure housing (%) spending per capita expenditure 1991–2009 14.61 1.14 6.5 5.6 1991–2000 9.78 3.15 4.67 3.23 2000–2009 16.37 –2.7 8.63 7.85 Industrial Other variables transformation (%) (%) Interior InterPopulation Income Energy Urbanization secondary industry scale scale intensity rate industry 16.4 14.3 0.73 0.86 –8.2 4.65 9.7 9.5 0.69 0.67 1.63 2.56 18.6 16.7 0.82 1.08 –9.73 8.46 60 Journal of Resources and Ecology Vol.4 No.1, 2013 Table 2 Change in consumer structure and industry structure in western China in 1991–2009. Year 1991 1995 1999 2002 2005 2009 Consumption upgrade (%) Industrial transformation (%) Growth rate of Growth Growth Industry structure The second industry growth rate per capita durable rate of per rate of per Industry Architecture consumer goods capita traffic capita living Agriculture Manufacture Service Mining and Heavy Light industry quarry industry expenditure expenditure expenditure industry industry 3.7 4.4 4.9 5.6 3.8 2.9 5.2 6.4 7.2 10.9 11.3 12.4 7.3 8.4 10.2 11.1 12.3 13.7 31 30 26 16 14 12 carbon emissions rose to 16.37%. 5.2 Consumption upgrade From 1991 to 2009, China’s consumption structure change was significant (as shown in Table 2). Especially after the outbreak of the global financial crisis in 2009, China’s economic growth pattern is gradually moving away from export-led growth and towards domestic consumption. The government has issued a series of positive policies to stimulate the need of domestic consumption. 5.2.1 Per capita durable consumer goods expenditure The growth rate of per capita durable consumer goods expenditure in western China peaked in 2002, more than 5%. Since then, the situation has become worse and worse. The growth rate began to decline in 2009, which was only 2.9%. Because the regeneration period of home appliances is about ten years, the growth rate of durable consumer goods, for the next few years at least, is comparatively little. At the same time, with the development of environmental protection, the impact of durable consumer goods on carbon emission has been minimal. 5.2.2 Per capita transportation spending The growth rate of per capita expenditure on transport in western China continued to increase from 1991–2009. Before 2000, per capita expenditure on transport grew only 7.2%. Since 2000, the growth rate has exploded, reaching 12.4% in 2009. Since the low-carbon development pace of the automobile industry is relatively slow, the rise of cars results in increased carbon emissions, especially after 2000; the influence coefficient was 8.63. 5.2.3 Per capita living expenditure The growth rate of per capita living expenditure in western China increased from 1991 to 2009. In 2009 the growth rate reached 13.7%, which shows that since 2000 and the expansion of gross floor area in western China, carbon emissions increase. The impact of per capita living expenditure on carbon emissions in western China is 5.6. 35 38 41 47 48 52 33 32 32 37 38 36 24 25 33 34 43 45 19 27 33 35 42 45 8 11 19 21 20 21 11 16 17 21 23 28 5.3 Industrial transformation 5.3.1 Industrial structural change Structural changes of three industries in western China result in increased carbon emissions from 1991 to 2009. This effect is mainly due to the sharp rise of nonagricultural sectors and a declining agricultural sector (as shown in Table 2). The share of total output arising from the manufacturing industry rose to 52% in 2009, up from 35% in 1991. Service industry output rose to 36% of output in 2009, but the growth rate was relatively slow. The share of agricultural output shrunk to 12% in 2009 from 31% in 1991. This change reflects industrial transformation across western China. Industrial structural change contributed 16.4% of total carbon emissions in 2009. Western China’s agricultural output fell by 14 % from 2000 to 2009, and the proportion of total industrial output rose 11% at the same time. These changes led to the impact of industrial structural adjustments on carbon emissions hitting 18.6 since 2000. 5.3.2 Changes in internal structure Changes in industry internal structure caused carbon emissions to grow by 14.3% from 1991 to 2009. Further analysis shows that changes in industry internal structure are mainly from extractive industries and heavy industry (Table 2). From 1991 to 2009, the growth rate of the extractive industry increased from 24% to 45%. Especially after 2005, extractive industries exhibited explosive growth trends. The growth rate of heavy industry reached 45% in 2009. The extractive industry and heavy industry are high energy-consumers and inevitably result in increased carbon emissions. 5.4 Other factors 5.4.1 Population size Since large-scale development began in western China, the population size has been relatively stable (Fig. 5). Population size is an important factor in other research, but its impact on the carbon emissions of western China is only 0.73. 61 0.68 0.67 0.66 0.65 0.673 0.637 0.63 0.62 0.61 0.60 0.59 0.48 0.46 0.659 0.65 0.647 0.64 0.668 Engel coefficient Population growth rate (%) JIAO Bing, et al.: The Relationship between Patterns of Economic Development and Increasing Carbon Emissions in Western China 0.629 0.62 0.44 0.42 0.40 0.38 0.36 0.34 2002 2003 2004 2005 2006 Year 2007 2008 2009 Fig. 5 Population growth rate in western China from 2002– 2009. 5.4.2 Income scale Household annual income increased on average 10%, making western China one of the nation’s fastest growing regions. Increasing household income leads to a reduction in the urban resident Engel coefficient (Fig. 6). As can be seen in Fig. 6, the urban residents Engel coefficient declined from 47.5% in 1995 to 36% in 2009. This indicates that living standards continuously improved. However, the impact of income scale on carbon emissions was only 0.86, a lesser value than that reported by other studies. 5.4.3 Energy intensity As the low-carbon development pattern was implemented, energy intensity in western China declined from 1991–2009, and the contribution of this factor on carbon emissions was –8.2%. Industrial energy intensity declined from 1991– 1999, while energy intensity in the agricultural herd fishery, service and construction industries increased. This led to a slight rise in the production department’s energy intensity and the contribution of energy intensity on carbon emissions moved from positive to negative. Overall, from 1991 to 2009 the average contribution of production department energy intensity was –8.2. 5.4.4 Urbanization In 1991, western China’s urbanization rate was below 19.3%. However, with continuous development, the urbanization rate rose to 36.2% in 2009. With an increasing urban population, the impact on carbon emissions is greater and greater. According to empirical test results, the impact of western China’s urbanization rate on carbon emissions was 4.65 in 1991-1999, and rose to 8.45 in 2009. 6 Conclusions and policy implications (1) Empirical observation shows that carbon emissions increased in step with economic development, but an inflection point did not appear during 1991–2009. The lower Engel coefficient in western China, the higher the amount of carbon emissions. The larger the proportion of secondary industry, the higher the carbon emissions. 0.32 1995 1997 1999 2001 Year 2003 2005 2007 2009 Fig. 6 Engel coefficient of urban residents in western China in 1995–2009. (2) Results of panel-data analysis show that there is a positive correlation among economic growth, consumption upgrade, industrial transformation and carbon emissions. Increasing carbon emissions was mainly due to the rise in per capita GDP, consumption upgrading and industrial transformation. The impact of population size and income scale on carbon emissions is less than for other areas. In 1991–1999, the impact of economic growth on carbon emission was minimal, however with the implementation of the West Development Strategy, the influence of consumption upgrade and industrial transformation on carbon emissions has increased. (3) Because consumer upgrading has had a major impact on western China’s carbon emissions, emphasis should be placed on both the consumption process and production process when the government is developing policy about energy savings and emission reductions. For example, when introducing appliances and automobiles to households, environmentally friendly products should be subsidized. In the meantime, when constructing traffic facilities and houses, large buildings and fuel-hungry vehicles should be strictly controlled. 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(in Chinese) Zhang Y G. 2010. The impact of economic development mode chang on China’s carbon emissions intensity. Economic Research Journal, 35(4):120-133. (in Chinese) 西部地区的经济发展模式与碳排放量增长关系的实证研究 焦 兵, 杨凤明 西安财经学院 资源环境与区域经济研究中心,西安 710100 摘 要:随着“西部大开发”战略的深入实施,西部地区已经成为我国经济发展最快的区域,然而西部经济的快速增长已 经造成了碳排放量的大幅增加,严重影响了我国节能减排目标的实现。为了有效地控制西部地区碳排放量的急速增加,我们必 须全面分析引致西部碳排放量增加的主要因素。本文在已有研究的基础上,从西部地区产业转型和消费升级的视角出发,利用 1991—2009年的省际面板数据对西部地区的经济发展模式与碳排放量增长之间的相关关系及其传导机制进行了实证检验。检验 结果表明:自进入上世纪90年代以来,西部地区的经济发展与碳排放量增长之间存在显著的正相关关系,而且在西部大开发战 略实施以后,这种关系更加显著。同时,检验还发现西部地区的消费升级和产业转型对碳排放量增加产生重要影响,其中三次 产业间结构变动的影响系数达到16.4,二次产业内部采掘业和重工业比重上升的影响系数达到14.3,人均居住支出和人均交通 支出的影响系数也分别达到5.6和6.5,而传统的人口规模、收入规模则对西部地区碳排放量的影响微弱,影响系数仅为0.73和 0.86。因此在制定西部地区“十二五”节能减排战略时,需要更多的从消费升级和产业转型的视角出发。 关键词:经济发展模式;碳排放量;消费升级;产业转型
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