Embodied energy and intensity in China's (normal and processing) exports and their driving forces, 2005-2015

Bangzhu Zhu; Bin Su; Yingzhu Li; Tsan Sheng Ng

doi:10.1016/j.eneco.2020.104911

Embodied energy and intensity in China's (normal and processing) exports and their driving forces, 2005-2015

Energy Econ. 2020 Sep:91:104911. doi: 10.1016/j.eneco.2020.104911. Epub 2020 Aug 29.

Authors

Bangzhu Zhu¹, Bin Su², Yingzhu Li³, Tsan Sheng Ng^{2

4}

Affiliations

¹ Business School, Nanjing University of Information Science & Technology, Nanjing, China.
² Energy Studies Institute, National University of Singapore, Singapore.
³ School of Public Affairs, Zhejiang University, China.
⁴ Department of Industrial Systems Engineering and Management, National University of Singapore, Singapore.

Abstract

International trade has important impacts on a country's energy consumption. This paper first uses the time-series (2005-2015) extended input-output database to study China's embodied energy and intensity in both normal and processing exports. Structural decomposition analysis (SDA) is then applied to analyze the driving forces behind the embodiment changes. The empirical results show that China's energy embodied in both normal and processing exports first increased in 2005-2008, dropped in 2009 due to the global financial crisis, and then rose again after 2009, and finally dropped in 2014-2015. The embodied energy in trade as a percentage of total energy consumption in China was relatively stable before and after the global financial crisis, at around 28% over the 2005-2008 period, and 22% over the 2009-2015 period. The contribution of the aggregate embodied intensity (AEI) of exports to China's aggregate energy intensity dropped from 30% in 2005 to 21% in 2015. Among China's trading partners, the United States, Japan and Korea together accounted for around half of China's embodied energy and AEI in exports in 2005, but their shares dropped to only one third in 2015. Energy efficiency improvement played the key role in reducing the embodied energy and intensity in China's exports. Similar analysis can be applied to other regions and indicators.

Keywords: Aggregate embodied intensity; China; Energy embodied in trade; Input-output analysis; Processing exports; Structural decomposition analysis.