Carbon emissions from energy intensive industry in China: Evidence from the iron & steel industry

Abstract

The iron & steel industry is one of the major industrial sectors of energy consumption and CO2 emissions in China. In this paper, we estimate the total factor CO2 emissions performance (TFCP) and the CO2 emission mitigation potential (CMP) in China׳s iron & steel sector using the stochastic frontier analysis technique. During the period of 2000–2011, the average TFCP of China׳s iron & steel industry was 0.780, the cumulative CMP was 835.32 million tons in 12 years, and the average annual CMP was 69.61 million tons. Regional analysis showed that the TFCP is high in the northeastern and eastern regions but low in the central and western inland regions. Since the CMP is affected not only by TFCP, but also by the actual CO2 emissions, both the eastern and western regions have the greatest potential for reducing CO2 emissions. For the eastern region, the realization of the CMP relies on structural reform and government regulation; while for the western region, policies should focus on changing the production pattern and reducing efficiency loss. For all the regions in China, mitigating CO2 emissions should place more emphasis on technical innovation and low-carbon investment.