China's low-carbon industrial transformation assessment based on Logarithmic Mean Divisia Index model

Abstract

The growth in socioeconomic metabolism associated with industrialization is altering the functions of the biosphere, becoming the major drivers of global climate change. An environmental friendly or low-carbon-oriented industrial transition not only would largely improve the patterns and magnitude of physical exchanges among societies and their natural environment, but would also be inextricably linked with regional sustainable development policies which can be effective to achieve post-fossil carbon societies. Above all, several institutional innovations and rules, such as industrial symbiosis and low carbon pathway optimization should be considered in scenario analysis and path selection. In this study, a long term analysis focusing on the industrial system in China is presented. Carbon emission decomposition analysis is used to evaluate the potential of low carbon development, promote policies regarding regional sustainable development and construction of eco-industry. Logarithmic Mean Divisia Index (LMDI) decomposition is applied to carbon emissions in the decomposition of time and space sequence. An analysis of the state of the art of climate change science and of the state of industrial symbiosis attempting to create effective industrial development paths reveals that the LMDI Decomposition method can provide crucial orientation for the negotiations towards a sustainable post fossil carbon societies. Three scenarios are designed for the analysis: the Business as Usual (BaU) scenario, the Carbon Reduction (CR) scenario and the Integrated Low Carbon Economy (ILCE) scenario. Under the assumptions that the share of coal will decline dramatically under the CR and ILCE scenarios from 2009 to 2050 while the share of natural gas and renewable energy will be greatly increased, through the adjustment of energy structure, improvement of energy efficiency and transformation of technical energy merit, energy consumption demand and carbon emission trend in industrial sectors till 2050 in China is simulated, in order to provide the basis for low-carbon industrial transformation in China.