Estimates of energy demand and energy saving potential in China's agricultural sector

Abstract

This paper analyzed the energy saving potentials of China's agricultural sector by using an econometric approach and a scenario analysis. First a co-integration analysis and an error correction model are employed to analyze the long-term equilibrium relationship between agricultural energy consumption and its influencing factors such as agricultural output, mechanical power, agricultural industrial structure, fiscal expenditure and energy prices during the period 1980–2012. Then stability test, fitting effect test and Monte Carlo simulation method are applied to confirm the rationality of the prediction model. Further, the scenario analysis method is used to predict the energy-saving potentials in 2020 and 2025 under different scenarios. It is found that agricultural output and mechanical power have positive impacts on energy consumption, while agricultural industrial structure, fiscal expenditure and energy prices have negative influences. The results demonstrate that under BAU condition, the energy demand of China's agricultural sector will reach 128, 94 and 161,61million tons of standard coal by 2020 and 2025 respectively. Moreover, the energy savings potential will be 7, 967 million tons and 15,701 million tons under moderate and advanced scenarios by the year 2020, and 17, 225 million tons and 31,094 million tons by the year 2025. This study provides a reference for establishing energy saving policies for China's agricultural sector.