Estimating economic impacts from future energy demand changes due to climate change and economic development in China

Abstract

The energy demand is significantly affected by climate change and economic factors, and the distribution of the demand among different regions in China is unequal because of the large regional differences in climate and economic development. Moreover, demand changes will directly affect the energy sector as the supply side amplifies the economic impact through the industrial linkages among regions and sectors. Therefore, we developed an integrated assessment model combining an energy demand-driven model (EDD) and adaptive multiregional input-output model (AMRIO). The assumptions were used in the model based on China's future climate, economy and energy development. In addition, we evaluated the century-scale energy demand change and its possible economic impact in 5 future scenarios (SSPx-y of CMIP6). The results show that the following: (i) The energy demand in China will continue to increase by approximately 1.89–1.94 times by 2100, resulting in a negative economic impact on GDP ranging from 8.19% to 12.05%. (ii) The energy sector will cumulatively benefit by 26% because of the increase in demand; however, other sectors will suffer negative economic ripple impacts due to the imbalance of supply and demand, especially manufacturing (719%) and agriculture (577%). The results provide quantitative information for policymakers to fully consider the positive and negative impacts of future energy change when making climate mitigation strategies.