Evolving household consumption-driven industrial energy consumption under urbanization: A dynamic input-output analysis

Abstract

Household consumption as one of the final demands is indirectly stimulating industrial production and industrial energy consumption (IEC). How household consumption drives IEC and how will household consumption-driven IEC evolve in the future especially under accelerating urbanization remains to be explored in depth. In this study, through identifying changes in the quantity and structure of household consumption in the input-output (I–O) framework, we examine the indirect IEC driven by urban and rural household consumption in China’s 8 groups of industries (27 sectors) in 2005, 2010, 2015 and 2017. Then integrating energy balance, material balance and value balance within the socioeconomic activities, we develop a dynamic simulation model to forecast household consumption-driven IEC from 2018 to 2030. It is found that total urban consumption-driven IEC increased substantially during 2005–2017 (599.8–1028.2 Mtce), also with an increasing proportion in total household consumption-driven IEC (74.5%–80.4%). Along with increasing residential disposal income, urban consumption-driven IEC is estimated to double in 2030. Heavy industry (Manufacture of Chemicals, Smelting and Pressing of Metals are prominent) maintains the leading contributor, followed by Services industry (Transport, Storage and Post is prominent). The gap between urban and rural consumption-driven IEC will continue widening accompanying urbanization. This study links urbanization with IEC via household consumption and introduces I–O simulation modeling into the prediction of consumption-based IEC. The findings of this study can provide insights into sounder management of IEC that combines household and industrial development in the context of urbanization.