Abstract
China has the largest textile industry with the complete industrial chain and also the largest textile exporter in the world. The study analyses the energy substitution effect of technological progress of China's textile industry using a macroeconomics approach. In order to predict future energy saving potential, we examine the relationship between energy intensity and its five main factors (technological progress, enterprise scale, labor productivity, dependence on foreign trade and industrial electricity price) by co-integration technique. Empirical results indict that electricity shows alternative features to other energy sources in the context of technological progress in China's textile industry. Besides, there exists a long-run equilibrium among energy intensity and the five main factors. Monte Carlo method was applied for risk analysis to ensure the reliability of forecast. Further, future energy saving potential and CO2 emission reduction of China's textile industry was predicted using scenario analysis. The result shows that energy conservation potential of China's textile industry is 16.16–27.53 million tons of standard coal equivalent in 2025. Additionally, it was revealed that the CO2 emission reduction caused by the energy conservation will be 32.63–55.60 million tons in 2025. Finally, future policy priorities for energy conservation of Chinese textile industry are suggested.
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