Economic Scale Effect Research Articles

Has foreign direct investment increased air pollution in China? A hierarchical linear model approach

Focusing on the mechanism of foreign direct investment on environment, we attempt to build a series of hierarchical linear models to explore the impact of foreign direct investment on China’s sulfur dioxide (SO2) emissions by using the panel data of industrial sector in Chinese provinces from 2002 to 2013. The findings show that: Firstly, the industrial SO2 emission shows a slow downward trend. Secondly, 27.96% of the variations of SO2 emission intensity come from the differences between the provinces. Thirdly, foreign direct investment can explain 50.50% of the different changes in provincial SO2 emission intensity due to economic scale effect, structural effect, technological effect, and environmental regulation effect. Among them, the scale effect and technical effect are negatively correlated with SO2 emissions intensity, while structural and environmental regulation effects positively. Moreover, foreign direct investment can significantly inhibit the positive correlation of structural effect and weaken the negative correlation of technology effect on SO2 emission intensity, but do not have a significant impact on SO2 emission intensity by economic scale effect and environmental regulation effect.

The double-edged sword of decentralized energy autonomy

Whilst there are clear advantages to decentralized energy systems, one main disadvantage is their lack of economic scale effects. The development of decentralized energy systems goes hand in hand with a trend towards community energy. Many of these communities claim energy autonomy as their main motivation for investing in local renewable energies. They define energy autonomy as generation exceeding demand on an annual basis and are therefore less autonomous than without these technologies. Communities that strive for this ideal utilize the electricity network infrastructure more than traditional end of the pipe consumers. At the same time, they make a much lower contribution to the costs of this infrastructure, currently charged per unit of energy used, and often benefit from subsidized renewable energy technologies. Hence this motivation is at best questionable and at worst misplaced. A continuation of the recent rapid reductions in battery prices expected by many experts, however, could make the economic case for truly energy-autonomous municipalities. This clearly raises important questions for researchers and policymakers alike. For example, in which sorts of municipalities could such solutions make sense and what are the consequences for the overarching, mainly centralized energy system?

Identifying the driving forces of national and regional CO2 emissions in China: Based on temporal and spatial decomposition analysis models

This study explores the driving forces of the changes of national and regional CO2 emissions using temporal decomposition analysis model, and investigates the driving forces of the differences of CO2 emissions between China's 30 regions and the national average using spatial decomposition analysis model. The changes or the differences in national and regional CO2 emissions during 2000–2014 are decomposed into nine underlying determinants. Temporal decomposition results show that economic scale effect is the dominant driving force leading to the increases in both national and regional CO2 emissions, while energy intensity effect is the main contributor to the reduction of CO2 emissions. Contribution of various variables to CO2 emissions between eastern region and central region are roughly same. Spatial decomposition results demonstrate that the differences of CO2 emissions among China's 30 regions are expanding increasingly. Economic scale effect is main driving force responsible for the difference in CO2 emissions among regions, and energy intensity effect, energy structure effect and industrial structure effect are also important factors which result in the increasing differences in regional CO2 emissions. In addition, resource-based and less developed regions have greater potential in the reduction of CO2 emissions. Understanding CO2 emissions and the driving forces of various regions is critical for developing regional mitigation strategies in China.

China’s coal consumption declining—Impermanent or permanent?

Coal dominates China’s energy consumption, and academic published papers especially before 2010 usually undervalued China’s coal consumption significantly. However, China’s coal consumption has declined continuously in 2014 and 2015. This seems to indicate that China may have finally reached the peak of its coal consumption in 2013. There is minimal quantitative research on the analysis of this phenomenon. The logarithmic mean Divisia index (LMDI) method is used in this study to analyze the key factors that drive China’s direct coal consumption variation. Approaching the issue from the perspective of indirect coal consumption, an Input-Output model is established to discuss China’s embodied coal exports in this study, aiming to trace the ultimate demand for coal to understand why consumption might have peaked. The research results suggest that changes of industrial structure started to reduce China’s coal consumption significantly since 2012, and the effects of energy intensity and energy mix have continued to play important roles in coal consumption reduction since 2007, especially the energy mix effect since 2012. On the other side of the equation, although the economic scale effect – the only factor apparently driving increases in China’s coal consumption – is still large, the increasing trend has reversed, and its impact has stabilised. China’s embodied coal exports, both absolute volume and the proportion of coal consumption, are falling even though the trade surplus has still been increasing in recent years, which is completely different with the trend before 2011. China’s continuous efforts on export restructuring – shifting from labour & energy-intensive to capital & technology-intensive – will reduce embodied coal exports and coal consumption in the future.

An input–output structural decomposition analysis of changes in sectoral water footprint in China

Policy evolution in China has made great achievements in economic development, while its impact on water has also been significant. This study provides detailed insight into how diverse policy evolution affected the water footprint (WF) in China from 1997 to 2007 through input–output analysis and structural decomposition analysis. Input–output analysis was used to measure China's WF. The results indicate that the total WF in China decreased from 495.5 billion m3 in 1997 to 447.6 billion m3 in 2007. Structural decomposition analysis was applied to quantify the determinants of the changes in WF. The driving factors of the WF changes were decomposed into technology, sectoral connection, economic structure, gross economic scale and population. The results show that the sector with the most space to save water changed from agriculture to tertiary industry during the periods under study. Technology and economic structure effects always offset the WF increase, whereas gross economic scale effect always hindered water conservation. In 2002–2005, the sectoral connection effect abruptly changed from negative to positive, with the proportion of the total contribution rising to 60%. This phenomenon can be linked to market expansion, which led to a decrease in water utilization when China joined the WTO in 2001. To promote water conservation in China, macro-control policies should be formulated in coordination with self-readjustment policies.

Techno-economic performance and spatial footprint of infrastructure configurations for large scale CO2 capture in industrial zones: A case study for the Rotterdam Botlek area (part A)

This study developed a method to assess the techno-economic performance and spatial footprint of CO2 capture infrastructure configurations in industrial zones. The method has been successfully applied to a cluster of sixteen industrial plants in the Dutch industrial Botlek area (7.1MtCO2/y) for 2020–2030. The configurations differ inter alia regarding capture technology (post-, pre-, oxyfuel combustion) and location of capture components (centralized vs. plant site). Results indicate that oxyfuel combustion with centralized oxygen production and decentralized CO2 compression is the most cost effective and realistic configuration when applying CO2 capture to all industrial plants (61€/tCO2; 5.8MtCO2/y avoided), mainly due to relatively low energy costs compared to post- and pre-combustion. However, oxyfuel combustion at plant level is economically preferable when capturing CO2 from only the three largest industrial plants. For post-combustion, a separated absorber-stripper configuration (73€/tCO2; 7.1MtCO2/y avoided) is preferable from a cost perspective, due to economic scale effects of capture equipment. The optimal pre-combustion configuration shows a slightly less favorable performance (81€/tCO2; 4.4MtCO2/y avoided). Whereas many industrial plants have insufficient space available for capture equipment, centralized/hybrid configurations show no insurmountable space issues. The deployment of the most favorable configurations is addressed in Part B.

Interstate Analysis of the Decomposition of Total Factor Productivity Growth in the Organized Manufacturing Industries in India:A Stochastic Frontier Approach

According to the conventional 'Solow' residual approach or index number approach, the concept of technological progress and total factor productivity growth (TFPG) are used synonymously and TFPG is shown by solely shifting the production possibility frontier. But recent development of TFP estimation acknowledges that along with technological progress, changes in technical efficiency, economic scale effect and changes in allocative efficiency also contribute to productivity growth. The study applies a stochastic frontier production approach to decompose the sources of TFPG of the total organized manufacturing industries in fifteen major industrialized states in India as well as in all-India into four afore-mentioned components during the period from 1981-1982 to 2010-2011, during the entire period, during the pre-reform period (1981-1982 to 1990-1991) and post-reform period (1991-1992 to 2010- 2011), and also during two different decades of the post-reform period, i.e., 1991-1992 to 2000-2001 and 2001-2002 to 2010-2011. According to the estimated results, technological progress (TP) is the main contributor to the TFPG of the organized manufacturing from 1981-1982 to 2010-2011. But the TFPG declined during the post-reform period which is accounted for by the decline in TP.

Driving effect analysis of energy-consumption carbon emissions in the Yangtze River Delta region

We calculate the carbon emissions related to energy consumption, from 1995 to 2010, in the Yangtze River Delta. To that end, we set up an incremental factor decomposition model of carbon emissions that makes use of the logarithmic Divisia decomposition index method. The model was adopted to analyze the driving effect of economic scale, population size, energy intensity, and energy structure on carbon emissions in the Yangtze River Delta region between 1995 and 2010. Our empirical results demonstrate that the economic scale effect, whose contribution ratio reached 144.19% during the study period, was a significant factor in explaining the increases in carbon emissions in the region. The effects of energy intensity, population size, and energy structure were −60.97%, 19.25%, and −2.47%, respectively. The results show that economic scale has the largest driving effect on incremental increases in carbon emissions; population size plays a negligible role in carbon emissions; and energy intensity is an important carbon-emission constraint factor. No apparent energy structure restrains carbon emissions. We then make some suggestions with respect to carbon emission reductions and economic scale, population size, energy intensity, and energy structure in the Yangtze River Delta.

Where is the future for a growing metropolis in North China under water resource constraints?

Rapid progress of economic development and urbanisation has created a water demand crisis in the Beijing–Tianjin metropolis in North China. This study evaluates the metropolis’s carrying capacity under water resource constraints by examining the discrepancies between the actual water requirements, water usage and the locally available water resources; the water footprint (WF) approach is used to assess associated changes in these variables. A structural decomposition analysis is applied to decompose the driving factors of the increasing water requirements in the Beijing–Tianjin metropolis. The results indicate that the increasing actual water requirements are far greater than the increase in the locally available water resources and water usage, especially in Beijing. The discrepancy between the actual water requirements, locally available water resources and water usage sharply increased from 2002 to 2007, which introduced a serious water crisis and more significant constraints on the water resources. The carrying capacity was based on freshwater transfer, groundwater extraction and VW trade. Four separate factors are considered to contribute to the effects of actual water requirement changes from 2002 to 2007: technological improvements, economic system efficiency, scale effect and consumption structure changes. Significant water saving efforts via technological improvement have been made in the Beijing–Tianjin metropolis in the past. However, these improvements could not cover the increasing actual water requirements driven by economic and population growth. To address the two challenges (i.e. regional development and the water shortage) and to enhance the carrying capacity in terms of sustainability in the future, the Beijing–Tianjin metropolis should adopt a more active role in controlling the growth of population and increasing the WF. Although increased water resources and interregional virtual water trades with other regions have greatly contributed to alleviating the water crisis in recent years in the Beijing–Tianjin metropolis, the water saving potential may be realised through the readjustment of industrial structure, consumption structure, urban spatial structure and economic instruments in the future.

Preliminary Results of a Techno-Economic Assessment of CO2 Capture-network Configurations in the Industry

This paper evaluated the techno economic performance of several CO2 capture-network configurations for a cluster of sixteen industrial plants in the Netherlands using bottom up analysis. Preliminary findings indicate that centralizing capture equipment instead of capture equipment at plant sites shows lower average CO2 avoidance costs for both post-combustion (central: 70; decentral: 86) and oxyfuel combustion (central: 63; decentral: 80) technology, because of economic scale effects, use of large-scale CHP plants and revenues from electricity sale to the grid. Centralizing capture equipment is particularly interesting for small point sources, since these plants benefit most from economies of scale.

화단형 침투시설의 단위설계침투량 산정 및 효과분석

본 연구에서는 우수 유출량을 일정수준 이하로 제어할 수 있는 화단형 침투시설을 개발하여 이의 적정 설계침투량을 산정하고 적용효과를 분석하였다. 침투시설의 설계침투량을 산정하고 성능을 분석하는 것은 지구단위계획과 같은 공간계획에 구체적으로 빗물침투시설을 계획할 경우에 적용 후 효과를 예측하는데 있어 반드시 검토되어야 할 사항이다. 이에 본 연구에서는 한국건설기술연구원 실험동 옆 주차장을 대상으로 본 시설의 단위설계침투량에 변화를 주어 물수지 분석 프로그램을 이용, 유출량 감소효과를 분석하였다. 침투시설의 설계침투량을 <TEX>$0.1{\sim}3m^3/m^2.day$</TEX>로 각각 변화를 주어 유출율 변화를 분석한 결과, <TEX>$1.0m^3/m^2.day$</TEX>에서 유출량 80%를 침투시키는 것으로 분석되었으며, 이때의 단위설계침투량이 0.0416(<TEX>$m^3/m^2.hr$</TEX>)이었다. 또한 개발한 시스템을 현장침투실험한 결과, 단위설계침투량이 약 <TEX>$0.045m^3/m^2.hr$</TEX>으로 나타났다. 이 값은 시뮬레이션한 단위설계침투량과 유사한 것으로 분석되었다. 본 연구결과를 토대로 경제적인 규모와 환경적 효과를 최대한 고려한 침투량 산정이 가능하였으며, 또한 도시에서의 녹색인프라로서 빗물침투시설을 공간계획에 적용할 때 고려할 수 있는 근거를 마련했다는 데 의의를 갖는다. This study developed a flowerbed type infiltration system that could control the amount of runoff discharge under a certain level estimated its proper design infiltration rate, and analyzed the effects of its implementation. Analyzing the performance of infiltration system is the one of the essential processes that should be under review to predict its effects after implementation when a rainwater infiltration system is included in a district-based plan. To estimate the unit design infiltration rate of this system, the runoff decrease effect was analyzed by varying the unit infiltration rate of the system applied to the parking lot adjacent to the Korea Institute of Construction Technology laboratory building by using a water balance analysis program. After varying the unit design infiltration to <TEX>$0.1{\sim}3m^3/m^2.day$</TEX> to analyze the variation in the rate of runoff, 80% of the runoff was infiltrated at <TEX>$1.0m^3/m^2.day$</TEX>, and the unit infiltration design rate at the time was 0.0416(m3/m2.hr). It was also found that the unit design infiltration rate obtained from a field infiltration test of the developed system was about <TEX>$0.045m^3/hr$</TEX>. Based on this study, it was possible that infiltration rate is estimated to consider the economic scale and environmental effect. It is significant to apply the spatial plan of rainwater infiltration system as green infrastructure.

Effects of CO&lt;SUB&gt;2&lt;/SUB&gt; Emissions Trading on Steel Scrap Recycling: A Simulation Analysis Using a Computable General Equilibrium Model

This study aims to examine whether the absolute amount of steel scrap used in Japan increases under an emissions trading scheme using an economic simulation model known as the computable general equilibrium model.This study’s computable general equilibrium model is a single-country, multi-sector model. An important feature of our model is that the iron and steel manufacturing sector is disaggregated in detail. The disaggregation is based on differences in production methods and types of steel products.In our simulation, although demand for electric arc furnace steel products in Japan increases in response to the implementation of emissions trading because of their low carbon intensity, the absolute amount of steel scrap used decreases. This is because the price substitution effect between electric arc furnace steel products and blast furnace–basic oxygen furnace steel products is dominated by the economic scale effect stemming from the negative economic impacts of emissions trading.

Explaining Differences in Milk Quota Values: The Role of Economic Efficiency

This article explores the relationship between milk quota values and economic efficiency in order to analyze government interventions in quota allocations among producers. For this purpose, we estimate quota values using a panel of Spanish dairy farms. Quota values are then decomposed into economic efficiency, price, and scale effects in order to assess the relative influence of these factors. We find that efficiency is important in explaining quota values but is uncorrelated with observable farm characteristics. This casts doubts on the government's ability to allocate quotas to efficient farms.