Information Technology And Quantitative Management

Published Date: 02 Nov 2017

Research on the contribution of structure adjustment on carbon dioxide emissions reduction based on LMDI method

Leya Wua, Weihua Zenga,*

aSchool of environment, Beijing Normal University, 100875, China

Abstract

With the big challenge from global climate change and energy crisis, and having observed the relationship between structure adjustment with the change of carbon dioxide emissions intensity, the author wants to ascertain the effect of industry and energy structure adjustment on the reduction of carbon dioxide emissions at Shijingshan district in Beijing, where the project of removing Shougang group and the "coal to gas" have been taken place at "11th five-year plan" period. Based on the use of the long-mean Divasia Index Decomposition method (LMDI), the carbon dioxide emissions intensity is decomposed into the contribution from four components: industry structure effect, industrial energy intensity effect, energy structure effect and emission coefficient effect. It is found that the contribution of industry and energy structure effect into the decrease of carbon dioxide emissions intensity is 53.98% and 26.84%, respectively. The result shows that the relocation of Shougang group and the "coal to gas" engineering have a great influence on reducing carbon dioxide emissions, the contribution of structure adjustment is significant. The structure adjustment is still the major contributor on carbon dioxide emissions reduction in the future.

© 2013 The Authors. Published by Elsevier B.V.

Selection and/or peer-review under responsibility of the organizers of the 2013 International Conference on Computational Science

Keywords: LMDI; structure adjustment; relocation of Shougang group; carbon dioxide emissions;

* Corresponding author. Tel.: 010-59893162; fax:010-59893162.

E-mail address: [email protected].

Introduction

Energy crisis and climate change have been to the big issues we human being have to face today, the international society has entered a carbon constrained world with the continuous efforts to strengthen the carbon emission reduction. Low carbon development has become an important way to promote sustainable society and harmonious economy environment. Since reform and opening-up, China has been enduring the huge resource degradation and serious environment problems by going the way of "high cost and high energy consumption" in the past 30 years. According to the statistics from IEA, in 2006, the unit consumption of energy about plain steel, cement and synthesis ammonia in china is more than the most develop country 50%, 60% and 33%, respectively [1]. In the background of global climate change, Chinese government promised to decrease the unit of GDP CO2 emissions (CO2 emission intensity) by 40%-45% in 2020 when compared with 2005 in Copenhagen climate conference. It will be a great challenge for China because it is located in the industrialization, urbanization and rapid development. So faced with the grim situation, energy conservation and emission reduction has become a national policy, which is penetrating into all kinds of economic activities.

The main methods of energy conservation and emission reduction include structure adjustment、technology improvement and effective management. Structure adjustment is a good way to energy conservation and emission reduction by the change of industry and energy structure. On one hand, for the reason that different industry has different unit consumption of energy, for example, in 2003, the first industrial energy intensity in China is 0.390 tce/10,000RMB, the second industrial energy intensity is 1.980 tce/10,000RMB, and the tertiary industrial energy intensity is 0.610 tce/10,000RMB [2]; so when the proportion of the second industrial decreased or the proportion of tertiary industrial increased, just like the civilization and service industry’s spring up, which is quite helpful for energy conservation and emission reduction. On the other hand, if we move forward with the transform our energy structure by exploiting and using the clean energy, it will be helpful for energy conservation and emission reduction too.

Under the background of holding 2008 Beijing Olympic Games, Chinese government approved to the relocation of Shougang group, and planned it to stop production at the end of 2010. This adjustment has a significant influence on the industry structure of Shijingshan district in Beijing, which will lead to the fast development of tertiary industry, including the cultural creativity and financial services. Meanwhile, in order to ensure good quality of the atmospheric environment during the Olympic Games, and to satisfy the request of low carbon city development, the government of Shijingshan district has been taking the energy structure adjustment, including the "coal to gas" engineering, which means to change some industrial boiler fuel from coal to natural gas. For ascertaining the effect of industry and energy structure adjustment on the reduction of carbon dioxide emissions at Shijingshan district, we use the long-mean Divasia Index Decomposition method (LMDI) to quantification the effect.

Index decomposition analysis (IDA), with a variety of different index methods, has become an important and meaningful tool in the fields of energy and environment assessment. Generally, IDA consists of two categories: the Laspeyres index and Divisia index method. With more practice and deep theoretical research, scholars have put forward many improved index methods, including the long-mean Divasia Index Decomposition method (LMDI), which is used in the study for national energy efficiency and environment problems. Ang [3] argued that LMDI is the most preferred method with the advantages of theoretical foundation, adaptability, consistency in aggregation and ease of use and interpretation. Greening et al. [4] use LMDI to analysis the carbon emission of the production department (1971-1991), transport of goods (1971-1993), residents of terminal services (1970-1993) and private transport (1970-1993) in 10 OECD countries (Denmark, Finland, France, Federal Germany, Italy, Japan, Norway, Sweden, the UK and the United States of America ), the result shows the decline of production sector energy intensity is the main reason for decreasing carbon intensity. Wang et al. [5] analyzed the changes of aggregated CO2 in China from1957 to 2000 based on the LMDI method. Wu et al. [6] used a "three level perfect decomposition" method to investigate the evolution of energy-related CO2 emissions in China from 1985 to 1999. Zhang et al. [7] presented a decomposition analysis of energy related CO2 emission in China for the period 1991–2006 and analyzed the nature of the four factors: CO2 intensity, energy intensity, structural changes, and economic activity. Ma and David [8] decomposed CO2 emission intensity in China from 1971-2003 through the method of LMDI, which shows the decline of proportion of biomass in the energy structure has a positive effect on the drop of CO2 emissions. Hu et al. [9] get the CO2 emissions in China from 1990-2005 based on the six sectors energy consumption data, then simple average factor decompose it with LMDI, it points out that the scale and energy intensity are two main factors, and different industry have more bigger different CO2 emissions, so the change of industrial structure has certain effect on the carbon emission reduction Song and Lu [10] make a decomposition on carbon emissions from energy consumption through the "two-step" LMDI based on the data from1990-2005, then make a decomposition again on the crucial factor to reduce carbon emissions, the result shows that the difference of economic growth mode is the important reason for the fluctuation of carbon emission, especially "high investment, high emissions, low efficiency" in the mode of economic growth since 2000 led to the significant increase in carbon emissions directly.

Methodology

CO2 emissions intensity is the CO2 emissions per unit of output in a country or a district, as a main low-carbon development mode indicator, it is often expressed by ton CO2/10.000yuan, which means if the carbon dioxide emissions caused by per 10,000yuan decrease with the economic growth at the same time, it’s to achieve a low carbon development mode. Now the carbon dioxide emission intensity can be decomposed into the effect of energy structure, energy intensity and CO2 emission coefficient with different kinds of energy as follows eq. (1).

(1)

Where G is the CO2 emission intensity, C is the CO2 total emissions, Y is the Gross Domestic Product (GDP), E is the total energy consumption, j is the type of energy use, Ej is the energy consumption of type j, I is the total energy intensity, kj is the carbon dioxide emission coefficient of one type of energy use, Sj is the share of one type of energy that accounts for the total energy consumption. Through LMDI as follows eq.（2）：

（2）

It means the change of CO2 emission intensity has been decomposed into the effect of energy intensity, emission coefficient and energy structure. Where represents the change of carbon dioxide emission intensity in one district from year 0 to t, is the energy intensity effect, is the emission coefficient effect, is the energy structure effect. They are computed by eq. (3):

（3）

Based on LMDI again to decompose the energy intensity:

（4）

Where i is the industrial subsector, Ii is the energy intensity in subsector i, Ri is the share of GDP that accounts for the total GDP.

From eq. (1-4) it can be seen that the change of the total energy intensity is mainly influenced by two factors: industry structure effect and industrial energy intensity effect.

(5)

Whereis the effect of industry energy intensity, is the effect of industry structure. They are computed by eq. (6):

（6)

Finally, we can get the contribution of structure adjustment on the reduction of carbon dioxide emission intensity, as the table 1 shows:

Table 1: the contribution of structure adjustment on carbon dioxide emissions’ reduction

Metric

Industrial structure

effect

Energy structure effect

Contribution of structure Adjustment

CO2 emission

intensity

Data source

This paper focus on the effectiveness of structure adjustment on carbon dioxide emissions reduction in Shijingshan district over the period 2005-2015, including the analysis of evaluation for "11th five year-plan" period and analysis of prediction for "12th five year-plan" period. In the year 2005-2009, we can get the GDP, total energy consumption and each type of energy use in industry from statistical yearbook in Shijingshan from 2005-2009 [11] , carbon dioxide emission and carbon dioxide emission coefficient in electricity subsector from environmental statistics data in Shijingshan [12] and the Jingneng thermal power plant respectively. On the basis of the data from 2005-2009, by using the methods of energy intensity and energy elasticity coefficient, taking the Environmental protection and ecological construction planning in Shijingshan [13] and The report of strategic EIA at Daxing district in Beijing[14] into account, we have a scientific prediction to sulfur emission intensity and energy structure in Shijingshan district at "12th five year-plan" period.

Case study of Shijingshan district, Beijing

Shijingshan district is located at north attitude 39°53′-39°59′ and east longitude 116°07′-116°14′, having the climate of sub-humid warm temperate zone. It covers an area of 84.38km2,with a population of 546,000. As the traditional heavy industrial area in Beijing, a lot of scale enterprises about metallurgy, electricity and machinery have reposed on Shijingshan district, including Shougang group, which produces at least half of the total GDP for this district all the way. Although Shougang group has made a great contribution to the development of Shijingshan district, there is no doubt that the most heavy industry has caused many environmental problems, which is affecting the local people’s normal life and the health of ecology. So facing this serious situation, the Beijing government makes a policy that is meaning the Shougang group’s move out from Shijingshan district in 2005, taking this opportunity to process industrial structural conversion. Meanwhile, the government of Shijingshan has processed energy structure conversion during "11th five year-plan" period, which mainly contains the project of "coal to gas", meaning the construction of 40 units "non-coal" areas.

Fig 1: the air pollution source at Shijingshan district

Because the second industry is the main energy consumption industry in Shi jingshan district during "11th five-year plan" period, so the industry energy consumption situations can well reflect the whole Shijingshan district "11th five-year plan " period of the structure of energy consumption, see the table 2. Then according to the CO2 coefficient of energy (table 3), we can get the result of CO2 emission and intensity as figure 3 shows.

Table 2：Industry energy consumption from 2005-2009（tce）

Type of energy consumption

2005

2006

2007

2008

2009

Raw coal

5720477

5519178

5544052

5061916

4792102

Washed coal

2213230

2111450

2045678

1974802

1923995

Other washed coal

23613

22954

20148

17934

21240

Coke

3787499

3270840

3353170

2198697

2013450

Coke oven gas

447118

431144

474633

462863

453246

Natural gas

0

56538

61844

63277

60339

Blast furnace gas

4196068

3728862

3619499

2217771

2204462

Gasoline

7045

6380

6050

5475

4430

Diesel oil

71517

63770

68943

60687

53971

Fuel oil

5576

5132

3783

2157

1317

Heating power

283903

261634

305126

224561

200171

Electric power

742112

752304

775349

636435

618813

Sum

17498158

16230185

16278276

12926574

12347535

Data come from statistical yearbook in Shi jingshan from 2005-2009.

Table 3：CO2 emission coefficient of main energy from 2005 to 2010

CO2 emission coefficient

2005

2006

2007

2008

2009

2010

Coal（t/tce）

2.74

2.74

2.74

2.74

2.74

2.74

Oil（t/tce）

2.14

2.14

2.14

2.14

2.14

2.14

Natural gas（t/tce）

1.63

1.63

1.63

1.63

1.63

1.63

Power（g/kwh）

913.81

899.92

909.83

883.92

866.64

840.00

Illustration: the CO2 emission coefficient of coal, oil and natural gas come from IPCC (2006), whose of power comes from the result of electric power industry's coal consumption and electricity generation of statistical data.

Figure 2：CO2 emission and intensity from 2005 to 2010 at Shi jingshan district

Because the industry is the main energy consumer, its CO2 emissions is far higher than that of the tertiary industry and the life of CO2 generated by the weight, so we take the industrial CO2 emissions as the region's CO2 emission. For example in 2006, industrial CO2 emissions are 48321915 tons, while the tertiary industry and life yield a total of 482543 tons of CO2, only accounts for 0.99% of total industrial emissions, which can be neglected.

By using the method of LMDI, we can get the result of decomposition (see table 4).

Table 4: the decomposition of carbon dioxide emission intensity’s change (ton/10,000yuan)

year

2005-2006

-2.53638

-1.75746

-0.05263

-0.72629

2006-2007

-2.29373

-0.15451

0.03818

-2.17759

2007-2008

-6.44311

-6.84686

-0.09249

0.49625

2008-2009

-0.19704

-0.13908

-0.05500

-0.00296

2009-2010

-2.99997

-1.46272

-0.06393

-1.47332

2005-2010

-14.47023

-10.36064

-0.22567

-3.88392

From the table 4, we can see the effect of CO2 emission coefficient is quite small on the CO2 emission intensity reduction, with only 1.56% emission reduction contribution ratio and 0.22567ton/10,000yuan decline. The main reason of this is that the energy saving technology of power industry have been more advanced, including variable frequency speed adjusting motor includes advanced technology, plasma ignition technology of micro oil ignition technology or low energy lighting technology, combustion of mixed coal combustion optimization technology and other advanced combustion technology. So the limited emission reduction potential makes it hard to have a high contribution rate. Then we calculate the contribution of structure adjustment on carbon dioxide emission intensity with the formulas from table 1 (see table 5).

Table 5：structure contribution rate at CO2 emission intensity reduction（100%）

year

2005-2006

-0.05938

0.28635

0.22697

2006-2007

-0.02963

0.94937

0.91974

2007-2008

0.16784

-0.07702

0.09082

2008-2009

27.09033

0.01504

27.10537

2009-2010

0.49853

0.49111

0.98964

2005-2010

0.53983

0.26841

0.80824

The effect of energy structure adjustment begins with the use of natural gas from 2006, which has a low CO2 emission coefficient and the proportion of that has increased from 0% to 0.35%. The emission reduction contribution rate of energy structure has reached the maximum value 94.93% in 2006-2007, the main reason is that other washing coal, coke and blast furnace gas with high CO2 emission factor of the varieties of energy consumption ratio are all decreased, while natural gas, electricity and heat and other clean energy consumption ratio are all improved, which makes the effect of energy structure adjustment on the CO2 emission reduction significant. In 2007-2008, the proportion of row coal and washed coal increase from 34.06%, 12.57% to 39.16% and 15.28% respectively, that’s why the energy structure adjustment has a negative effect on CO2 emission reduction in this period. At the beginning of "no coal area" engineering in 2008-2009, there is also a steady proportion of coal in the energy consumption, so the effect of that is less than before. Then the effect of energy structure adjustment on CO2 emission reduction increase with some "coal to gas" engineering in service, the contribution ratio has come to 49.11%.

When taking the industry structure adjustment into account, we can see the speed of industry structure adjustment is quite slow at the beginning of "11th five year-plan", that’s why the effect of industry structure adjustment on CO2 emission reduction is still negative from 2005 to 2007. But with the rapid development of the tertiary industry and the relocation of Shougang group, the effect of industry structure on CO2 emission reduction contribution rate increased from 2007. Especially in 2008-2009, under the circumstance of higher industry energy intensity, through the industrial structure adjustment, the proportion of the tertiary industry increased from 45% to 55%, the industry structure effect is obvious to cover negative effect brought from industrial energy intensity increasing, which makes CO2 emission intensity show a decline trend.

Conclusion

During "11th five year-plan" from 2005 to 2010, the effect of energy and industry structure adjustment on CO2 emission reduction is significant, the contribution ratio of energy and industry structure adjustment are 26.84% and 53.98%, respectively. It shows that the policy of the relocation of Shougang group and the "coal to gas" engineering have a great contribution on CO2 emission reduction at Shijingshan district in Beijing.

Although CO2 emission intensity has decreased significantly, there is also a certain distance with the target of constructing low "carbon city", it is obvious that the structure adjustment still has a great potential to CO2 emission reduction. In order to develop the effect of structure adjustment on CO2 emission reduction, we offer the following policy proposal.

â‘  By the policy advantage of constructing " national service industry comprehensive reform pilot area ", " national sustainable development experimentation area "and " Zhongguancun national innovation demonstration zone of area of characteristic ", taking the chance of moving Shougang group, Shijingshan government should focus on the development of digital entertainment, industrial design and other main cultural creative industries, business services, modern finance as the core of the productive service industry, electronic information, energy saving and environmental protection, new energy and other strategic emerging industries, show the more great contribution on CO2 emission reduction of industry structure adjustment through continuous upgrading of industrial cluster formation to be a high-end industrial intensive development pattern.

â‘¡ On the basis of taking the natural gas as the main energy through the "coal to gas" engineering, the government should continue to improve the energy structure adjustment, including the construction of renewable energy technology research and development center, the full development and utilization of solar, wind and biomass energy and other clean energy, which all can help give full play to the effect of energy structure adjustment on CO2 emission reduction.