Factors influencing CO_2 emissions in China's power industry: Co-integration analysis

摘要

More than 40% of China's total CO_2 emissions originate from the power industry. The realization of energy saving and emission reduction within China's power industry is therefore crucial in order to achieve CO_2 emissions reduction in this country. This paper applies the autoregressive-distributed lag (ARDL) co-integration model to study the major factors which have influenced CO_2 emissions within China's power industry from 1980 to 2010. Results have shown that CO_2 emissions from China's power industry have been increasing rapidly. From 1980 to 2010, the average annual growth rate was 8.5%, and the average growth rate since 2002 has amounted to 10.5%. Secondly, the equipment utilization hour (as an indicator of the power demand) has the greatest influence on CO_2 emissions within China's power industry. In addition, the impact of the industrial added value of the power sector on CO_2 emissions is also positive from a short-term perspective. Thirdly, the Granger causality results imply that one of the important motivators behind China's technological progress, within the power industry, originates from the pressures created by a desire for CO_2 emissions reduction. Finally, this paper provides policy recommendations for energy saving and emission reduction for China's power industry.