China's Energy Consumption in the New Normal

TLDR: In this article, structural decomposition analysis (SDA) and environmentally extended input output analysis (EEIOA) were used to decompose China's energy consumption changes during 2005-2012 into five factors: population, efficiency, production structure, consumption patterns, and consumption volume.

Abstract: Energy consumption is one of main reasons for global warming and highly correlated with economic development. As the largest energy consumer worldwide, China has entered a new economic development model – the "new normal". This study aims to explore the pattern shift in China's energy consumption growth in this new development phase. We use structural decomposition analysis (SDA) and environmentally extended input‐output analysis (EEIOA) to decompose China's energy consumption changes during 2005‐2012 into five factors: population, efficiency, production structure, consumption patterns, and consumption volume. During the period of the global financial crisis, the energy consumption generated by China's exports dropped, while the energy consumption generated by capital formation grew rapidly. Over three quarters of China's energy consumption growth was caused by capital formation during 2007‐2010. This growth is mainly because of China's economic stimulus measures in response to the global recession, with a focus on infrastructure construction. In the new normal, the strongest factors offsetting China's energy consumption have been shifting from efficiency gains to structural changes. Efficiency gains were the strongest factor offsetting China's energy consumption in traditional development model and offset 42% of energy consumption between 2005 and 2010 by keeping other driving forces constant. Since 2010, however, their effects offsetting energy have become weak. The production structure and consumption patterns both drove China's energy consumption growth in the traditional development model and drove energy consumption growth by 31% and 12% between 2005 and 2010, respectively. Since 2010, however, both factors have started to offset China's energy consumption.