The impacts of China’s household consumption expenditure patterns on energy demand and carbon emissions towards 2050

• Published in: Energy policy 2012-11, Vol.50, p.736-750
• Main Authors: Dai, Hancheng, Masui, Toshihiko, Matsuoka, Yuzuru, Fujimori, Shinichiro
• Format: Article
• Language: English
• Subjects: Air pollution caused by fuel industries; Applied general equilibrium models; Applied sciences; Appropriations and expenditures; Carbon; Carbon emissions; China; China (People's Republic); Computable general equilibrium model; Economic data; Economics; Energy; Energy consumption; Energy demand and CO2 emissions; Energy economics; Energy industry; Energy policy; Energy. Thermal use of fuels; Exact sciences and technology; General aspects; General, economic and professional studies; General. Regulations. Norms. Economy; Household consumption; Household consumption expenditure pattern; Household expenditure; Households; Methodology. Modelling; Power demand; Smart grid technology; Studies; Technological change; Technology
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2012.08.023

This paper explores how China’s household consumption patterns over the period 2005–2050 influence the total energy demand and carbon dioxide (CO2) emissions in two baseline scenarios, and how it influences carbon prices as well as the economic cost in the corresponding carbon mitigation scenarios. To this end we first put forward two possible household consumption expenditure patterns up to 2050 using the Working–Leser model, taking into account total expenditure increase and urbanization. For comparison, both expenditure patterns are then incorporated in a hybrid recursive dynamic computable general equilibrium model. The results reveal that as income level increases in the coming decades, the direct and indirect household energy requirements and CO2 emissions would rise drastically. When household expenditure shifts from material products and transport to service-oriented goods, around 21,000 mtce11Mtce: million ton coal equivalent, equal to 29.31 giga-joules. of primary energy and 45 billion tons of CO2 emissions would be saved over the 45-year period from 2005 to 2050. Moreover, carbon prices in the dematerialized mitigation scenario would fall by 13% in 2050, thus reducing the economic cost. ► Propose two household expenditure patterns considering income rise and urbanization. ► Much energy and CO2 emissions would be saved in low-carbon consumption scenario. ► Carbon prices would reduce a lot in low-carbon consumption scenario.