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Factors influencing energy intensity in four Chinese industries

Factors influencing energy intensity in four Chinese industries

By Karen Fisher-Wanden and Yong Hu, Pennsylvania State University

Presented by Yong Hu

 Wednesday, September 26, 2012, 12.30-2 pm

Venue: MC6-100


In this paper, we investigate what explains China’s decline in energy intensity in four industries—Pulp and Paper; Cement; Iron and Steel; and Aluminum. Many previous studies have identified technological change within an industry to be important. However, few have examined how industry-specific policies and market factors affect individual industries.   In this paper, we employ unique firm-level data from China’s most energy-intensive large- and medium-size industrial enterprises in each of these four industries over a six-year period from 1999 to 2004, to empirically examine how China’s energy-saving programs, liberalization of domestic markets, openness to the world economy, and other policies, have contributed to the decline in energy intensity in these industries. Our results suggest that rising energy costs are a significant contributor to the decline in energy intensity in all four industries. China’s industrial policy—“grasping the large, letting go off the small”—also contributes to reductions in energy intensity in these four industries. However, trade openness and R&D expenditures lead to improvements in energy efficiency in only two of these industries. Finally, we find that changes in energy intensity vary among firms with different ownership types and regional locations

Bio, Yong Hu:

Yong Hu is a graduate student at the Pennsylvania State University. His research interests include technological change in developing countries, development economics, and international trade. Yong was born in Zhejiang, China. He has a B.A. in computer science from Zhejiang University of Technology, China, a M.S. in geometry from Nankai University, China, and a M.A. in Applied Mathematics from Penn State.  Yong will be graduating with a Ph.D. in Agricultural, Environmental, and Regional economics from the Pennsylvania State University in the Summer of 2012.

For further information on the presentation, contact Jon Strand at:, 202-458-5122

The Joint Bank-Fund Brown-Bag Research Seminars on Environment and Energy is a joint initiative between the Development Research Group, Environment and Energy Team (DECEE), World Bank, and the Fiscal Affairs Department, IMF. Organizers of the series are Jon Strand (DECEE), and Ruud de Mooij and Ian Parry (FAD/IMF). The seminars are held at lunch time, normally once every two weeks, alternately in the Bank and Fund. Aims of the seminars are to raise attention to, and interest in, environment, energy and natural resources issues in both institutions; to promote the interaction between the two institutions in these fields; and to improve the institutions' common work on policy.



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