Economic Analysis of CO2 Emission Trends in China

Climate change is one of hot spots all around the world. China, the second biggest CO2 emitter, is facing increasingly severe pressure to reduce CO2 emission. The article first describes Kaya Identity and its policy implications. Second, it uses the modified Kaya Identity and makes decomposition without residues on CO2 emission during the period 1971–2005. Taking into account the changes of macroeconomic background, it conducts a detailed analysis in terms of CO2 emission trend from 4th Five Year Plan through 10th Five Year Plan. The decomposition results indicate that economic development and increase in population are major driving forces, and that improvement in energy efficiency contributes to the reduction of CO2 emission, and that decarbonization in primary energy structure is also an important strategic choice. Finally, the article stresses that in CO2 order to realize the binding target of 20% reduction in GDP energy intensity during the 11th Five Year Plan, China should speed up the readjustment of the industrial structure and energetically develop the energy-efficient technologies and clean fuel technology, which will effectively promote the country to reduce CO2 emission and contribute to the mitigation of climate change.