The relationship between consumption and production system and its implications for sustainable development of China

Rapidly developing economy in China makes great improvement in human life quality. At the mean while, it brings great pressures on environment which has drawn broadly attentions all over the world. The 'problems of consumption' comes both from consumers and producers. Hybrid life cycle analysis method and structural decomposition analysis model were used in this paper to explore the interaction of consumption and production and how technology development and household consumption contributed to CO2 emissions in the period of 1992-2002. The achievements of technology development in the last two decades reduced the emission intensity and technical coefficients which lowered the CO2 emissions. But the household consumption has offset this technological contribution and resulted in the growth of CO2 emission. Interaction analysis results showed that consumer's demand for energy-intensive product was an important driving force of pollution production. Household consumption in China contributed a lot to the expansion of manufacturing activities in the last two decades. We concluded that sustainable development could not be achieved if policy makers continuously emphasize the control of polluting industries. The government should simultaneously emphasize technological development and consumer policies to curb these emissions and induce more environmental conscious production and consumption patterns.