An evaluation of technical progress and energy rebound effects in China's iron & steel industry

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

External organisations

  • China University of Mining and Technology

Abstract

As a pillar industry in China, the iron & steel sector have under through rapid growth and technical progress for decades. However, energy polices aiming at energy savings may not be as good as expected due to the existence of rebound effects. The motivation of the paper is to analysis the nexus between technical progress and energy rebound effects. Based on a three-input trans-log cost function model, we first estimate the share equation and the corresponding price elasticity for each input factor. Then, the rebound effect in China's iron & steel industry over 1985–2015 is evaluated through decomposing the energy prices. Empirical results show that: (1) The price elasticities of input factors are negative; (2) Energy/capital and energy/labor show substitute relationships; (3) The average energy rebound effect in the ISI is as high as 73.88%; (4) The energy rebound effect shows a downward trend before the 11th Five-year period and then an upward trend after that. Therefore, policies proposals of lowering the rebound effect should be placed not only on technical progress, but also on energy price reform by reducing energy subsidies and thus accelerating energy price marketization, so as to promote energy substitution, reduce energy rebound effect and produce further economic and environmental benefits.

Details

Original languageEnglish
Pages (from-to)259-265
Number of pages7
JournalEnergy Policy
Volume123
Early online date8 Sep 2018
Publication statusPublished - 1 Dec 2018

Keywords

  • Technical progress, Price elasticity, Energy rebound effect, China's iron & steel industry