• Proxy indicator: Road passenger and freight
make up 77% of transport energy demand
(22% of total energy demand).
Industry: 35% of global final energy demand
—excluding chemical feedstock.
• Proxy indicator: Iron and steel production
accounts for 28% of industrial energy demand
(10% of total energy demand).
Buildings: 34% of global final energy demand
—excluding chemical feedstock.
• Proxy indicator: Lighting emissions are an
effective instrument for measuring building
energy services.
Agriculture: 3% of global final energy
demand—excluding chemical feedstock.
• Proxy indicator: Beef, pork and poultry
account for 60% of agricultural energy
demand (2% of total energy demand).
1.1.1 Transport
China needs policies that guide transport service
demand. Overall, China’s transport service
demand is very close to the average seen in
international experience. Given this, and the fact
that transport service demand, according to
international experience, does not plateau until
very high income levels are reached, it is likely
that the expected 2030 demand level will not
occur without guiding policies, as shown in
Fig. 5.
Population density is a key factor in travel
mileage, so urban planning could be a means to
limit transport service demand, without constraining people’s choices. In international
experience, more densely populated countries
have lower levels of road travel than scarcely
populated countries at the same level of income.
As Fig. 6 shows, transport service demand in
South Korea and Finland differ greatly, despite
their similar income levels. Should China wish to
limit the growth of transport service demand, it
could do so by increasing population density and
urbanisation. Given current urbanisation patterns
in Shanghai and Beijing, for example, this should
be possible.
1.1.2 Industry
China’s demand for energy services in industry is
higher than international levels, but there is
uncertainty as to whether this trend will continue.
China’s current steel demand is double that of the
high path level of international experience. Given
this fact, China needs to make great changes to
get to the low path level. Even if no change is
made, China’s steel demand will remain at the
high end of international experience in 2030.
However, steel demand in some provinces
(Shanghai, for example) has peaked and started
to decline. If such a trend is replicated in other
provinces, China’s future steel demand may
stabilise early and converge with international
experience by 2030.
Gross capital formation can explain the difference between the high and low paths in
international experience at the GDP per capital
level of $30,000. This shows that China’s steel
demand and related energy consumption may
decrease with slowing investment in fixed assets
—a process that may occur naturally as capital
stock reaches saturation. Much of China’s
infrastructure has already been constructed, so
the need for more investment may decline in the
coming years, as shown in Fig. 7.
Another important factor is whether China’s
goal is to maintain its leadership in exporting
heavy industry products or transition to a
service-oriented economy. Just like China, South
Korea’s economy is dominated by heavy manufacturing. South Korea has the world’s highest
steel consumption per capita, as shown in Fig. 8.
However, if China decides to build a
service-oriented economy, as the UK did in the
1990s, demand for industrial services will
decrease sharply. Such a shift in China’s industrial structure may impact future industrial
energy demand. Some provinces in China may
retain their export-oriented heavy industry, while
others may switch to a service-oriented economy.
How to balance these development options and
how close each province is to its peak capital
218
Y. Jianlong and M. Haigh
make up 77% of transport energy demand
(22% of total energy demand).
Industry: 35% of global final energy demand
—excluding chemical feedstock.
• Proxy indicator: Iron and steel production
accounts for 28% of industrial energy demand
(10% of total energy demand).
Buildings: 34% of global final energy demand
—excluding chemical feedstock.
• Proxy indicator: Lighting emissions are an
effective instrument for measuring building
energy services.
Agriculture: 3% of global final energy
demand—excluding chemical feedstock.
• Proxy indicator: Beef, pork and poultry
account for 60% of agricultural energy
demand (2% of total energy demand).
1.1.1 Transport
China needs policies that guide transport service
demand. Overall, China’s transport service
demand is very close to the average seen in
international experience. Given this, and the fact
that transport service demand, according to
international experience, does not plateau until
very high income levels are reached, it is likely
that the expected 2030 demand level will not
occur without guiding policies, as shown in
Fig. 5.
Population density is a key factor in travel
mileage, so urban planning could be a means to
limit transport service demand, without constraining people’s choices. In international
experience, more densely populated countries
have lower levels of road travel than scarcely
populated countries at the same level of income.
As Fig. 6 shows, transport service demand in
South Korea and Finland differ greatly, despite
their similar income levels. Should China wish to
limit the growth of transport service demand, it
could do so by increasing population density and
urbanisation. Given current urbanisation patterns
in Shanghai and Beijing, for example, this should
be possible.
1.1.2 Industry
China’s demand for energy services in industry is
higher than international levels, but there is
uncertainty as to whether this trend will continue.
China’s current steel demand is double that of the
high path level of international experience. Given
this fact, China needs to make great changes to
get to the low path level. Even if no change is
made, China’s steel demand will remain at the
high end of international experience in 2030.
However, steel demand in some provinces
(Shanghai, for example) has peaked and started
to decline. If such a trend is replicated in other
provinces, China’s future steel demand may
stabilise early and converge with international
experience by 2030.
Gross capital formation can explain the difference between the high and low paths in
international experience at the GDP per capital
level of $30,000. This shows that China’s steel
demand and related energy consumption may
decrease with slowing investment in fixed assets
—a process that may occur naturally as capital
stock reaches saturation. Much of China’s
infrastructure has already been constructed, so
the need for more investment may decline in the
coming years, as shown in Fig. 7.
Another important factor is whether China’s
goal is to maintain its leadership in exporting
heavy industry products or transition to a
service-oriented economy. Just like China, South
Korea’s economy is dominated by heavy manufacturing. South Korea has the world’s highest
steel consumption per capita, as shown in Fig. 8.
However, if China decides to build a
service-oriented economy, as the UK did in the
1990s, demand for industrial services will
decrease sharply. Such a shift in China’s industrial structure may impact future industrial
energy demand. Some provinces in China may
retain their export-oriented heavy industry, while
others may switch to a service-oriented economy.
How to balance these development options and
how close each province is to its peak capital
218
Y. Jianlong and M. Haigh