areas. The positive correlation between building
energy service demand and the urban-rural
imbalance indicates that China’s building
energy demand may grow sharply.
Agricultural energy service demand will peak
early, but it only accounts for a very small proportion of total energy use. China is at the
income level where, in international experience,
meat consumption growth begins to slow down.
This, combined with the small share of global
energy that agriculture accounts for, makes this
sector a lower priority for policymakers.
However, as urbanisation increases and the
cold-storage supply chain it drives matures, meat
consumption in rural areas will increase and
counteractive policies will be needed. Cultural
attitudes towards different meats may also bring
unexpected changes to the energy system.
Demand for beef, which accounts for only 8% of
meat consumption in China, is currently being
met by imports rather than domestic supply.
Given China’s goal of reducing meat consumption and CO 2 and methane emissions from the
livestock industry, the supply and demand sides
of meat may need to be addressed in the future.
1.2 Energy Carriers
Energy carriers are fuels that can be converted to
provide a useful service, such as light or heat, or
drive a physical process like powering a car.
Common energy carriers are fossil fuels, electricity and biofuels such as wood. The quality of
an energy carrier can be defined along two
dimensions:
• cleanliness: the ability to provide energy
without producing local pollutants, measured
in particulate matter (PM10) emissions; and
• flexibility: the convenience and effectiveness
of using the energy (in joules) carried by an
energy carrier in a specific sector.
In international experience, as income
increases consumers demand not only more
energy but higher quality energy carriers. While
relative prices are undoubtedly important in
determining the carrier mix, even countries with
large endowments of cheap, low-quality fuels,
such as coal, tend to switch to higher-quality
carriers as they develop. This indicates that rising
incomes allow consumers to prioritise and pay
for quality characteristics such as cleanliness and
flexibility.
For some sectors, there is no single carrier that
offers improvements along both quality dimensions. This has limited their transition to new
carriers. In sectors where a single carrier offers
improvements in both cleanliness and flexibility,
such as electricity in the buildings sector, transitions occur quickly. In contrast, change is
insignificant in sectors, such as transport, where,
for all carriers, there are trade-offs between
cleanliness and flexibility. However, it should be
acknowledged that future technologies may
eliminate existing trade-offs and so trigger future
energy carrier transitions.
This section uses international experience to
illustrate how shifts to high-quality carriers have
occurred in different sectors and discusses
potential pathways that China could take. The
analysis shows that Chinese consumers are
approaching income levels where cleanliness and
flexibility are valued more than energy at the
lowest possible cost. Policymakers should
recognise these patterns of carrier demand. Many
fuels have expensive supply chains and countries
should avoid locking themselves into a dirty and
inflexible carrier mix if consumer demand is
about to shift to cleaner and more flexible fuels.
This study uses a consistent methodology to
analyse the development of international energy
carriers in four fields: buildings, power generation, transport, and iron and steel. The methodology comprises the following steps:
(1) collect global panel data (multidimensional
data on measurements over time) on energy
carriers in different sectors;
(2) for each sector, choose an appropriate definition of flexibility and identify fixed factors
for cleanliness and flexibility for each energy
carrier per joule of energy—as factors are
fixed, technology is assumed to remain
constant across time and countries;
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Y. Jianlong and M. Haigh
energy service demand and the urban-rural
imbalance indicates that China’s building
energy demand may grow sharply.
Agricultural energy service demand will peak
early, but it only accounts for a very small proportion of total energy use. China is at the
income level where, in international experience,
meat consumption growth begins to slow down.
This, combined with the small share of global
energy that agriculture accounts for, makes this
sector a lower priority for policymakers.
However, as urbanisation increases and the
cold-storage supply chain it drives matures, meat
consumption in rural areas will increase and
counteractive policies will be needed. Cultural
attitudes towards different meats may also bring
unexpected changes to the energy system.
Demand for beef, which accounts for only 8% of
meat consumption in China, is currently being
met by imports rather than domestic supply.
Given China’s goal of reducing meat consumption and CO 2 and methane emissions from the
livestock industry, the supply and demand sides
of meat may need to be addressed in the future.
1.2 Energy Carriers
Energy carriers are fuels that can be converted to
provide a useful service, such as light or heat, or
drive a physical process like powering a car.
Common energy carriers are fossil fuels, electricity and biofuels such as wood. The quality of
an energy carrier can be defined along two
dimensions:
• cleanliness: the ability to provide energy
without producing local pollutants, measured
in particulate matter (PM10) emissions; and
• flexibility: the convenience and effectiveness
of using the energy (in joules) carried by an
energy carrier in a specific sector.
In international experience, as income
increases consumers demand not only more
energy but higher quality energy carriers. While
relative prices are undoubtedly important in
determining the carrier mix, even countries with
large endowments of cheap, low-quality fuels,
such as coal, tend to switch to higher-quality
carriers as they develop. This indicates that rising
incomes allow consumers to prioritise and pay
for quality characteristics such as cleanliness and
flexibility.
For some sectors, there is no single carrier that
offers improvements along both quality dimensions. This has limited their transition to new
carriers. In sectors where a single carrier offers
improvements in both cleanliness and flexibility,
such as electricity in the buildings sector, transitions occur quickly. In contrast, change is
insignificant in sectors, such as transport, where,
for all carriers, there are trade-offs between
cleanliness and flexibility. However, it should be
acknowledged that future technologies may
eliminate existing trade-offs and so trigger future
energy carrier transitions.
This section uses international experience to
illustrate how shifts to high-quality carriers have
occurred in different sectors and discusses
potential pathways that China could take. The
analysis shows that Chinese consumers are
approaching income levels where cleanliness and
flexibility are valued more than energy at the
lowest possible cost. Policymakers should
recognise these patterns of carrier demand. Many
fuels have expensive supply chains and countries
should avoid locking themselves into a dirty and
inflexible carrier mix if consumer demand is
about to shift to cleaner and more flexible fuels.
This study uses a consistent methodology to
analyse the development of international energy
carriers in four fields: buildings, power generation, transport, and iron and steel. The methodology comprises the following steps:
(1) collect global panel data (multidimensional
data on measurements over time) on energy
carriers in different sectors;
(2) for each sector, choose an appropriate definition of flexibility and identify fixed factors
for cleanliness and flexibility for each energy
carrier per joule of energy—as factors are
fixed, technology is assumed to remain
constant across time and countries;
224
Y. Jianlong and M. Haigh