Exploring CO2 mitigation pathway of local industries using a regional-based system dynamics model

https://doi.org/10.1016/j.ijinfomgt.2020.102079Get rights and content

Abstract

Low-carbon development based on low energy consumption, low pollution and low emissions has become an important strategic choice for worldwide governments to achieve sustainable development. In order to support smart government in decision making, information systems have been developed to monitor and predict CO2 emissions. Most of the existing studies investigate CO2 emission amounts, identify influencing factors of CO2 emission and discuss potential suggestions to mitigate CO2 emission for different industries. They often focus on CO2 emission research of industries in a region or country, while the integration of carbon flow in the neighboring regions is not well studied. Therefore, this paper proposes a system dynamics model to explore an optimal carbon emission reduction path of a regional industry by integrating regional differences, i.e., industrial comparative advantages, technology advantages and the inter-regional context between the neighboring regions. In the case study, we use a key industry in a typical industrial region of Western China, the cement industry in Chongqing, as a scenario to simulate the CO2 emission, possible energy demand and cement production of the cement industry in this region for recent years. Simulation results show that by leveraging the regional differences, especially the collaboration of the industrial chain and production capacity among regions, the cement industry in Chongqing can achieve the low-carbon target. In addition, through the analysis and discussions about the features of our model and Chongqing’s cement industry, it reflects that our model using regional differences is applicable to industries with a common demand market at the regional level such as energy, chemical and steel industries.

Introduction

An increasing number of governments in the world are aware of the importance and urgency to address resource shortages and climate changes for sustainable development. With the development of information and IoT (Internet of things) technologies, different information systems are studied to help the emission analysis and prediction in government’s policy-making (Ismagilova, Hughes, Yogesh, Dwivedi, & Raman, 2019). However, various countries and regions have their own challenging problems and difficulties. Different from developed countries, which are in the era of the knowledge economy and post-industrialization, most of the developing countries are still in the period of industrialization. In order to expand industries and upgrade the industrial structure, they require more energy consumption and construction investment, which are most likely to aggravate air pollution. They are facing more pressure and challenging issues than developed countries in the reduction of CO2 emissions while maintaining the development of society and economics.

China is a developing country, which is on the road to industrialization and urbanization. Since the economic reforms from the 1980s, China’s average annual growth rate of GDP reached 9.81 %, which is far above the world’s average level of 2.87 % (Guo, Qu, Wu, & Wang, 2018). However, rapid development has also caused serious depletion of natural resources and environmental pollution. For example, the total energy production in China expanded by 4.7 times from 6.28 billion tons of standard coal equivalent (SCE) in 1987 to 35.9 billion tons of SCE in 2017 (China’s National Bureau of Statistics, 2018). The total energy consumption reached 44.9 billion tons of SCE in 2017, which is about 7.8 times of that in 1987. Although the industrial sector contributes about 40 % to China’s GDP, it leads to about 67.9 % and 84.2 % of the energy consumption and CO2 emission respectively across the country (Yao, Guo, Shao, & Jiang, 2016). The industrial waste gas boosted to 66.9 trillion cubic meters, which is about 6.6 times of that in 1998. The industrial solid waste generation also rose to 3.31 million tons in 2013, which is about 3.1 times of that in 1997 (China’s National Bureau of Statistics, 2014b). In 2015, China set a commitment to lower the carbon intensity of GDP by 60–65 % on the 2005 level by 2030. To meet this target, it is aware that the most significant task is to change the economic structure, especially in control of the fast expansion of energy-intensive industries (Luukkanen, Panula-Ontto, & Vehmas, 2015).

Recently, many studies focused on CO2 emission analysis of various industries, e.g., cement industry (Ansari et al., 2013), primary aluminum industry (Hao, Geng, & Hang, 2016), and iron and steel (Xu, 2016). Important factors including the economy, population, resources, environment, and policy are often studies and discussed towards CO2 emission mitigation of a regional industry (Guo et al., 2018). Some studies emphasized that the improvement of energy efficiency has a positive impact on reducing greenhouse gas emissions (Hao et al., 2016; Lin & Tan, 2017). Product prices in different regions and policy support, e.g., energy subsidy, and export/import tariffs, also have some effects on the production demand, which would most likely link to CO2 emission from the production processes within a region (Ansari et al., 2013; Liu, Bangs, & Müller, 2011). In addition, regional differences in CO2 emissions and their reduction potentials and performance are investigated. In China, Central China has transportation advantages, abundant labor, natural resources and current market advantages, because of the geographical advantage (Xu & Lin, 2016). Western China is rich in natural resources, while it has the lowest level of industrial technology than other regions (Cheng, Li, Liu, & Zhang, 2018). In Eastern China, the energy-intensive industries often have an advanced technical level, and have relatively high CO2 emission efficiency (Lin & Tan, 2017). It is important to leverage the regional differences in formulating appropriate CO2 mitigation policies (Xu, 2016). However, few of the previous studies consider the carbon flow between regions. How to integrate the inter-regional advantages, such as regional different and comparative advantages of the industry development, to explore the CO2 emission solution is insufficiently discovered and analyzed.

Due to the regional heterogeneity, CO2 emission from various industries across different regions of China is a complex issue. Analyzing the CO2 emission flow with various factors and dynamic issues is one of the biggest challenges in studying strategies for CO2 emission reduction. The system dynamics (SD) model can stimulate the interaction and causal relations among various driving factors and formulate different policy scenarios by setting different variables and their interactions to analyze the results (Liu & Ma et al., 2015; Yuan, Ji, & Chen, 2008). It also has been applied to investigate energy consumption and CO2 emission of different industries (Anand, Vrat, & Dahiya, 2006; Guo et al., 2018; Li et al., 2012; Li, Zhang, Li, & He, 2017; Liu, Ma, Tian, Jia, & Li, 2015). To further study the CO2 emission reduction of regional industry, our study focuses on exploring the potential from inter-regional perspectives by integrating regional advantages in resources, energy supply, comparative advantages of the industry development, etc. into the system dynamics modeling. To demonstrate the usefulness of our approach, the cement industry of Chongqing, one of the high-energy-consuming industries in a typical industrial base in Chain, is taken as the subject of the case study. We attempt to explore the CO2 mitigation pathway for this industry using our SD model.

The rest of this study is organized as follows. Section 2 presents the relevant studies on CO2 emission analysis and system dynamics models. Section 3 describes our methodology of regional CO2 emission analysis based on system dynamics. In Section 4, using the cement industry in Chongqing as a case study, several scenarios and simulation results are presented. In Section 5, some policy implications for CO2 emission reduction at the regional level are discussed. Section 6 concludes this study.

Section snippets

Related works

To analyze industrial CO2 emission within a region is a complex and dynamic issue, which includes various factors like resources, environment economy and etc. System dynamics (SD) is an effective simulation tool that facilitates the identification of driving factors, the integration of individual subsystems and their interactions and the forecasting of the evolving trend of the target system (Yuan et al., 2008). It can establish causal relations among major factors and their feedbacks in a

The framework of system dynamic model from a regional perspective

Nowadays, economic and trade connections and development between regions become even closer. The product demands, energy resources from both local region and external region always affect the industrial production from the local regions as well as the CO2 emissions. The development of a regional industry is not an isolated problem, but a complex situation and should be viewed with a multi-dimension approach. Leveraging the regional differences and advantages from various domains, e.g., resource

Case studies

In this paper, a case study using the cement industry of Chongqing in China is conducted. Chongqing is the only municipality in Southwest China and located in the center of the Three Gorges reservoir area, where the ecology is relatively fragile and sensitive. Chongqing is one of the six old traditional Chinese industrial bases. It is also one of the typical representative municipalities across the country especially dominated by heavy industries and faced with challenges in accelerating its

Discussions and implications

In exploring potential CO2 emission mitigation approaches for the regional industry, we introduce leveraging regional differences in terms of industrial comparative advantages, technology advantages and the inter-regional context in SD modeling. This is different from most of the existing SD studies for CO2 emission simulation which often attempt to identify the driving factors from a local region perspective. By widening the scope, not limited to a single region, it is able to integrate

Conclusions

To explore the CO2 mitigation pathway for the regional industry, a SD model using regional differences is proposed. The regional differences include industrial comparative advantages, technology advantages and the inter-regional context between the neighboring regions. When applying our SD model for regional industry, elements about regional differences are considered in system structure analysis to identify factors and causal relations from both local and inter-regional perspectives. In

Acknowledgements

Funding: National Fey R&D Program on Intergovernmental Science and Technology Innovation Cooperation Research Project, China “EIR Program – New Urban Energy Interconnect System Research and Its Pilot Application (No. 2018YFE96500)” and the Green&low-carbon Team of Research Center for Economy of Upper Reaches of the Yangtze River in Chongqing Technology and Business University (No. CJSYTD702).

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