Estimates of the Potential Indirect Damage to China by Restricting Energy Increase to Peak Carbon Emissions

Abstract

Balanced against this increase in energy demand are energy security and climate warming issues. Restricting the increase in energy demand for peaking carbon emissions will not only directly affect production in sectors but also cause a broader indirect economic impact through intricate industrial linkages. Under the two requirements of adapting to warming and peaking carbon emissions before 2030, we accordingly constructed developmental and restrictive scenarios of China and improved the adaptive Input–Output model from the demand side to evaluate the indirect economic impact. The main findings were as follows: (a) the increase in end‐use demand for conventional energy in 2030 will be 24.43% of energy consumption in 2017 (TEC2017) under the restrictive scenario, and the reduction of this increase will be about 42.98% of TEC2017 in comparison with the developmental scenario. (b) Due to this reduction, the possible indirect damage in 2030 will be 14.96% of the GDP in 2017, and the clean energy level in 2030 will be 20 times the hydropower generation in 2017, which can offset this damage. (c) The industrial sector with high output and high energy will suffer the most indirect damage. The quantitative results demonstrate the great challenges that China will face in clean energy transition.