The impact of economic transition on energy intensity and carbon emission: from economic freedom and economic structure perspectives

M.Phil.Climate change is among the most concerned issues in the 21st century. The Paris Agreement explicitly declared the goal of restraining global temperature increase within 2-degree Celsius. Meanwhile, the world has seen rapid changes in economic freedom in the past decades. Market liberalisation and globalisation took place as the former communist bloc abandoned their model of central-planning. Degree of economic freedom increased and economic structure was changed. Statistics show that economic transition can alter energy and carbon intensities, but a quantitative analysis of their correlations is lacked. It did not receive much consideration in the literature of carbon emission projection as well which could hamper climate change mitigation. This study aims to clarify the correlations between economic freedom and energy intensity. Whether such a correlation exist and how it works are examined, to see how economic transition and globalisation could affect climate change mitigation by altering CO2 emission from economic activities. There are two research objectives: to understand whether economic transition has contributed to energy conservation and CO2 mitigation globally and, if so, to what extent; and to examine how much difference an economic structural change can exert on energy consumption and CO2 emission.A worldwide dataset of national statistics from the World Bank and two economic freedom indexes are utilised to examine the correlations between two economic aspects, energy consumption and CO2 emission from the macro level. Upon confirming the correlations, a scenario-based study is conducted on the change in energy consumption and CO2 emission when the economic structure, defined by the production and private consumption structures, changes with reference to the history of developed economies. China, as the largest CO2 emitter and leading developing country, is used as the case study. Statistically significant correlations between different aspects of economic freedom, economic sectors and energy intensities are confirmed. Direct correlations between the economic parameters and carbon intensity is, however, not observed. Greater economic freedom on the development of the service sector and investment are linked to a lower energy intensity; whereas better governance and protection to property rights are attributed to a higher energy intensity. The growth of the service sector, private consumption and export are attributed to a reduction in total energy intensity. Such a change could facilitate the reduction in energy consumption and CO2 emission. The result shows that a rapid economic structural change, particularly deindustrialisation, can effectively reduce CO2 emission, and is required for China to achieve her Paris pledges besides reducing energy intensity and promoting energy mix to reduce carbon intensity. The development of the tertiary sector is highly recommended and, from the historical events of the developed economies, further liberalisation of the economy would be an effective solution.氣候變化乃21世紀之重要議題。巴黎會議訂明全球增溫不高於2 度的目標。同時，過去數十年，世界經濟出現重大變化。 蘇聯解體後，共產陣營放棄計劃經濟邁向自由化及全球化，今經濟自由度提升、產業結構轉型。數據顯示這會影響能源消耗及碳排放;但學術界未有詳細的量仕研究，相關因素在碳排放預算方面亦未受關注。本研究旨在釐清經濟自由度與能源強度之關像是否及如何成立，了解經濟轉型對碳排放的影響。研究探討經濟轉型是否對節能減排有影響及其影響程度、以及經濟結構轉型對此的影響。本研究利用世界銀行及經濟自由度報告數據分析經濟自由及結構與能源消耗及碳排放的關條;然後利用情境模擬，以發達國家為藍本探討結構轉型一包括生產及消費一對能源消耗及碳排放的影響，並以中國此世界最大碳排放國及主要發展中國家為案例。結果顯示經濟自由及結構與能源消耗有明顯關像，但與碳排放無直接關係。第三產業發展及投資的自由度愈高，能源強度愈低;良好管治及產權保護則傾向與高能源強度有關。發展第三產業、減少依賴工業能減低能源強度，能源消耗及碳排放。除技術提升及能源結構轉變外，亦須經濟轉型配合，特別是去工業忙及發展第三產業。根據發達國家經驗，經濟自由化對此會有幫助。Kwok, Tin Fai.Thesis M.Phil. Chinese University of Hong Kong 2018.Includes bibliographical references (leaves 142-156).Abstracts also in Chinese.Title from PDF title page (viewed on …)