What Goes Up: Recent Trends in China’s Energy Consumption

Since 1996, China's energy output has dropped by 17%, while primary energy use has fallen by 4%, driven almost entirely by shrinking output from coal mines and declining direct use. Since China is the world's second-largest emitter of greenhouse gases, it is important to understand the sources of this apparent transformation, and whether it portends a permanent change in patterns of energy use. This remarkable reversal of the long-term expansion of energy use has occurred even as the economy has continued to grow, albeit more slowly than in the early 1990s. Generation of electric power has risen, implying a steep fall in end uses, particularly in industry. Available information points to a variety of forces contributing to this phenomenon, including rapid improvements in coal quality, structural changes in industry, shutdowns of factories in both the state-owned and non-state segments of the economy, improvements in end-use efficiency, and greater use of gas and electricity in households. A combination of slowing economic growth, industrial restructuring, broader economic system reforms, and environmental and energy-efficiency policies has apparently led to at least a temporary decline in, and perhaps a long-term reduction in the growth of energy use, and therefore greenhouse gas emissions.