An input-output structural decomposition analysis of changes in China's renewable energy consumption

Governments actively encourage renewable energy use to deal with climate change and achieve carbon emission reduction targets. It is crucial to find out the driving factors that affect the utilization of renewable energy. Therefore, based on China's 2010-2016 input-output table, this paper uses the input-output model and structural decomposition analysis (SDA) to analyze the driving factors of renewable energy changes in the production end, household end, and the aggregate economy. The results show that the changes in the consumption structure (F) is the most crucial factor for renewable energy use, followed by technology progress (T) and final demand per capita (V). Sector SEHW (supply of electric power, heat power, and water) and MCRP (manufacture of coke and refined petroleum products) are the two vital sectors to achieve China's energy transition of the production level. However, as for households, the proportion of renewable energy has been declining. Hence, the government should promote renewable energy use and achieve the green transition in production and household levels.

Automated summary

This paper uses China's input-output table and structural decomposition analysis to identify the main driving factors affecting renewable energy utilization, including changes in consumption structure, technological progress, and per capita final demand. The supply of electric power, heat power, and water, as well as the manufacture of coke and refined petroleum products, are identified as the crucial sectors for achieving energy transition at the production level. However, the proportion of renewable energy has been declining at the household level, indicating the need for government intervention to promote green transitions.