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Inter-fuel Substitution in the Chinese Iron and Steel Sector

Author

Listed:
  • Russell Smyth
  • Paresh Kumar Narayan
  • Hongliang Shi

Abstract

China’s iron and steel sector is the largest in the world and has been the backbone of Chinese heavy industry. This sector is also a major consumer of energy and, in particular, coal. As a result, the iron and steel sector in China is a major contributor to greenhouse gas emissions and other pollutants. In this paper we examine the potential for inter-fuel substitution between coal, electricity, natural gas and oil in the Chinese iron and steel sector and find that these energy inputs are substitutes. The finding that these alternative energy sources are substitutes for coal suggests that China has the potential to switch from coal to cleaner energy sources; hence, retaining the ability to fuel its iron and steel sector, while reducing the adverse environmental implications.

Suggested Citation

  • Russell Smyth & Paresh Kumar Narayan & Hongliang Shi, 2010. "Inter-fuel Substitution in the Chinese Iron and Steel Sector," Monash Economics Working Papers 22-10, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2010-22
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2010/2210interfuelsmythnarayanshi.pdf
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    References listed on IDEAS

    as
    1. Jefferson, Gary H., 1990. "China's iron and steel industry : Sources of enterprise efficiency and the impact of reform," Journal of Development Economics, Elsevier, vol. 33(2), pages 329-355, October.
    2. Wei, Yi-Ming & Liao, Hua & Fan, Ying, 2007. "An empirical analysis of energy efficiency in China's iron and steel sector," Energy, Elsevier, vol. 32(12), pages 2262-2270.
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    Cited by:

    1. Lin, Boqiang & Wesseh, Presley K., 2013. "Estimates of inter-fuel substitution possibilities in Chinese chemical industry," Energy Economics, Elsevier, vol. 40(C), pages 560-568.
    2. Zachlod-Jelec, Magdalena & Boratynski, Jakub, 2016. "How large and uncertain are costs of 2030 GHG emissions reduction target for the European countries? Sensitivity analysis in a global CGE model," MF Working Papers 26, Ministry of Finance in Poland.
    3. Höök, Mikael & Fantazzini, Dean & Angelantoni, André & Snowden, Simon, 2013. "Hydrocarbon liquefaction: viability as a peak oil mitigation strategy," MPRA Paper 46957, University Library of Munich, Germany.

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    More about this item

    Keywords

    China; inter-fuel substitution; iron and steel;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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