How the manufacturing economy impacts China's energy-related GHG emissions: Insights from structural path analysis

As "the world's factory", China's energy consumption and GHG emissions can be largely attributed to its manufacturing economy. This paper aims to examine energy-related methane (CH₄) and carbon dioxide (CO₂) emissions by Chinese economy from a consumption-based perspective, and to explore the energy-climate-manufacturing nexus relationship in its supply chains. Nearly three-quarters of China's energy-related GHG emissions in 2012 were associated with the manufacturing industry directly or indirectly. Among which, over two-fifths of the national CH₄ and CO₂ emissions were embodied in the final demand of manufacturing products, mainly driven by the exports and capital formation. Meanwhile, manufacturing sectors served as important intemediate transmission nodes of embodied emissions for other industries such as construction and services. More than 80% and 40% of the embodied emissions in the sectors of construction and services were related to the intermediate uses of manufacturing products, respectively. Critical supply chain paths for linking embodied GHG emissions with manufacturing sectors were extracted through the structural path analysis technique. The top 30 common paths were responsible for about one fifth of the total CH₄ and CO₂ emissions. Three main transmission nodes of embodied energy-related GHG emission flows were identified. While approximately half of the energy-related CH₄ emissions occurred at the fourth or higher production layers, the CO₂ emissions were distributed evenly across the production layers. Mitigating energy-related GHG emissions associated with manufacturing economy by adjusting critical industrial sectors and final demands provides new insights for understanding the transitions of China's manufacturing industries to a low-carbon economy.