Factors Driving China’s Carbon Emissions after the COVID-19 Outbreak

The outbreak of the coronavirus disease 2019 (COVID-19) may exert profound impacts on China’s carbon emissions via structural changes. Due to a lack of data, previous studies have focused on quantifying the changes in carbon emissions but have failed to identify structural changes in the determinants of carbon emissions. Here, we use China’s latest input–output table and apply structural decomposition analyses to understand the dynamic changes in the determinants of carbon emissions from 2012 to 2020, specifically the impact of COVID-19 on carbon emissions. We find that final demand per capita contributed to emissions growth at a slower pace, but production structure drove a greater carbon emissions increase than before the pandemic. Export-led emissions growth rebounded, and investment-led emissions were more concentrated in the construction sector. The carbon intensity of several heavy industries increased, e.g., the nonmetallic products sector, the metal products sector, and the petroleum, coking, and nuclear fuel sector. In addition, lower production efficiency and increased reliance on carbon-intensive inputs indicated a deterioration in production structure. For policy implications, efforts should be undertaken to increase investment in low-carbon industries and increase the proportion of consumption in GDP to shift investment-led growth to consumption-led growth for an inclusive and green recovery from the pandemic.


Uncertainty analysis
As stated in the context, we discussed uncertainties cause by limitation in data and the SDA method.Here, we conduct several analyses to quantify the uncertainty, especially the uncertainty cause by the SDA method.First, regarding the uncertainty cause by sectoral aggregation, we further aggregate the 20 sectors in the context into seven sectors, including the agriculture, mining, industry, energy, construction, transport and services sectors.The result shows that the changes in driving factors of carbon emissions happened after the COVID-19 in consistence with the changes indicated in the context (Fig S1).Secondly, we use the average value of the 5! = 120 equivalent decomposition forms in the context, and here for uncertainty analysis, we calculate all values of the 120 forms to show the disparities.The contribution of the five factors for the emissions growth in 2017-2018 and 2018-2020 is showed, by setting 2017 and 2018 as the benchmark year in the two periods.The results confirm the robustness of the changes in each driving factor as in the context (Fig S2).

Slowdown of China's carbon emissions increases
The growth rate of China's carbon emissions did not follow a constant trend (Fig. S5A).Overall, the path of the increase can be divided into four phases during this period.Before the global financial crisis, China's carbon emissions experienced a high-speed rise because of growing economic development and carbon-intensive exports.The average increase rate of productionbased carbon emissions was 17.8% annually from 2002 to 2007.This made China the largest carbon emitter in the world in 2006 35-37 .The shock of the global financial crisis in 2008 greatly reduced global demand and slowed the increase in carbon emissions in China (3.4%).Entering the postcrisis era, the Chinese government released a series of stimulus packages to boost a robust economic recovery.A four trillion-yuan stimulus plan targeting some carbon-intensive sectors, including infrastructure and construction, was announced to bolster economic expansion.The economic stimulus strategy not only helped the country escape the quagmire of the economic crisis but also led to an intense rebound of carbon emissions growth.From 2008 to 2011, the average growth rate of China's carbon emissions was 9.7% annually.A tipping point of economic development appeared after a rapid recovery from the financial crisis as China entered the "new normal" in 2012-2013, which meant lower economic growth rate but higher quality.With a retarded GDP growth rate, production-based carbon emissions peaked in 2013 at 9.8 Gt and then continued to decline in 2014 and 2015.Carbon emissions were reduced by 3% in this period.The reduction in carbon emissions in this period attracted much attention from academia as it confirmed the feasibility of achieving a low-carbon transition while S3 maintaining relatively high GDP growth in China.However, the carbon peak in 2013 was a temporary accomplishment, and carbon emissions rebounded after 2017.
Overall, the rapid growth of carbon emissions has ended since the beginning of the new normal.
Before 2012, carbon emissions increased by 17% per year, while after 2012, the annual increase rate was drastically reduced to 1.5%.The stabilized carbon emissions were attributed to the decoupling of economic development from carbon-intensive production more than to slowed GDP growth and therefore reflected the characteristics of the new normal phase, with lower speed but higher quality of economic growth and strong policies on carbon reduction.Changes in carbon intensity, which is carbon emissions per unit of GDP, indicate that the carbon reduction from 2013 to 2016 was mainly due to the dramatic decline in carbon intensity.In terms of the sources of carbon emissions, curtailed coal usage was the effective pathway for decarbonization in this period (Fig. S5B).Consequently, the carbon intensity was substantially reduced by 21% during 2013-2016.In contrast, carbon intensity remained nearly constant in the post-financial-crisis era.From 2008 to 2011, carbon intensity was curtailed by only 3%.
The difficulty in decarbonization in this period was because of the urgency of achieving economic recovery and extensive investment in energy-intensive sectors.In recent years, China has encountered a bottleneck period in carbon abatement as marginal abatement increases.
From 2017, when carbon emissions started to rebound, the carbon intensity was reduced by 8%, which was much slower than the earlier stage of the new normal phase.
Direct carbon emissions from household energy consumption have also plateaued in recent years.Household carbon emissions increased from 192 Mt to 448 Mt from 2002 to 2017 because of the increasing energy demand (Fig. S5C).The rising energy consumption of urban households was the main reason for increased carbon emissions.The purchasing power and carbon-intensive lifestyle of urban households as well as rapid urbanization resulted in the contribution of urban households to direct carbon emissions.A clear transition of the energy mix is revealed, and carbon emissions induced by the coal consumption of both urban and rural households have been critically reduced.Urban households have successfully switched from coal usage to gas for their essential life demands.In 2002, carbon emissions from urban coal and gas usage were 51 Mt and 10 Mt, respectively.The roles of coal and gas have been reversed since 2010, and carbon emissions from urban coal and gas usage were 12 Mt and 120 Mt in 2020, respectively.Access to gas in rural areas in China has been a problem that obscures rural energy transitions because of rural households' scattered inhabitation and distance from the gas grid.However, rural coal-induced carbon emissions peaked in 2015 at 122 Mt and continued to decrease to 85 Mt in 2020.The reduction in coal usage was mainly due to the electrification of rural household energy consumption.From 2002 to 2020, rural electricity consumption increased from 67 billion kWh to 524 billion kWh.Nonetheless, coal usage is still the main resource for rural carbon emissions, and therefore, the accessibility of clean and high-quality energy is still a challenge in rural China.Oil-induced carbon emissions have been increasing in both urban and rural areas, which is mainly attributed to gasoline and liquefied petroleum gas S4 (LPG) usage.Urban and rural residents use LPG for cooking when natural gas is difficult to access.The increase in LPG usage has been stabilized because of progress in gas pipeline construction.Gasoline continued to increase drastically with the rapid expansion of private car ownership.Reducing the carbon emissions induced by household oil consumption requires policies that target the transition of oil fuel vehicles towards new energy vehicles as well as encouraging more responsible consumption behaviours with regard to low-carbon transport.

Determinants of the carbon emissions change before COVID-19
Apart from the three stages in the main context, we further divide the ten years from 2002 to 2012 into two earlier stages by a five-year window.The first stage is the rapid increase stage after accession to the WTO (2002WTO ( -2007) ) and the second stage is the post-financial-crisis era, when carbon emissions rebounded (2007)(2008)(2009)(2010)(2011)(2012).
In the long run, the improvement of energy efficiency has been the sole factor that drives the decarbonization of China's economy (Fig. S6).From 2002 to 2020, the contribution of energy efficiency to emission reduction was 188%, which means that carbon emissions per unit of total output have been significantly decreased.The continuously declining carbon intensity is mainly achieved by progress in low-carbon technology energy and the elimination of backward production capacity.From 2002 to 2012, efficiency gains in the manufacturing sector and some light industries, including equipment production sectors, food, textiles, and paper, contributed to 99% of the carbon reduction in China (Fig. S7A-D).After the financial crisis, the advantage of energy efficiency was slightly weakened.One of the main reasons was the deterioration in carbon reduction of the energy sector, including electricity, gas and water production and supply.From 2007 to 2012, the carbon intensity of the energy sector rose by 3%.Due to the supply-side adjustment and the elimination of backward production capacity, energy efficiency has been enhanced in the new normal (from 33% during 2007-2012 to 49% during 2012-2017).
In this period, the carbon intensity of most sectors decreased immensely.For instance, the carbon intensity of the "Petroleum, Coking, Nuclear Fuel" sector declined by 49% in the new Per capita consumption volume, production structure, and population have driven the growth of carbon emissions in the whole period under consideration.Consumption volume, indicating the changes in GDP growth, is the predominant factor that accounts for the rise in carbon emissions.With the entrance of the new normal, the pursuit of lower speed but higher-quality economic development also slowed emission expansion.The production structure contributed to the increase in China's carbon emissions, but the contribution was constricted in the new normal.From 2002 to 2007, the production structure explained a 78% increase in carbon emissions, and the contribution of the production structure to carbon emissions was condensed to 29% during 2007-2012.The increase in carbon emissions of the construction sector by capital formation was the main cause of the increase in China's carbon emissions (Fig. S8).Being policy-sensitive and capital-driven, the expansion of the construction sector before 2012 was mainly due to the rapid development of the real estate market as well as the economic stimulus package targeting high-speed rail network and infrastructure construction after the financial crisis.This also led to the expansion of related sectors, for example, the transport equipment sector that produces high-speed trains.The accession to the WTO boosted the manufacturing sectors in China because of the large demand for exports.Consequently, carbon emissions S6 induced by exports of ordinary and special equipment, transport equipment and chemicals increased considerably in this period.The extensive carbon emissions of the construction sector and several manufacturing sectors, driven by capital formation and exports, explained most of the total increase in this period.In the new normal phase, the contribution of the production structure to the carbon emission increase was less and therefore was offset by rapid energy efficiency improvement.The growing trend of the population is rather stable and contributes to a growth rate of emissions of 1.2% annually.-2007, 2007-2012, 2012-2017, 2017-2018, and 2018-2020, respectively.
normal, while this figure was only 17% in 2007-2012, indicating that the energy efficiency improvement almost tripled.In 2017-2018, energy efficiency improvements accelerated, with efficiency gains in some sectors, including the construction sector, transport sector, chemical sector, and energy sector.Although it has been the major driving force of decarbonization in China for decades, the potential for energy efficiency improvements has been constricted with the transformation of the energy mix and technology updates.The annual contribution of efficiency gains to carbon reduction was as high as 13.2% in 2002-2007 but drastically declined to 3.5% in the following stage from 2007 to 2012.The loss of efficiency advantage gradually recovered in the new normal phase to an annual contribution rate of 3.7% due to the decisive supply-side reform.S5 After driving up the increase in carbon emissions for ten years from 2002-2012, consumption patterns started to become a decarbonization force during 2012-2017 and then recently reversed again.The contribution of consumption patterns is in accordance with the consumption structure caused by different final users, namely, rural and urban households, government, capital and inventory, and exports.In general, a clear shift of the driving forces of carbon emissions from capital formation to household consumption is revealed (Fig. S5D).Before the new normal, the accelerated economic growth as well as the tremendous investment for the recovery from the financial crisis drove the growth of capital formation and induced carbon emission increases.From 2002 to 2012, carbon emissions caused by the final demand of capital and inventory changes increased by 4358 Mt, accounting for 77% of the total carbon increase.The reliance on international trade and expanded export demand, especially before the financial crisis, led to an increase of 1075 Mt carbon emissions from 2002 to 2007.With the search for an inclusive and sustainable industry structure, China strengthened its efforts to prevent the disorderly expansion of capital and promoted supply-side transformation to optimize the industry structure in the new normal.Consequently, carbon emissions induced by capital formation largely declined.Carbon emissions induced by exports also decreased in the new normal stage because of rising labour costs and restricted sustainability requirements.The contribution of private and government consumption has been enhanced since then.However, the decarbonization effect by consumption patterns was reversed again since 2017 with the consumption caused by the rebounded contribution of capital formation.The incremental carbon emissions induced by capital and changes in inventory increased from 42% in 2012-2017 to 59% in 2017-2018.This trend continued in 2020 as consumer confidence had not completely recovered.

Fig. S1 .
Fig. S1.Absolute contributions of different factors to changes in Chinese CO 2 emissions for 2017-2018 and 2018-2020.The 20 sectors are further aggregated into seven sectors.