Executive Summary ............................................................................................................ 8
1. Introduction ..................................................................................................................... 9
　1.1 Overview ................................................................................................................... 9
　1.2 Urbanization and Energy Implications ................................................................... 10
　　1.2.1 Urbanization Process and Population Changes................................................ 11
　　1.2.2 Urbanization and Residential Energy Implications ......................................... 13
　　1.2.3 Fuel Transition and Carbon Implications ........................................................ 16
　　1.2.4 Rising Energy Intensity of Residential Floor Space ........................................ 18
　1.3 Post-2001 Industrialization ..................................................................................... 20
　　1.3.1 Industrial Energy Use Trends .......................................................................... 22
　　1.3.2 Industrial Energy and Economic Intensity Trends........................................... 24
2. Defining a High-Efficiency, Low Consumption Scenario: China Lightens Up (CLU) 27
　2.1 Urbanization ............................................................................................................ 28
　2.2 Building Floor Space .............................................................................................. 29
　2.3 Trade ....................................................................................................................... 30
　2.4 Efficiency Improvements ........................................................................................ 31
3. Industrial Sub-sector Analysis ...................................................................................... 31
　3.1 Cement .................................................................................................................... 31
　　3.1.1 International Standing ...................................................................................... 31
　　3.1.2 Technology Trends .......................................................................................... 32
　　3.1.3 Energy Intensity and Fuel Mix ........................................................................ 33
　　3.1.4 Drivers.............................................................................................................. 34
　　3.1.5 Scenarios .......................................................................................................... 36
　3.2 Iron & Steel ............................................................................................................. 38
　　3.2.1 International Standing ...................................................................................... 38
　　3.2.2 Technology Trends .......................................................................................... 40
　　3.2.3 Energy Intensity and Fuel Mix ........................................................................ 40
　　3.2.4 Demand Drivers ............................................................................................... 42
　　3.2.5 Scenarios .......................................................................................................... 42
　3.3 Aluminum ............................................................................................................... 44
　　3.3.1 International Standing ...................................................................................... 44
　　3.3.2 Technology Trends .......................................................................................... 46
　　3.3.3 Energy Intensity and Fuel Mix ........................................................................ 47
　　3.3.4 Demand Drivers ............................................................................................... 48
　　3.3.5 Scenarios .......................................................................................................... 49
　3.4 Ammonia................................................................................................................. 51
　　3.4.1 International Standing ...................................................................................... 51
　　3.4.2 Technology Trends .......................................................................................... 53
　　3.4.3 Energy Intensity and Fuel Mix ........................................................................ 53
　　3.4.4 Drivers.............................................................................................................. 54
　　3.4.5 Scenarios .......................................................................................................... 54
　3.5 Ethylene .................................................................................................................. 58
　　3.5.1 International Standing ...................................................................................... 58
　　3.5.2 Technology Trends .......................................................................................... 60
　　3.5.3 Energy Intensity and Fuel Mix ........................................................................ 60
　　3.5.4 Demand Drivers ............................................................................................... 61
　　3.5.5 Scenarios .......................................................................................................... 62
　3.6. Efficiency of Energy Extraction & Transformation .............................................. 65
　　3.6.1. Coal Mining .................................................................................................... 65
　　3.6.2. Oil and Natural Gas Extraction ....................................................................... 67
　　3.6.3. Coking ............................................................................................................. 67
　　3.6.4. Oil Refining .................................................................................................... 68
　　3.6.5 Power Generation............................................................................................. 69
4. Results ........................................................................................................................... 71
　4.1 Overall Results ........................................................................................................ 71
　4.2 Residential Sector Results....................................................................................... 74
　4.3 Industrial Sector Results ......................................................................................... 77
5. Conclusions ................................................................................................................... 81
References ......................................................................................................................... 83

Appendix 1. LBNL China Lightens Up Model ................................................................ 87
1.1 Sectoral Modeling Approaches ............................................................................... 87
1.2 Residential Buildings .............................................................................................. 88
1.3 Commercial Buildings ............................................................................................ 89
1.4 Transportation ......................................................................................................... 94
1.5 Agriculture .............................................................................................................. 97

Executive Summary

Urbanization has re-shaped China‘s economy, society, and energy system. Between 1990 and 2007 China added 290 million new urban residents, bringing the total urbanization rate to 45%. This population adjustment spurred energy demand for construction of new buildings and infrastructure, as well as additional residential use as rural biomass was replaced with urban commercial energy services. Primary energy demand grew at an average annual rate of 10% between 2000 and 2007. Urbanization‘s effect on energy demand was compounded by the boom in domestic infrastructure investment, and in the export trade following World Trade Organization (WTO) accession in 2001.

Industry energy consumption was most directly affected by this acceleration. Whereas industry comprised 32% of 2007 U.S. energy use, it accounted for 75% of China‘s 2007 energy consumption. Five sub-sectors accounted for 78% of China‘s industry energy use in 2007: iron and steel, energy extraction and processing, chemicals, cement, and non-ferrous metals. Ferrous metals alone accounted for 25% of industry and 18% of total primary energy use. The rapid growth of heavy industry has led China to become by far the world‘s largest producer of steel, cement, aluminum, and other energy-intensive commodities. However, the energy efficiency of heavy industrial production continues to lag world best practice levels.

This study uses scenario analysis to quantify the impact of urbanization and trade on industrial and residential energy consumption from 2000 to 2025. The BAU scenario assumed 67% urbanization, frozen export amounts of heavy industrial products, and achievement of world best practices by 2025. The China Lightens Up (CLU) scenario assumed 55% urbanization, zero net exports of heavy industrial products, and more aggressive efficiency improvements by 2025. The five dominant industry sub-sectors were modeled in both scenarios using a LEAP energy end-use accounting model.

The results of this study show that a CLU-style development path would avoid 430 million tonnes coal-equivalent energy use by 2025. More than 60% of these energy savings would come from reduced activity and production levels. In carbon terms, this would amount to more than a billion-tonne reduction of energy-related carbon emissions compared with the BAU scenario in 2025, though the absolute level of emissions rises in both scenarios. Aside from the energy and carbon savings related to CLU scenario development, this study showed impending saturation effects in commercial construction, urban appliance ownership, and fertilizer application. The implication of these findings is that urbanization will have a direct impact on future energy use and emissions.policies to guide urban growth can play a central role in China‘s efforts to mitigate emissions growth.