Essay Sample on China's Iron & Steel Industry: Booming Since the 1990s

Introduction

China has seen its iron and steel industry develop rapidly since the 1990s due to the high demand of these products worldwide. China reached an output of 200 million tons for the initial time in 2003, thereby becoming the original country to exceed the limit of 200 million tons (Diao et al., 2009). The iron and steel industry is a highly energy consuming, air-polluting, and high emission sector which has attracted the attention of the government of China. The iron and steel industry depends on coal to supply it with energy. However, coal produces a high percentage of direct CO2 emissions. This makes steel plants the most significant source of harmful emissions after coal plants. According to Dong, Sun & Dong (2018), currently, china produces almost half of the global total manufacture, which is about 930 million tons. CO2 emissions have a massive environmental impact in China, and the world and the government intend to ensure that the industry is regulated to reach ultra-low emissions to protect its citizens from the highly polluted air (Zhang et al., 2014). Regulating the iron and steel industry will affect production and in turn, the economic growth which is associated with the industry.

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Research by Wang, Li, Fang & Zhou (2016), did a study that sought to find out the causal link between carbon dioxide emissions, energy consumption and real economic output using panel cointegration as well as panel vector error correction modeling methods. The study used panel data of 28 provinces in China from 1995 to 2007. The results of the study showed that CO2 emissions, energy consumption, and economic growth were cointegrated. Additionally, there was bidirectional causality between CO2 emissions and energy consumption as well as energy consumption and economic growth (Xie & Liu, 2019). Energy consumption and economic growth are the long term sources for CO2 emissions while CO2 emissions and economic growth are the longstanding sources for energy consumption (Qin et al., 2019). Therefore, it shows that China's CO2 discharges will not reduce in a lengthy period because decreasing CO2 emissions will shrink China's economic growth.

Bloch, Rafiq & Salim (2012) conducted a study whose aim was to investigate the connection between coal usage and income in China employing both the supply-side and demand frameworks. The results indicated that it is quite hard for china to greenhouse gas reduction policy by decreasing coal depletion.

Li, Qiao & Shi (2019) carried out a study to determine the overall effect of the Clean Air Action from 2013-2017 on the growth of the manufacturing industry. The program is regarded as the major and current environmental programs in china. The study revealed that the program reduced manufacturing in the Beijing-Tianjin-Hebei region. The strict air pollution regulation caused a loss of 408 billion Yuan which represents 6.5 percent of the regional GDP in 2013. The regulation reduced the growth of manufacturing in Hebei by 5.9 percent and Tianjin by 9.6 percent by 5.9 percent.

Iron and steel industry, as well as construction material industry, contribute significantly to china's CO2 emission. The study by Liu, Tian, Cai, Chen & Wang (2018) meant to investigate the impact of the various transitions in the iron and steel industry such as scale expansion, efficiency improvement and alterations in demand and production structures. The internal efficiency improvement of the iron and steel industry caused a decline of CO2 emission by 78 percent (Zhang et al., 2012). The manufacturing and machinery sectors have, however, become the most substantial emission sources leading to about 536 Mt CO2 emissions in 2012 as it consumes iron and steel products (Liu et al., 2018).

Ouyang, Shao, Zhu, He, Xiang & Wei (2019) carried out a study whose aim was to investigate the non-linear effects of environmental regulation on economic growth on particles with a diameter of <2.5 mm (PM2.5). The study employed a panel threshold model. The study also sought to determine the social-economic factors that contribute to PM2.5 emissions. The results found out that environmental policy strictness has an effect of reducing emissions. Expansion of service industry diminishes pollution (Yu et al., 2015). Further, an inverted U-shaped link exists between urbanization and pollution. GDP per capita has a negative correlation with (PM2.5) (Ouyang et al., 2019).

Sheehan, Cheng, English & Sun (2014) states that China is faced with a grave air pollution issue, but it is trying to actively reshape its energy system, by establishing renewables and on existing supplies of gas. This is expected to diminish global warming and offer climate change.

Cleaning china's air is critical to comply with the requirement set by WHO which is 35 micrograms per cubic meter. The fine particles such as soot, sulfates, and organics are incredibly harmful to human health, and this has seen china implement the first national environmental standard for reducing the amount of small specks in the air (Wang & Hao, 2012). To achieve the required air quality standards, China must reduce emissions, reduce the use of fossil fuels and decentralize its environmental enforcement which is more inclined to economic development (Zhang, He & Huo, 2012).

China is considered the main manufacturer and end user of steel. The steel industry is also the most air polluting and has caused severe problems in China (Xu & Lin, 2016). The study sought to determine the emissions by the steel industry and the reduction measures put in place in China's steel sector. The suggestions to address the problem are to eradicate backward steel production methods, improve steel-producing technology, enforce government regulations, and improve efficiency in the sector (Zhou, & Yang, 2016).

Conclusion

In conclusion, the articles indicate that air pollution is high in China because steel production uses coal, and the production is in massive quantities. The iron and steel industry produces very high amounts of CO2 emissions. The efforts to decrease the CO2 releases by implementing stringent measures affects the iron and steel manufacturing negatively as it shrinks it. Further, environmental enforcement favors the industry because of the economic growth and development that it brings to the people of China. However, the iron and steel need to be regulated to the release of small particles that is harmful to the health of human beings.

References

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Diao, X. D., Zeng, S. X., Tam, C. M., & Tam, V. W. (2009). EKC analysis for studying economic growth and environmental quality: a case study in China. Journal of Cleaner Production, 17(5), 541-548.

Dong, K., Sun, R., & Dong, X. (2018). CO2 emissions, natural gas and renewables, economic growth: assessing the evidence from China. Science of the Total Environment, 640, 293-302. https://doi.org/10.1016/j.scitotenv.2018.05.322

Li, X., Qiao, Y., & Shi, L. (2019). Has China's war on pollution slowed the growth of its manufacturing and by how much? Evidence from the Clean Air Action. China Economic Review, 53, 271-289. https://doi.org/10.1016/j.chieco.2018.08.015

Liu, S., Tian, X., Cai, W., Chen, W., & Wang, Y. (2018). How the transitions in iron and steel and construction material industries impact China's CO2 emissions: Comprehensive analysis from an inter-sector linked perspective. Applied energy, 211, 64-75. https://doi.org/10.1016/j.apenergy.2017.11.040

Ouyang, X., Shao, Q., Zhu, X., He, Q., Xiang, C., & Wei, G. (2019). Environmental regulation, economic growth and air pollution: Panel threshold analysis for OECD countries. Science of The Total Environment, 657, 234-241. https://doi.org/10.1016/j.scitotenv.2018.12.056

Sheehan, P., Cheng, E., English, A., & Sun, F. (2014). China's response to the air pollution shock. Nature Climate Change, 4(5), 306. https://www.nature.com/articles/nclimate2197

Qin, X., Wang, X., Xu, Y., & Wei, Y. (2019). Exploring Driving Forces of Green Growth: Empirical Analysis on China's Iron and Steel Industry. Sustainability, 11(4), 1122. https://doi.org/10.3390/su11041122

Wang, S., Li, Q., Fang, C., & Zhou, C. (2016). The relationship between economic growth, energy consumption, and CO2 emissions: Empirical evidence from China. Science of the Total Environment, 542, 360-371. https://doi.org/10.1016/j.enpol.2011.06.032

Wang, S., & Hao, J. (2012). Air quality management in China: Issues, challenges, and options. Journal of Environmental Sciences, 24(1), 2-13. https://doi.org/10.1016/S1001-0742(11)60724-9

Xie, Q., & Liu, J. (2019). Combined nonlinear effects of economic growth and urbanization on CO2 emissions in China: Evidence from a panel data partially linear additive model. Energy, 186, 115868. https://doi.org/10.1016/j.energy.2019.115868

Xu, B., & Lin, B. (2016). Regional differences in the CO2 emissions of China's iron and steel industry: regional heterogeneity. Energy Policy, 88, 422-434. https://doi.org/10.1016/j.enpol.2015.11.001

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Yu, B., Li, X., Qiao, Y., & Shi, L. (2015). Low-carbon transition of iron and steel industry in China: carbon intensity, economic growth and policy intervention. Journal of Environmental Sciences, 28, 137-147. https://doi.org/10.1016/j.jes.2014.04.020

Zhang, S., Worrell, E., Crijns-Graus, W., Wagner, F., & Cofala, J. (2014). Co-benefits of energy efficiency improvement and air pollution abatement in the Chinese iron and steel industry. Energy, 78, 333-345. https://doi.org/10.1016/j.energy.2014.10.018

Zhang, B., Wang, Z., Yin, J., & Su, L. (2012). CO2 emission reduction within Chinese iron & steel industry: practices, determinants and performance. Journal of Cleaner Production, 33, 167-178. https://doi.org/10.1016/j.jclepro.2012.04.012

Zhang, Q., He, K., & Huo, H. (2012). Policy: cleaning China's air. Nature, 484(7393), 161. https://www.nature.com/articles/484161a

Zhou, K., & Yang, S. (2016). Emission reduction of China s steel industry: Progress and challenges. Renewable and Sustainable Energy Reviews, 61, 319-327. https://doi.org/10.1016/j.rser.2016.04.009