Projections and Recommendations for Energy Structure and Industrial Structure Development in China through 2030: A System Dynamics Model

Abstract

In this research, we established a System Dynamics Model named “E&I-SD” to study the development of the energy structure and industrial structure in China from 2000 to 2030 using Vensim Simulation Software based on energy economy theory, system science theory and coordinated development theory. We used Direct Structure Test, Structure-oriented Behavior Test, and Behavior Pattern Test to ensure the optimal operation of the system. The model’s results showed that the indicators of total energy consumption, total added value of GDP after regulation, energy consumption per capita, and GDP per capita were on the rise in China, but emissions per unit of energy showed a downward trend. Separately, the model predicted average annual growth rates in China through 2030. Based on these findings, we proposed important policies for China’s sustainable development. Firstly, short- and long-term policy measures should be implemented to replace fossil fuels with clean energy. Secondly, the utilization efficiency of raw coal should be appraised future. The planning should provide for steady development and improvement of the primary, secondary, and tertiary sectors. Thirdly, the mid- and long-term plans for development and management of various industrial sectors and the corresponding energy consumption should be based on technological trends. Finally, a market-oriented pricing mechanism for energy should be established in China as soon as possible.