For the period of the 12th Five-Year Plan (2011–2015), the Chinese government has decided to reconsider and adjust its policies on economic development because of the pressures of CO2 emissions and fossil energy consumption. The current paper adopts the logarithmic Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model to simulate the relationship between CO2 emissions and other economic development factors in China. Three groups of outliers are found using samples from 1989 to 2008 and the Partial Least Square (PLS) regularity test method. The outlier analysis reveals three important areas for CO2 reduction: (a) decreasing the share of coal to the total energy consumption and replacing it with non-fossil energies; (b) controlling vehicles used in the cities as well as (c) adjusting industrial structure. Furthermore, based on the social and economic realities of China, the current paper designs six feasible development scenarios for the period covered by the 12th Five-Year Plan and predicts the values of each factor in each scenario. The values can test the implementation of China's CO2 control development concept. The experiences obtained by outlier analysis can be of significant reference value for realizing the predicted scenarios.
In the past two decades (1989–2008), the average annual growth rate of China's real GDP has been nearly 10.91%. At the same time, total energy consumption has also increased from 969.34 to 2850 million tons of Standard Coal Equivalent (SCE). The major portion of the China's energy consumption is in non-renewable resources. In 2008, fossil energies accounted for over 91% of the total energy consumption, of which over 68% came from coal (NBSC, 2009). The combustion of fossil fuels has emitted large amounts of CO2. Since 2007, China has become the largest CO2 emitter in the world, accounting for over 25% of the world's total emissions in 2009 (EIA, 2011). According to trend analysis, China's CO2 emissions will further increase rapidly in the next several years (Meng and Niu, 2011a). The consumption of fossil energy has affected China's living environment (Wang, 2010). More importantly, CO2 emitted from the combustion of fossil fuels is mainly responsible for the greenhouse effect, which has far-reaching effects on our lives (Liu, 2007). China's sustainability will become increasingly difficult if it maintains the development mode it has employed in the past. Many researchers have studied China's energy consumption and CO2 emissions to search for possible measures to improve its emission intensity (He et al., 2010, Donglan et al., 2010, Duan, 2010, Tan et al., 2011, Feng et al., 2011, Zhou et al., 2011 and Yi et al., 2011). They have advanced many valuable measures but have not considered the periodical characteristics of China's macro-policy.
Year 2011 is the first year of the 12th Five-Year Plan (2011–2015) in which the Chinese government will reconsider and adjust its policies on economic development and CO2 emissions. In the present study, the STIRPAT model is adopted to simulate the relationship between CO2 emissions and China's other economic development factors. After computing a logarithm, the model is converted into linear form. We select samples from 1989 to 2008 using the PLS method to exclude the influence of multicollinearity and estimate the regression parameters of the linear STIRPAT model. Additionally, we use the outlier test method to find three groups of outliers. The thorough analysis of the causes for the outliers reveals three important areas to reduce China's CO2 emission: (a) decreasing the share of coal to the total energy consumption and replacing it with non-fossil energies (e.g., hydro, nuclear, and wind power); (b) controlling vehicles used in the cities as well as (c) adjusting industrial structure (e.g., closing small thermal power plants and replacing them with a few large ones with high thermal efficiency; redesigning pollution-intensive companies).
