CO₂ mitigation potential in China's building construction industry: A comparison of energy performance

Building construction is a leading industry in China's economy and is also important in the fight against climate change mitigation. This paper fills the research gap by investigating the relationship between CO₂ mitigation potential and energy performance in the building construction industry using a counterfactual analysis approach. A commonly used method is adopted to calculate energy-related CO₂ emissions in the building construction industry and a newly proposed total-factor non-radial directional distance function is conducted to calculate energy performance. Further, they are connected through a logarithmic mean Divisia index decomposition analysis. The empirical results show that: (i) CO₂ emissions in China's building construction industry are increasing rapidly and electricity consumption has become the main source of emissions. (ii) Energy intensity decline is the major contributor to CO₂ mitigation. (iii) There exists a large room for energy intensity decline and more than 10% of the CO₂ emissions could be reduced if the average energy intensity could achieve the level of the best performing provinces. (iv) The coastal regions show better energy performance than the interior regions and there is a significant tendency towards divergence of energy performance among provinces. It is thus necessary to encourage technology diffusion and mandate minimum energy performance standards.