Vast amounts of energy are consumed during the production of certain products. We will create a global system model and conduct simulations on the use of energy during production, CO2 emissions, and product supply and demand for different regions.
Industry accounts for around 30% of the world's final energy demand, with steel, cement, paper pulp, chemicals and non-ferrous metal production consuming the majority of that energy. Increasing demand from emerging countries for steel and cement in recent years has led to a global increase in energy consumption and CO2 emissions from the production of these two products.
Meanwhile, in making the shift towards a low carbon society, some countries and regions with a high rate of energy efficiency and strict restrictions on carbon emissions are shifting production operations to other less energy efficient parts of the world where there are less restrictions. This has lead to an increase in CO2 emissions caused by what is known as 'carbon leakage.' Since moving production offshore is likely to affect the international competitiveness of a country, 'border measures' are being considered including the provision of tax refunds equivalent to the carbon tax paid at the time of export and imposing a tax on imports from low energy efficiency regions.
By estimating short and midterm trends for the production and trade of products that consume vast amounts of energy during production, we intend to study the effect a carbon tax or other policies restricting carbon emissions would have on carbon leakage and global competitiveness, and present effective countermeasures.