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The Case of Shaanxi

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The Case of Shaanxi Ekonomski horizonti, Januar - April 2015, Volumen 17, Sveska 1, 33 - 44 © Ekonomski fakultet Univerziteta u Kragujevcu UDC: 33 ISSN: 1450-863 X www. ekfak.kg.ac.rs Original scientifi c paper UDC: 332.15(510); 504.5(510) doi: 10.5937/ekonhor1501033Y CIRCULAR ECONOMY DEVELOPMENT PHASE RESEARCH BASED ON THE IPAT EQUATION: THE CASE OF SHAANXI Fang Yinga,* and Zhao Wen-pingb a Shanghai Open University, Shanghai, China b School of Economics and Management, Xidian University, Xi’an, Shaanxi, China In recent years, the worsening of the quality of the air has urged more people to att ach great importance to circular economy. Shaanxi, abundant in natural resources, maintained the GDP growth rate of 14.9% during the period of the twelfth fi ve-year plan. However, the fast economic growth under the extensive traditional economic growth mode renders Shaanxi inadequate in resources supply and noticeably worse in ecological environment issues. With the method of the IPAT equation, this paper quantitatively analyzes the developmental stage and the developmental level of the circular economy of Shaanxi to cover the shortage of the previous studies having only been focused on the policy study and the practice mode. The result shows that Shaanxi is in the intermediate stage of circular economy and the advanced stage has an apparent advantage over the intermediate one by comparing their energy consumption and solid pollutant discharge. The development experience of Shaanxi, a typical province of China, has guidance and reference signifi cance to China and other developing countries. Keywords: circular economy, IPAT equation, burden on the environment, stage of development, level of development JEL Classifi cation: Q56, Q57 INTRODUCTION issued by the Chinese Academy of Social Sciences and China Meteorological Administration (2013). The average of 29.9 smog-aff ected days nationwide The PM 2.5 of the Xi’an City of Shaanxi Province has is reported this year, which is an increase of 10.3 been found to exceed the limits frequently and its air days in comparison with the same period in the past quality has once been listed at the bott om nationwide. years, reaching the highest historical record since From January to October 2013, Xi’an ranked among the 1961, according to the Green Book of Climate Change last ten cities with poor monthly air quality for 6 times Annual Report on Actions to Address Climate Change, amongst the 74 cities. * Correspondence to: F. Ying, Shanghai Open University, 288 The worsening of the quality of the air urges more Guoshun Road, Yangpu District, Shanghai, China 200433; people to think about their ambient environment. e-mail: [email protected] Circular economy, as put forward by K. E. Boulding 34 Ekonomski horizonti (2015) 17(1), 33- 44 (1961), is a new business development model under the P. Wang, F. Che, S. Fan and C. Gu (2014) construct the guidance of sustainable development, contrary to the enterprise circular economy accounting information traditional linear economy, characterized by resources- disclosure model with Chinese characteristics and fi nd products-waste; the new mode is universally cherished that ownership governance and institutional pressures and valued across the world for its increasing the mainly determine the quality of circular economy. D. effi ciency of the utilization of ecological resources, Giurco, A. Litt leboy, T. Boyle, J. Fyfe and S. White (2014) reducing environmental pollution and tackling the explore future interlinked questions arising in circular long-standing contradiction among the resources economy for responsible supply chains, additive shortage, environment pollution and economic growth. manufacturing and metals recycling. During the period of the twelfth fi ve-year plan, the The fi ndings show that an overwhelming majority of GDP of Shaanxi Province maintained the growth rate the past research into the Chinese circular economy of 14.9%. Shaanxi is abundant in natural resources; focus on the policy model and the practice model however, the fast economic growth under the extensive research, with few of them concentrating on the traditional economic growth mode renders Shaanxi quantitative research of the development phase and inadequate in resources supply and noticeably worse the level of circular economy, and a specialized study in ecological environment issues. Recently, Shaanxi has of the development of circular economy in Shaanxi spared no eff orts in vigorously developing its circular Province is none. economy. Due to the weak economic foundation, the Based on those studies, this paper puts forward the development of the circular economy remains at a low concept of the development phase of circular economy level nationwide. The dissertation is centered on the and the measure, taking Shaanxi Province as an research into the domestic circular economy theories example, and calculates the phase of the development and the empirical study. of the circular economy of Shaanxi Province. Besides, Xu Jiu-ping and Li Bin (2010) put forward China’s the environment load is predicted through the patt ern of the circular economy of low carbon from IPAT identity in the actual stage (assuming that the energy conservation, emission reduction and energy environment load drop speed remains the same) and structure. Qi Jian-guo (2005) indicates that, due to a the advanced stage (assuming that the GDP growth small corporation scale, the lack of the scale support, remains the same); thus, diff erences between the two the unreasonable economic mechanism and the policy stages can intuitively be compared in order to highlight system, the level of the development of China’s circular the importance of developing circular economy. economy is low and improves slowly. Li Ning, Ding Si- bao and Zhao Wei (2011) computed the space diff erence of the development of the circular economy in China IPAT EQUATION and called for the quantitative measurement of circular economy. Ye Wen-Hu and Gan Hui (2009) analyze The equation was fi rst put forward by demographer and integrate the existing perspectives of circular P. R. Ehrlich (Ehrlich & Raven, 1964). M. R. Chertow economy and point out the system construction and (2000) tracks the various forms the IPAT equation the evaluation of the regional circular economy, a has taken over 30 years as a means of examining an relationship between circular economy and economic underlying shift among many environmentalists growth, a comprehensive analysis of the international toward a more accepting view of the role technology experience are the emphasis of research. Jiang Tao can play in sustainable development. Jiao Wen-xian and Zhang Tian-zhu (2007) establish the fuzzy and Chen Xing-peng (2012) analyze the characteristics comprehensive evaluation model of the coal industry to of carbon emissions from energy consumption and develop recycling economy and take Shanxi Province its composition of Gansu Province from 1990 to 2009, as an example for an empirical analysis. Tang Tian- and explore the utility of the IPAT identity in an zi (2005) summarizes the historical experience and a environment impact assessment. X. Ru, Y. Liu, L. Su review of circular economy in developed countries. and S. Chen (2012) fi nd the evolutionary process of Fang Ying and Zhao Wen-ping, Circular economy development phase research based on the IPAT equation: The case of Shaanxi 35 carbon dioxide emissions driven by technical advances GDP in the Benchmark Year, so the environmental over time to generally follow in sequence the three impact in the Year n after the Benchmark Year should inverted U-shape curves in the long run, based on be: the IPAT equation. T. Yue, R. Long, H. Chen and X. (6) Zhao (2013) determine the optimal CO2 reduction path for Jiangsu Province will have achieved the target of In the equation (6), Gn, Tn respectively stand for the 40–45% reduction of the CO2 emissions intensity by environmental impact of the GDP and per unit of the 2020, based on the 2005 level, using the IPAT model GDP in the Year n after the Benchmark Year: combined with the scenario analysis. (7) The IPAT equation describes the multiplicative contribution of the population (P), affl uence (A) and In the equation (7), g represents the annual GDP technology (T) to the environmental impact (I): growth rate from the Benchmark Year to the Year n: (1) (8) In the equation (1), I stands for the environmental In the equation (8), t stands for the annual declining impact (resources, energy depletion and waste rate of the environmental impact per unit of the GDP discharge); the variable P represents the population from the Benchmark Year to the Year n. of an area; the variable A stands for affl uence, namely the GDP per capita, A = GDP / P. The variable T in Substitute the equations (7) and (8) into (6), so: the equation represents the environmental impact generated by the per-unit GDP. (9) If wastewater is taken as an example, the equation (2) (10) is listed as below: The equations (9) and (10) are the other forms of the IGT equation. Given the Benchmark Year I or G , T (2) 0 0 0 and g, the t value, the In of the environmental impact in the Year n could be calculated. If resources depletion is taken as an example, the IPAT equation is listed as below: Equation (9) can be simplifi ed as follows: (11) (3) Conferring from the equation (11), the In variation could Cause P × A = GDP, therefore, G represents the GDP, so be fi gured out in three conditions while increasing the GDP growth: (1) when 1 + g - t- g × t > 1, I goes the IPAT equation will be: n up annually; (2) when 1 + g - t- g × t = 1, In remains the (4) same; (3) when 1 + g - t- g × t < 1, In declines annually.
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