Since the onset of economic reforms in 1978, China has been remarkably successful in reducing the CO2 intensity of GDP and industrial production despite a rising share of energy-intensive industries in industrial value added and a rising CO2 intensity of fuel use. The focus in this book is on four such industries: aluminum, cement, iron and steel, and paper. The rapid decline in industry CO2 intensity was due in part to rising energy prices, increased openness to trade and investment, and increased competition. But actually realizing improved energy efficiency in Chinese industries has been highly dependent on industrial policies and institutions that encouraged enterprises to build their technological capabilities. Success in technology transfer and building more robust technological capabilities depended on enterprise investments in technological upgrading—though challenges and costs have been incurred along the way.
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