Journal of Applied Input-Output Analysis, Vol. 4, 1997

An Input-Output Analysis on Japan-China Environmental Problem:
Compilation of the Input-Output Table for the Analysis of
Energy and Air Pollutants1

By

Hitoshi Hayami*and Takayuki Kiji*
Abstract
When viewed from a worldwide perspective, issues involving energy resources and theenvironment are undoubtedly important. We compiled the Japan-China Input-Output Tables
with common industrial classifications for energy sources and air pollutants. It provides thefirst really accurate information with respect to energy and the generation and emission of

air pollutants. Our analysis has shown that the emission of CO2 in China is twice as high asthat in Japan, and 20 times higher in the case of SOx.

1. Introduction
Nowadays, new environmental problems on a worldwide scale, such as the effects ofglobal warming and deforestation due to acid rain, have been raised. These newenvironmental issues, unlike pollution problems pertaining to specified areas, such as
Minamata disease, Itai-Itai disease, or Yokkaichi Asthma, which Japan has experienced
in the past, are problems which threaten the global environment. As their effects spread

across national borders, these environmental problems cannot be solved by the efforts
of a single country. Furthermore, as these are resource issues closely related to

production activities and energy consumption which are indispensable to everyday life,
if these problems are not dealt with soon, they may lead to consequences that endanger

economic development and in turn, endanger the lives of human beings.
In Japan, emissions of CO2, NOx and SOx, as a proportion of the GNP, are theManuscript received November 15, 1995. Revised October 10, 1997.
Keio University, Japan

1 This study is a joint research comprising the Ministry of International Trade and Industry in Japan,
State Statistical Bureau (China), Environmental Protection Bureau (China) and Keio Economic
Observatory of Keio University, headed by Professor Masahiro Kuroda (former Director of the Keio
Economic Observatory, Faculty of Business and Commerce, Keio University). The authors are gratefulto Miss Wong Yu Ching (Japan Center for International Finance) for her English translation. However,

the authors remain responsible for the errors in this paper.

24

Journal of Applied Input-Output Analysis, Vol. 4, 1997

lowest in the developed world.

However, in contrast to Japan or the westernindustrialised nations, Russia, East Europe and the Asian developing economies
countries lag behind in environmental policies. In particular, they are responsible for alarge share of SOx emissions. For the Asian region, China is the source of 70% of the
SOx emissions, and 40% of the CO2 emissions in the region. Therefore, efforts taken by
China to improve the environment are of critical importance to Asia and the rest of theworld.
At the Earth Summit held in Brazil between 3-24 June 1992, 155 nations, including

Japan, signed the Framework Convention on Climate Change; the signatories from thedeveloped countries agreeing to reduce, by the end of the 1990s, the emission ofgreenhouse gases such as CO2 to those of 1990 levels.

However, the Earth's environment is faced with the dilemma that a certain level of
economic growth is necessary for the maintenance and improvement of its environment;

while at the same time acknowledging that economic growth may hasten environmental
destruction. Consequently, the usual point of contention during discussion of energy andenvironmental issues at the international level, lies in who should bear the costs orwhether it is feasible to treat all countries as equal, regardless of differences in national

income. Hence, if we were to formulate energy saving and environmental policies inwhich international agreements, including the developing countries, are likely, we haveto search for the 'solution' from the perspective of combining the three issues: namely,

energy supply, the maintenance and improvement of the Earth's environment andeconomic growth together.

2.

Compilationof theJapan-China

Input-Output

Table;

withCommon Classification for the Analysis of Energy and Air
Pollutants
In 1970, the International Pollution Symposium, organized by the International Social

Science Council, was held in Tokyo. In a speech given by Professor Wasilly W.

Leontief, ('Environmental Repercussions and the Economic Structure: An Input-output

Approach'2), the Professor proposed make explicit reference to pollutants in the input-

output table, which is generally understood as those products (or by-products or waste

products, etc.) with no market value. This allows us to analyze the relationship between
production activities and pollution generation; the cost of preventing pollution, and theeffects of pollution preventing activities on production activities or industrial structure.

The main purpose of the models proposed by Leontief was to measure the social costs
involved in achieving an environmentally acceptable standard.

The Input-Output Table for Pollution Analysis for the year 1968 was compiled by
the Research and Statistics Department of the Ministry of International Trade and2 Leontief, W.W. (1970), 'Environmental Repercussions and the Economic Structure: An Input-output
Approach', Review ofEconomics and Statistics, Vol.52, No. 3, pp.262-271.

An Input-Output Analysis on Japan-China Environmental Problem

Basic Transaction

Same as L.H.S(Monetary Value Table)

Final Demand Section

25

Intermediate Transaction Section
45x6

45x45

Value-added Section
4x45

Energy Related Material

Same as L.H.S(Physical Unit Table)

Final Demand

Japan: 37x45

Japan: 37x6

China: 17x45

China: 17x6

Energy Consumption

Same as L.H.S(Physical Unit Table)

Final Demand

Japan: 31x45

Japan: 31x2

China: 16x45

China: 16x2

Calorie Table

Same as L.H.S

Final Demand
Japan: 31x45

Japan: 31x2

China: 16x45

China: 16x2

Atmospheric Pollutant Substance'sSame as L.H.S

Contents and Emission Table

Final Demand

CO2, SOX, (NOX), Soot & Dust
Japan: 5x45

Japan: 5x2

China: 5x45

China: 5x2

Note: L.H.S: Left-hand side

Figure 1: Conceptual Diagram of the Japan-China Input-Output Table for Energy andAtmospheric Pollution Analysis

26

Journal of Applied Input-Output Analysis, Vol. 4, 1997

Industry (MITI), the Industrial Location & Environmental Protection Bureau and the
Kanton Bureau of International Trade and Industry in 1971. The Input-Output Table
for Pollution Analysis for 1973 at a national level was later compiled in 1976.

The table compiled by MITI was an expanded version of Leontief s, and it
contained the following features,(1) Polluting agents comprise the oxides of sulphur, water pollution, suspended
solids and industrial waste. The above selection of polluting agents was due tothe fact that the main pollution problems at that time were Itai-Itai disease andMinamata disease, both caused by water and soil pollution; and Yokkaichi

Asthma and photochemical smog caused by SOx and NOx.

(2) Sources of pollution are limited to the industrial sectors: pollution generated inhouseholds (waste gas from vehicles and rubbish, etc.) is not considered.
(3) In Leontief s framework, it is assumed that the cost of anti-pollution is the same

regardless of whether it is performed by the public sector or the industrial
sectors. On the other hand, in MITFs table, the cost of anti-pollution activity
varies according to industries. Hence, this allows us to analyze the relations
between pollution and changes in industrial structure, as well as economic
development.

(4) Besides

the

input

coefficients,

investment

is

also

dividedinto

variouscomponents. This makes possible the construction of a dynamic model on
pollution prevention.

MITFs table showed that the rate of removalof polluting agentsin themanufacturing industries was very low, being 7.9% for sulphur oxides, 16.8% forwater pollution and 30.0% for suspended solids.

China has, until recently, compiled an input-output table based on a system ofmaterial products balances (MPS), which differs from the system adopted by Japan or

western countries. Two years ago, the input-output table (1987) based on SNA was
first compiled, thus making comparison with Japan possible. From this, the Japan-

China Input-output Table for the Analysis of Energy and Air Pollutants is compiled,with the co-operation of the Ministry of International Trade and Industry in Japan, State
Statistical Bureau(China),Environmental Protection Bureau (China) and Keio

Economic Observatory (KEO) of Keio University. This compilation of a two-country
input-output table for environmental analysis is the first attempt in the world.

The Japan-China Input-output Table for the analysis of energy and air pollutantsconsisted of five parts. As shown in Figure 1, the Japan-China Input-Output Table
follows the format of the Japan Input-output Table for Environmental Analysis

compiled by KEO. While the analyses by the KEO group focus on cases in which
pollutants such as CO2 are not being eliminated, the Japan-China Input-Output Table

also takes into consideration the generation and emission of soot and dust, and SOx3.

* See Yoshioka, Hayami and Wong (1995).

An Input-Output Analysis on Japan-China Environmental Problem

27

The process of compilation is summarized as follows:Firstly, 45 sectors are included in the basic transaction table. As the dummy sectors
and private transport sector of Japan are not found in the Chinese input-output table,
their values are distributed in intermediate transactions. Although the initial Chinese
input-output table is not divided into exports and imports, they are disaggregated into
exports and imports with the help of the State Statistical Bureau.

Secondly, the physical unit table for energy is compiled for energy related materials
and other SOx and CO2 generating materials (limestone, iron ore and copper ore, etc.).
For Japan, aggregation is based on the energy physical unit table compiled by the KEO

group and new estimations of the inputs of briquettes and oval briquettes are made. For
China, in addition to the data compiled by the State Statistical Bureau, we compiled, byourselves, the figures for limestone and the treatment of waste fluid pulp.

Thirdly, as the physical unit table for energy consumption consists of raw materials
used in the manufacturing of products such as crude oil or raw material coal, andmaterials used in combustion in the respective sectors, they are converted into a
combustion base. We estimated the emission of air pollutants by multiplying energy
inputs in combustion base with the emission coefficients.
However, as for the estimation of SOx in Japan, an estimation is made separately
for mobile and fixed sources of generation. For China, in sectors like oil refining,chemical, gas and coal products and coke, estimates of SOx from raw material usage

and from consumption are made separately.
Fourthly, the calorie table is obtained by converting energy consumption into

calorific values. Emission quantity is estimated by the method whereby calorie

consumption is multiplied by calorie equipment emission coefficient4.

3. Estimating the Emission of Air Pollutants
Air pollutants focused on this paper include CO2, SOx, soot and dust, and NOx. For

CO2 and Sox, they are estimated separately for each country, as the fuels used in therespective countries contain different levels of carbon and sulphur. The generation of
CO2 is estimated based on carbon content, whereas for Sox, both generation andemission quantities are estimated. For soot and dust, only the emission quantity is
estimated for Japan; whereas generation, removal and emission quantities are estimatedfor China. However, emission coefficients of NOx are not available for China;
estimation

is

based

on

Americaemissioncoefficient

figures

providedby the4 In estimations done by the KEO group and the Science and Technology Agency, the following method
is used in principle, calorie consumption x calorie equivalent emission coefficient = emission quantity.
See Yoshioka, K., Tonooka, Y., Hayami, H., Ikeda, A. and Suga, M., 'Compilation of the Input-Output
Table for Environmental Analysis', KEO Occasional Paper, No. 26, October 1992; and Science andTechnology Agency (ed.), Energy Usage in Asia and the Earth's Environment, Ministry of FinancePublishing Bureau, April 1992.

28

Journal of Applied Input-Output Analysis, Vol. 4, 1997

Environmental Protection Bureau. For the estimation of soot and dust in both countries,
we only estimate the generation from fixed generation sources, thus omitting mobile
generation sources such as motor vehicles.

3.1. Estimation of Air Pollutants in JapanFor the generation of CO2 in Japan, the estimation results obtained by the KEO groupare used. However, for CO2 emission from briquettes, oval briquettes and gases, a new

estimation is made based on the carbon balance table drawn up from information
gathered from interviews.

For the estimation of SOx, energy is divided into that used in fixed generation

sources and that used in mobile production sources. As for fixed generation sources, thesulphur content is classified by use and type of energy; the SOx generation then being

estimated accordingly. Emissions from fixed generation sources are then estimated bymultiplying the quantity generated with the rates of removal obtained from the 'Survey

on Air Pollutants Emission'; jointly carried out by the Environmental Agency and MITI.
SO2 emissions from, for instance, the heating systems in buildings, are distributed using
energy input coefficients of head offices based on data from the Tokyo Metropolitan
Input-Output Table. With regard to mobile generation sources, the respective energy

consumption rates are multiplied by the emission coefficient for automobiles, and theemission coefficient for airplanes, respectively. As for SOx from ships, this is estimatedfrom the sulphur content of the various kinds of petroleum used in ships. Reduction

rates in each sector are the ratios of SOx emissions to the aggregation of sulphur
content.

The sulphur content and emissions from cement, coke, briquettes and oval

briquettes are estimated from the sulphur balance table drawn up from information
gathered in interviews.

As for the estimation of soot and dusts emissions, we combined the information
obtained from the survey on air pollutants and energy consumption in the input-output

table.
Finally, the estimation for NOx is obtained by aggregation and refinement of the
KEO group's estimation results.

3.2. Estimation of Air Pollutants in China
For the estimation of CO2 in China, carbon content data for coal provided by theEnvironmental Protection Bureau in China possibly do not co-ordinate with coalconsumption as recorded in energy statistics5. Hence, the estimate is based on the
Science and Technology Agency's study of the relation between carbon content andheat generation per kilogram. Further, lower calorific values are revised to higher

5 Regarding this point, and the coal and sulphur content in briquettes are kindly provided by Mr.

Nagasawa, Director of the Kasukabe Laboratory, Institute of Coal Technology, and Mr. Araki, Plant
Manager of Hashimoto Shiogama Pte. Ltd.

An Input-Output Analysis on Japan-China Environmental Problem

29

calorific values, based on Japanese information. For petroleum and gases, estimations
are made on the basis of data provided by the Environmental Protection Bureau in
China, with a part of the estimation being supplemented with carbon content data inJapan. As statistical data on the input of limestone are not available in China, SOx fromlimestone is estimated on the basis of cement production. As for pulp fluid waste, theestimation is made from the output of pulp, based on China's disposal rate data. The
output figures of briquettes and oval briquettes are estimated from raw material inputs,
and their consumption is made equal to output. Accordingly, a part of the coal input inthe coal product sector is assumed to be used as raw materials for processed coal, andthe estimation made by including the mass of limestone used as adhesive.
With regard to SOx, the quantity generated is estimated separately from the sulphur
content in different fuel types and different uses. As for sulphur generated from thesmelting of non-ferrous metal, we made use of data supplied by the Environmental
Protection Bureau. For sulphur that is absorbed in the production process of cement,
the estimation is made based on data from a Japanese company which uses a rotary kiln.
In the case of cement, even without having removal activity carried out, the sulphur

element is taken in by the products, and hence our estimations are based on the sulphur
balance table compiled from information obtained from interviews. A similar procedure

also applied to coke6.
In the other sectors, the sulphur elements contained in fuels may be combusted orleft intact. The latter case refers to sulphur elements contained in ashes, slag, or sootand dust. In this analysis, our estimation of SOx emissions exclude the non-combusted
portion. In more concrete terms, in the case of Japan, SOx emitted from chimneys andexhaust fumes from automobiles are estimated from an actual investigation, and theratio of emission to generation is taken as the reduction rate. A similar technique is usedin the case of China, and reduction rates by sector are set up based on data provided by

the Environmental Protection Bureau. However, for briquettes and oval briquettes, thegenerated quantity is reduced due to the high content of non-combusted sulphur
elements.

As for the estimation of soot and dust, we have relied entirely on data provided by
the Environmental Protection Bureau.

Finally, in the case of NOx, we use American estimates supplied by theEnvironmental Protection Bureau.

4. An

Overview of the Japan-China

Input-Output Table with

Common Classification for the Analysis of Energy and Air
Pollutants
Both Tables 1 and 2 show the original 45-sector table aggregated into three sectors in

6 We received valuable information from Mr. Tsuru of Tokyo Gas on sulphur and carbon content in cokeproduction.

Table 1: Input-Output Table for Energy and Atmospheric Pollution Analysis: Japan (3-Sector, 1985)

4:Endogeneous

5: Domestic

Total Domestic

Total

Final Demand

Demand2153502

31538469

4557422

133133532

55237343

192537700

285343840968091

68715632

04:Intermediate Inputs(l mil yen)8554826

201952027

05:Value-added(l mil yen)10539989

06:Total(lmilyen)

1: Primary 2: Secondary

6: Exports

7: Imports

36095891

94841-17095917

87253794

279791494

38691134-15337091

112537161

228468254

341005415

8758677-5185181

126106477

666819263

320279470

987098733

47544652-37618189

101193510

218472434

330205933

19094815

303145537

344578911

997025196

320279470

1317304666

47544652-37618189

318

84367522365

866358704

867062867375259642784

68550080

136866616

26470504

163337120

4160

233804162611400575135002535577209

57020014836

585257424

58568179633

577231626027128289022669215095823578

201071139844344493116102460595

13:Energy Inputs(Tcal)

87092

219212094951332262144632793692004

14:CO2Contents(CO2:103t)

23373

62390924605589333793174

986511

15:SOxContents(SO2:t)

68992

2609547

81232334908624836

3495698

16:SOxEmission(SO2:t)

40986

66907044018111502362868

1153104

1369

77128

21983

100648Industry

Industry

OlrPrimary Industry(l mil yen)

1534563

27850404

02: Secondary Industry(l mil yen)4166825

03:Others(lmilyen)

07:Coal(10,000t)

08:Crude Oil and Petroleum(kl)

09:Electricity(mil.kWh)
10:Coal(Tcal)
1 liCrude Oil and Petroleum(Tcal)

12:Electricity(Tcal)

17:Soot and Dust Emission(t)3:Others

Table 2: Input-Output Table of Energy and Atmospheric Pollution Analysis: China (3-Sector, 1987)

l:Primary

2:Secondary

Industry

3:OthefS

7257776

19287304

02 Secondary Industry(10 thousand yuan)

8218039

56868979

03:Others(10 thousand yuan)

211536511739794

8512125

22367284

49423161

04intermediate Inputs(10 thousand yuan)

1759118087896077

36900368

142387625

116413926

05:Value-added(10 thousand yuan)

37307153

41800664

35132901

114240718

06:Total(10 thousand yuan)

54898333

129696741

72033269

256628343

116413926

373042269

07:Coal(104t)

6693

63605

7318

77616

17186

94803

08:Petroleum(104t)

1337

4235

2765

8337

274

8611

09:Electricity(108kWh)

773

3571

348

4693

292

4985

10:Coal(Tcal)

369797366733640064444377789757965413574

ll:Petroleum(Tcal)

13577542585128228884390927898

871807

Industiy01:Primary Industry(10 thousand yuan)_.

4 :Endogeneous 5: Domestic Final

Total

Demand273441929279499

25653824

90740842

Total Domestic

Demand6:ExpOl1S

7:ImpOltS

244379810

53659309

2788781-1549757

42610955

133351797

12357462-16012518

71790445

568454-325630258801551

15714697-17887905

15714697-17887905

66498

30707829934

40351025140

428650

13:Energy Inputs(Tcal)

6112314579704

7356325926567

10605446987111

14:CO2Contents(CO2:103t)

1799171597954235978

2013849

3621992376048

15:SOX Contents(SO2:t)

1491976

15965786

1860191

19317953

4080806

23398759

16:SOx Emission(SO2:t)

145611213412882

178578316654778

367272520327503

17:Soot and Dust Emission(t)1593047

14592408

1988529

18173984

85476019028744

12:Electricity(Tcal)

f
+

I1
O

B'

32

Journal of Applied Input-Output Analysis, Vol. 4, 1997

both Japan and China. Furthermore, with respect to energy in physical units, these aredisplayed in broad categories such as 'coal' or 'petroleum'7. As the Japanese basic

transaction table is split to show sectors such as private transport and the dummy
sectors, the values are different from figures published in the 1985 Input-Output Table.
Energy consumption in Japan is based upon figures in the physical unit table attached to
the 1985 Input-output Table, with the deficient parts being supplemented by data from
Statistics on Production Activities and The Structure Survey of Energy Consumption
in Commerce, Mining and Manufacturing.

4.1. A Comparison of Energy StructureFirstly, Japan's dependency on coal accounted for 16% of the energy total; with thelargest part being used in the secondary sector and the production of electric power andgas. In contrast, 75% of the total energy in China is supplied by coal, and the input into
the secondary sector constituted 68% of the total coal consumption. In addition,
households accounted for 18% of the total coal consumption. Following coal arepetroleum and electric power, each constituting only about 6% of the total energy. On
the other hand, 40% of the total energy consumption in Japan is supplied by petroleum.
Other than petroleum, supplies from coal and electric power constitute 15% and 12.5%,
respectively.
Next, in terms of energy consumption structure, about 60% of the total energy
consumption in Japan is in the secondary sector, which is lower than the 65% in China.
In contrast, whereas 26% of the total energy is consumed by the tertiary sector in Japan,
the corresponding is only 11% for China. On the contrary, energy consumption in
China is high in both households and the primary sector.

For the types of energy consumed in the respective sectors, whereas coal andpetroleum occupy about same portions in the secondary sector in Japan, coal constitutes

the greatest share in China. In Japan, the use of electric power is greater in households
and the tertiary sector.

Japan's dependency on petroleum is high in all sectors, including households. On
the other hand, in the case of China, instead of petroleum, both the secondary sector andhouseholds depend more on electric power. The above differences between Japan and
China could be attributed to the difference in the increase in automobiles in bothcountries.

4.2. A Comparison of the Relative Composition of Air Pollutants
The total CO2 generated in China is estimated to reach 2.376 billion tons (in molecularmass of CO2; or 0.648 billion tons in molecular mass of carbon), as compared to thetotal emission of 0.987 billion tons in Japan (in molecular mass of CO2; or 0.300 billion
tons in molecular mass of carbon). In China, 70% of CO2 is produced by coal, with the

7 Detailed tables will be published from Tsusho-sangyo-chosakai as 'Japanese and Chinese Input-Output
Tables for Energy Consumption and Atomospheric Environments Analysis' on June 1994.

An Input-Output Analysis on Japan-China Environmental Problem

33

secondary sector (67%) and households (15%) generating 83% of the total; while thetertiary sector generates 10% of the total CCte. In Japan, generation rates by thesecondary sector and households are 63% and 10%, respectively, but the sharecontributed by the tertiary sector can reach 25%, which is higher than that in China.
In the case of Japan, as a large amount of coal is used in the secondary sector, thisresults in the high generation of CCte.

Generation of SOx in China amounted to 23.4 million tons (in molecular mass of
SOx), which is in sharp contrast to the 3.5 million tons in Japan. The greater theamount of coal with a high sulphur content used, the higher the generation of SOx. In
Japan, the share of SOx is high in the secondary sector (75%), which together with thetertiary sector, constitutes 97% of the total generation. Contrastingly, in the case of

China, the share contributed by the secondary sector is 67.3%, followed by 8% from thetertiary sector and 17% from households. As households in Japan contribute only 0.1%of the total generation, the problem of SOx in Japan is related to the industry. However,the same does not apply for China.

Emissions of SOx amounted to 20.31 million tons in China, as compared to the 1.15

million tons emitted in Japan. Of the total 1.15 million tons emitted, 38% is from thetertiary sector. With removal measures being carried out in the secondary sector,
emissions are lower than the quantity generated.
As for soot and dust, emissions from the secondary sector constitute 77% of thetotal in both Japan and China. Although there is no analysis of emissions of soot anddust from households, about 4% of the emission is from households in the case of China.
Emissions from the tertiary sector are as high as 22% in Japan, which is relatively
higher than the corresponding 10% in China. As measures on the reduction of soot anddust have for long focused on the secondary sector, the above estimates suggest that weshould also focus on the tertiary sector in the future.

5o A Comparison of Generation and Emission Coefficients of Air
Pollutants in Japan and China
The differences in the emission quantities of air pollutants in Japan and China could be
attributed to the following three factors. The first factor concerns whether removal
activity is being carried out. This has a great effect on the emission of SOx, soot anddust. The second factor lies in the differences in the type of energy consumed. The main
source of energy in China is coal, which contains high levels of both sulphur and carbon,
in contrast to Japan, which mainly relies on petroleum. The third factor is in the

difference in energy consumption per unit of product. With equipment that is low inheat efficiency, a greater quantity of energy input will be required for the same output.

Hence, using production methods that are naturally energy saving should result in asimultaneous rise in heat efficiency and environmental protection.

34

Journal of Applied Input-Output Analysis, Vol. 4, 1997

5.1. A Comparison of SOx Reduction Rates
The SOx reduction rate is found to be on average 67% in Japan, as compared to 14% in
China. Desulfiirization equipment for removing SOx is almost non-existent in China.

The quantity of SOx reduced in China consists mainly of ashes left in boilers of low
efficiency. In Japan, the desulhurization rates of electricity, chemical, iron and steel,

non-ferrous metal and metallic products range between 75-90%. In the case of China,
the reduction rate remains low at 4% even in the case of electricity.

5.2. The Calculation Method of the CO2 Emission Coefficient Per Calorieof Energy Consumption
The operation of desulfiirization equipment may have the effect of increasing energy

needs. To examine this effect, we can compare the emission per calorie of energy
consumption. The rate of emission from energy consumption per calorie, is usually theemission coefficients defined by energy type or boiler type. However, in this paper, we
compare the emission coefficients per calorie consumed aggregated by sector. The

differences will basically reflect the composition of fuels used. In other words, using
coal which contains high levels of carbon and sulphur will increase the quantity ofemission. In comparison, using gas containing a high level of hydrogen will reduce thecoefficients. However, the problem here is that depending on whether electric power orheat supply is included as calorie input, the interpretation of the values will change
accordingly. In the case of Japan (in which the utilization rate of electric power is high),converting the amount of electricity into calories will result in a smaller value. In thispaper, the following ratio is used for comparison,(Quantity of Emission in China / Calorie of Primary Energy Consumption) /(Quantity of Emission in Japan / Calorie of Primary Energy Consumption)

5.3. A Comparison of CO2 Generation Coefficients Per Calorie of Energy
Consumption
Limiting the calculation of calorie consumption to the case of fossil fuels, it is foundthat CO2 emission coefficient of China is 1.187 times greater than that of Japan as awhole. Industries in which large differences arise are iron and steel (1.63 times) andhousehold consumption (1.30 times). If electric power is added to fossil fuels, then the

difference becomes 1.273 times. This is especially so with wood and furniture (2.87),
medical products (2.72), electrical machinery (2.40), electronics (2.64) and railways(2.69), all having differences greater than 2.30 times. As the iron and steel industry inJapan produce their own electric power, and the purchase from industrial electric poweris very small, the industry utilizes energy with low CO2 emissions.
Industries in which China has lower emission coefficients (smaller than 1.0) include
gas (0.90), cement (0.68), machinery (0.97), and public enterprises (0.85). Among theabove industries, the reason for lower emission in the cement industry is obvious. ThisAn Input-Output Analysis on Japan-China Environmental Problem

35

is because, for cement in Japan, 64% of CO2 is generated from limestone. As data on
the input of limestone are not available in China, the generation of CO2 is estimatedfrom the output of cement. Since China requires double the energy level used in Japanto produce the same amount of cement, a small generation coefficient results from asmall numerator and a large denominator. As for the case of gases, this is probably due
to the use of blast furnace gas with low calorie but high carbon content.

5.4. A Comparison of SOx Generation and Emission Coefficients Per
Calorie of Energy Consumption
For SOx, great differences arise, depending on whether desulfurization is performed orotherwise. For per CO2 ton per calorie unit of fossil fuel energy consumption, thegeneration coefficient is 3.30 times; whereas the emission coefficient is 8.68 times
higher in China. In addition, the difference between both countries in terms ofcoefficients in household consumption is as high as 300 times. This is caused by thedifference in sulphur content in coal, -1.2%, as compared to 0.003% in gasoline or
kerosene. For the paper and pulp industry, while Japan is found to have a higher content

of sulphur in the generation stage, emissions in Japan are 4.7 times smaller than in
China, which emphasises the importance of desulfurization. In Japan, transport is the
only industry which has a high emission as well as generation coefficient. This is due tothe large number of vehicles in Japan, and crude petroleum has a high sulphur content.
On the other hand, as the number of automobiles is large and the ratio of vehicles using

gasoline is high, the difference in road freight transport is smaller than other industries.

5.5. A Comparison of the CO2 Emission Coefficients Per Calorie ofEnergy Consumption for Soot and Dust

Soot and dust are pollutants that produce the greatest difference, showing a differenceof 94 times. This is due mainly to the difference in whether an electronic precipitator isused. While we have seen an electronic precipitator on one of the factory floors which

we visited, it did not seem to be operating at full capacity, due to an insufficiency inelectric power.

5.6. A Comparison of Generation and Emission Coefficients Per PhysicalUnit

The difference in the quantity of pollutants generated or emitted depends largely onenergy efficiency in the production process. Figures 2 to 6 show the above differences
expressed in terms of multiplying factors. For instance, for plate glass, China requires
4.9 times calorie of fuel consumption as compared to Japan, in producing a similar 1
weight case of stake glass. Consequently, the amount of CO2 generated is 6.75 times
greater, and the amounts of SOx generated and emitted are 12.0 times and 25.3 times
greater, respectively. However, we are still in the process of checking if themeasurement unit of one weight case is the same in both countries. In the case of pulp,

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38

Journal of Applied Input-Output Analysis, Vol. 4, 1997

^ ^ 4033.34000

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SOx Emission

Consumption

Figure 6: Emission Coefficients of One Million kWh Electricity
Production (Coal and Oil) —A Japan-China Comparison

the difference in energy usage is 1.5 times per ton, and this directly affect the generationof CO2 and SOx. As for iron and steel, fuel consumption is 2.15 times higher, and thegeneration of CO2 and SOx are 3.3 times and 2.6 times greater, respectively; indicating
the importance of not only energy efficiency but also the differences in energy types andrecycling methods. In addition, the 12.7 times difference in the emission stage is due tothe availability, or otherwise, of desulfiirization equipment.

There are about twice energy productivity differences between Japan and China in
cement production. But the differences of CO2 emission per energy consumption areless than twice, since cement production induces CO2 emission by limestone calcination
other than fuels combustion. Finally, for electric power, there is a 2 times difference in

CO2 as well as fuel consumption efficiency, which is mainly affected by the rates ofnuclear power generation in Japan and hydro-power in China. The difference in SOx isagain due to the different in the type of energy and the existence, or otherwise, ofdesulfiirization equipment.

__

An Input-Output Analysis on Japan-China Environmental Problem

39

6. A Comparison of Induced Generation and Emission Quantity
Based on Repercussion Calculation
6.1. Power of Dispersion and Sensibility of Dispersion: A Comparison
We calculated the power of dispersion and the sensibility of dispersion to examine thecharacteristics of the 45-sector table aggregated from the basic tables of Japan and

China8. Plots are revealed in Figures 7 to 8 with the power of dispersion on the X-axis
and the sensibility of dispersion on the Y-axis.

A large difference in the sensibility of dispersion between Japan and China isobserved. While China has high sensibility of dispersion in agriculture and forestry, andthe chemical industries, Japan has relatively high sensibility of dispersion for oil
refinery and public enterprises. The industries that show a high sensibility of dispersion

in both Japan and China are commerce, finance and insurance. Furthermore, while in
China, iron and steel and machinery have about the same sensibility of dispersion at an
average level, electricity and oil refinery exhibit a high sensibility of dispersion. On theother hand, the power of dispersion are high for coke, cement and transport equipment
in Japan; whereas they are high in the gas and construction sectors in China. As for

cement, coke, communication and the administrative sector, both countries have similar
magnitudes. These differences are basically due to the fact that Japan is dependent on

petroleum and electric power, whereas China has an economic structure that depends on

agriculture. Nevertheless, it should be noted that there may be effects caused by the
inclusion of subsidiary sectors of Chinese agriculture.

5 See Yoshioka, Hayami and Wong (1995).

40

Journal of Applied Input-Output Analysis, Vol. 4, 1997

H Connercen^ .
Petroleum20

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Figure 7: Power of Dispersion and Sensibility of Dispersion in Japan

1.6

An Input-Output Analysis on Japan-China Environmental Problem

25

41

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Figure 8: Power of Dispersion and Sensibility of Dispersion in China

1.6

42

Journal of Applied Input-Output Analysis, Vol. 4, 1997

6.2. Generation and Emission of Air Pollutants Induced by Production
Activities
Next, we estimated the direct and indirect emission from the production of one unit ofoutput in both Japan and China, respectively. In Figures 9 to 11, emissions from China
are plotted on the Y-axis and emission from Japan are plotted on the X-axis of the samegraph. One unit of output taken as 1 million yen in Japan and 10 thousand yuan in

China. In order to have a common physical unit between the two countries, they have to
be converted using a certain parity. In this paper, we do not use any PPP, so that thefigures simply show relative differences of emission coefficients between countries.
As for CO2, the induced emission from cement is higher in Japan. On the other hand,the corresponding induced emission is greater in the case of electric power in China.
Together with cement, oil refining, finance and insurance, and "other transport" areindustries with relatively high induced CO2 emissions in Japan. In contrast, electric
power, coal mining, iron and steel, chemicals, ceramics, agriculture and forestry are allindustries with relatively high induced emissions in China.
As for the generation of SOx, China has a high emission coefficient in electricity.
Other than electricity, industries such as coal mining, iron and steel, ceramics andchemicals in China also have relatively large emission coefficients. On the other hand,for the emission of SOx, sectors such as transport and oil refining have high emissions.

An Input-Output Analysis on Japan-China Environmental Problem

0.18* Electricity

0.16

0.12

CerrKit

0.08

♦ Gas

Coal

Coke

0.04

0.02

0.00

0.02

0.03

0.04

0.05

Japan

Figure 9: Induced CO2 Generation Coefficients

43

44

Journal of Applied Input-Output Analysis, Vol. 4, 1997

2.00

1.80

1.60

1.40

1.20

2 100

u
♦Cement♦Coal

Non-ferrous nrEtal
♦

Coke
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0.20

#

Clay

♦ Coal*Chemical♦Iron♦Paper&Pulp* Other transport♦Fishery
0.02

0.04

0.06

0.08

0.10

Japan

Figure 10: Induced SO2 Generation Coefficients

0.12

0.14

An Input-Output Analysis on Japan-China Environmental Problem

£.UU

1.80

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1.60

1.40

1.20

u
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.Gas
0.60

like

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Non-ferrous metal♦ Textile

Other transport

Fishery

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nnn

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0.02

0.02

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Japan

Figure 11: Induced SO2 Emission Coefficients

0.04

0.05

45

46

Journal of Applied Input-Output Analysis, Vol. 4, 19977« Conclusions
Although we have just started our analysis of environmental problems in China, theissues involved are no doubt important. From the point of view of neighbouring

countries like Japan, and from the perspective of the whole world, issues involving

energy resources are those beyond conjecture. We have compiled the Japan-China
input-output table, with common industrial classification for energy and air pollutant

analysis. Although it may not be sufficiently detailed, applying only to 45 sectors, it
provides the first most accurate information with respect to energy, or the generationand emission of air pollutants.

Our analysis has shown that the emission of CO2 in China is twice as high as that inJapan, and 20 times higher in the case of SOx, which is a large difference whencompared with the scale of per capita income. China is very much behind Japan, in both
the removal of pollutants and energy efficiency; and this has been made clear bycomparison of quantity units. However, the crucial issue is: what is the difference inemission quantities when the same amount of economic value is produced in bothcountries? In the final section, the 45-degree line is drawn equating 1 yuan to 100 yen.

As this does not reflect purchasing power, and if 1 yuan is to be equivalent to 10-20 yen,then it is obvious that in producing the same economic value, China emits 1000 times
greater the amount of air pollutants when compared to Japan.

Instead of using the exchange rate, based upon data on quantity and data from the

input-output table, we found that the exchange parity is 75 yen/yuan for coal, whereas
electric power is 286 yen/yuan, paper and pulp: 184 yen/yuan and iron and steel: 149

yen/yuan. In addition, the induced emission of CO2 from one million yen of cement inJapan is found to be slightly more than 70 tons, which is quite similar to the 76 tons

recorded in the more accurate basic table9.
Our results of analysis obtained so far show that although the Japan-China inputoutput for the analysis of energy and air pollutants comprises only 45 sectors, it is able
to stand the test of repercussion calculation. If we are to reduce the world's total

emission of CO2 (while it is necessary for Japan to raise its energy efficiency andpromote environmental protection), the target could be more easily achieved bypromoting environmental protection policies in other Asian countries, such as China,

which have fallen behind implementing environmental measures.

References[1] Hayami, H., Ikeda, A., Suga, M. and Yoshioka, K. (1993), "Estimation of Air Pollutionsg

On the other hand, this could also be interpreted as the 70 tons obtained from the (I-A) type ofrepercussion is after all smaller than the 76 tons from (I-(I-M)A) type of repercussion. Yoshioka,
Hayami, Dceda, Suga (1992), cAn Application of the Input-Output Table for Environmental Analysis:
Emission of CO2 in Production Activities' (in Japanese), Innovation and 1-0 Techniques, Vol.3, No.4,
pp. 31-47.

An Input-Output Analysis on Japan-China Environmental Problem

47

and Evaluating CO2 Emission from Production Activities: Using Japan's 1985 InputOutput Tables", Journal ofApplied Input-Output Analysis, Vol. 1, No. 2, pp.29-45, Pan

Pacific Association of Input-Output Studies, Tokyo.
[2] Leontief, W. W. (1970), "Environmental Repercussions and the Economics Structure: An
Input-Output Approach", Review of Economics and Statistics, Vol. 52, No. 3, pp.261271.

[3]

Science and Technology Agency ed. (1992), Energy Usage in Asia and the Earth's
Environment, Ministry of Finance Publishing Bureau, April.

[4]

Yoshioka, K., Tonooka, Y., Hayami, H., Ikeda, A. and Suga, M. (1992), "Compilation of
Input-Output Table for Environment Analysis", KEO Occasional Paper, No.26.

[5] Yoshioka, K., Hayami, H., Ikeda, A. and Suga, M. (1992), "An Application of the Input-

Output Table for Environmental Analysis: Emission of CO2 in Production Activities" (inJapanese), Innovation and 1-0

Techniques,Vol.3,

No.

4, pp.31-47, Pan Pacific

Association of Input-Output Studies, Tokyo.

[6] Yoshioka, K., Hayami, H. and Wong, Y.C. (1995), "An Input-Output Analysis on Japan-

China Environmental Problem (3): Why Sox Emissions are high in China?" KEO
Discussion Paper, No. 41.