Uncovering the overcapacity feature of China's industry and the environmental & health co-benefits from de-capacity.

ABSTRACT

Overcapacity is regarded as an inevitable problem for rapid economic developing countries like China, which also causes serious adverse impacts on the environment and public health. However, few studies have quantified the overcapacity feature and corresponding co-benefit from de-capacity policy. To fill such research gaps, this study constructed a comprehensive assessment model by combining the Data Envelopment Analysis (DEA) model, the GAINS-China (Greenhouse gas - Air pollution Interactions and Synergies) model, and a meta-analysis and health impact assessment module, to measure the capacity utilization rate of 41 industrial sectors in 31 Chinese provinces and forecast the environmental and health co-benefits from de-capacity policy in 2050. Results showed that the capacity utilization rate of China's industry is 64.13% in 2018, which is much lower than the threshold value of 75%, indicating serious overcapacity in China's industry. Capacity utilization rates of light industries are higher (around 70%) than heavy industries (50%-60%), and the capacity utilization rate in East and South-Central China is higher (70%-96%) than West China (below 40%). Under a de-capacity scenario in 2050, China's CO2 and PM2.5 emissions are reduced by 1.05 billion tons (9.6%) and 57.8 kilotons (5.8%), respectively. This reduction in PM2.5 emissions results in a substantial health co-benefit, reducing national premature mortality cases by approximately 792,100 (1.6%). Finally, it is recommended that de-capacity priority be given to industries with low capacity utilization rate, as well as regions with intensive heavy industry or high levels of greenhouse gas emissions, severe air pollution, and dense population.