Energy Conservation and Emission Reduction of Chinese Cement Industry: From a Perspective of Factor Substitutions

Cement is an essential basic and resource, which has a significant impact on the Chinese national economy. However, at present, cement is still an unsustainable basic building material, and as such cannot be reused. During the production process, cement consumes a great deal of coal, electricity, and other energy resources. In this way, cement belongs to the category of traditional industries with a high-energy consumption and environmental impact, including the emission of serious levels of air pollutants such as dust. With increasingly serious problems relating to resources and the environment in China, the problem of energy saving and emission reduction in the cement industry is becoming more and more important. We use the translog cost function to investigate inter-factor and inter-fuel substitution in China's cement industry over the period from 1994 to 2014. The results revealed that capital is in an absolute core position, so energy or the labor force has no obvious substitution effect on capital, which leads to more and more reliance on the capital input of the cement industry. In addition, the substitution elasticity of coal and oil in the cement industry is very high. Therefore, in the process of cement production, it is possible to promote the use of natural gas.