Journal of Cleaner Production xxx (xxxx) xxx

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Roadmap of green transformation for a steel-manufacturing intensive

city in China driven by air pollution control
Feng Xu a, Fushang Cui a, Nan Xiang b, *
a
School of Economics and Management, Beijing University of Chemical Technology, Beijing, China
b
College of Economics and Management, Beijing University of Technology, Beijing, China

a r t i c l e i n f o a b s t r a c t

Article history: Steel-manufacturing cities are facing slow economic development and an increasing pressure for
Received 30 June 2020 improving and protecting their environment, making green economic transformation priority. Located in
Received in revised form the capital region, Tangshan is the largest steel producer and is ranked in the top 10 cities in China that
12 September 2020
have the worst air quality. This study aims to explore an optimisation path to pursue the green trans-
Accepted 8 October 2020
Available online xxx
formation of economic development and air-pollution control with incentives on industrial restructure
and the implementation of a cleaner production approach. In this study, we construct a green economy
Handling editor: Bin Chen transformation decision-making model to establish dynamic optimisation simulation for the period 2016
to 2025. For this purpose, we use integrating methods of system dynamics, input-output modelling, and
Keywords: dynamic multi-objective programming. The simulation results verify the existing a negative develop-
Steel city ment trend under the current situation along with the positive economic development (with acceptable
Green transformation levels of environmental pollution) when there is an increase of investments in clean production tech-
Systematic dynamic model nologies. Technology advancement and cost reduction values are explored further. When the techno-
Scenario simulation
logical cost was reduced by 15%, both the highest economic elasticity and an optimal air pollutant control
Input-output analysis
capacity can be achieved simultaneously. Additionally, the growth rate of Tangshan’s GRP can reach 39%,
while the NOX and SO2 emissions can be simultaneously reduced by 42% and 36%, respectively by the
year 2025 (compared to the emission levels and GRP in 2016). Our study has improved upon previous
research methods to put forward a specific optimisation path to achieve green economic transformation
for steel-manufacturing cities through industrial structure adjustments and technological updates. This
is also conducive to the sustainable development of similar cities that are characterized by heavy
industries.
© 2020 Elsevier Ltd. All rights reserved.

1. Introduction
Sustainable development has become a global concern for steel-
manufacturing intensive cities (thereafter referred to as steel cities)
(Wang et al., 2020a); these cities are facing the dilemma of eco-
nomic slowdown and environmental degradation. Owing to the
economic pillar status of the iron and steel sectors and the high
demand for resources and that adds an extensive burden to the
environment, the development of steel cities often has a negative
impact on the environment (Conejo et al., 2020). As the largest
producer of steel in the world, China is facing extremely serious
problems regarding the steel cities’ economy and environment.
* Corresponding author.
E-mail address: xiangnan@bjut.edu.cn (N. Xiang).
In the recent years, China has been vigorously enacting envi-
ronmental governance and policies pertaining to the ecological
processes in the country. In particular, Tangshan, which is China’s
most important steel city, has begun to suffer from the predicament
of industrial development. Tangshan is located 150 km to the east of
Beijing, and its steel industry accounts for more than 35% of the
city’s total output value. As the largest steel city in China, Tangshan
produced 139.3 million tons of steel in 2018, accounting for 12.6% of
the total steel production in China (Tangshan Bureau of Statistics
TBS, 2019; Wen and Guo, 2019). The total production of steel and
its related industries in Tangshan grossed at 674.3 billion CNY, ac-
counting for 66.2% of the city’s total industrial production in 2018.
With its good industrial base, Tangshan contributes a large amount
of industrial raw material under the guidance of the Beijing-
Tianjin-Hebei region integration strategy. However, because of its
long-term dependence on heavy industries, environmental

https://doi.org/10.1016/j.jclepro.2020.124643
0959-6526/© 2020 Elsevier Ltd. All rights reserved.

Please cite this article as: F. Xu, F. Cui and N. Xiang, Roadmap of green transformation for a steel-manufacturing intensive city in China driven by
air pollution control, Journal of Cleaner Production, https://doi.org/10.1016/j.jclepro.2020.124643
F. Xu, F. Cui and N. Xiang
problems, especially air pollution, have become increasingly
serious. Of the 74 cities that are subject to national air quality
monitoring, Tangshan ranked among the top 10 cities in China with
the worst air quality (Zhang et al., 2019). Its average annual con-
centration of PM2.5 reached 77.93 mg/m3 in the period 2014 to 2018
(Yang et al., 2019), which exceeded the national concentration
guideline standard of 35 mg/m3 (Zhang et al., 2018a).
Owing to the stringent pollution control in the Beijing-Tianjin-
Hebei economic zone, the development of a large number of
highly-polluting industries has been affected, and Tangshan’s eco-
nomic situation continues to be greatly impacted. Since 2011, eco-
nomic growth in Tangshan has slowed down; in 2014, the economic
growth of the city was 5.1% lower than the national average level, in
fact there was a negative growth of -0.8% in 2019 (TBS, 2019).
Restricted by economic recession and the pressure on its environ-
ment, the development of the steel industry has also been
impacted. Some factories have been forced to restructure or shut
down, which in turn has led to other social problems. Corre-
sponding to this, the number of industrial employees in Tangshan
has been declining each year, dropping from 1,427,300 in 2012 to
1,288,700 in 2017 (TBS, 2019). Therefore, it is clear that the devel-
opment of steel cities, represented in this study by Tangshan, is
currently constrained by economic, environmental, and social
pressures.
The atmospheric environment governance, as well as the bal-
ance of economic and environmental development has become an
urgent issue not only in Tangshan but also in steel cities around the
world. Due to rapid industrial development, global industrial cities
are also facing the deterioration of natural amenities (Mondal and
Das, 2018). This has become a common problem for global steel
cities. In China, facing severe economic and environmental pres-
sure, the government has implemented a series of air pollution
control policies, including controlling the production capacity of
high-polluting industries, fostering the green environmental pro-
tection industry, and updating the end treatment technologies (for
processes such as desulphurisation and denitrification) (Chinese
State Council, 2018). Currently, the implementation of these mea-
sures has played an important role in controlling air pollution;
however, it has also increased the burden of economic output of the
steel industry and increased unemployment in the region and its
related problems due to limitation of production capacity. There-
fore, we can deduce that the implementation of these measures has
not adequately solved the problems arising from the unbalanced
economic and environmental development in steel cities. For the
dual goals of economic growth and environmental improvement,
dynamic estimations and evaluations are required to determine
what actions need to be adopted to achieve these targets in order to
verify the feasibility of the current policies and provide an optimal
development path for steel cities, in the long term.
Aiming to study a typical steel city’s economic transformation,
this study carries out an in-depth and systematic analysis on the
coupling mechanism of industry development and air environ-
ment, and explores the social and economic benefits of incentives
to optimise the industry structure and technological investment of
the selected steel city (Tangshan, China). Further analysis of the
environmental and economic benefits of technical progress was
carried out by adopting a dynamic simulation to explore the
optimal path of Tangshan’s economic transformation. Selecting
Tangshan as the study area, this study aims to solve the dilemma of
economic decline and environmental degradation in heavy
industry-dominated cities by establishing a green economy trans-
formation decision-making model. The results provided in this
study could directly benefit the city.
The remainder of this paper is structured as follows: a literature
review is presented in Section 2, the research methodology is
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Journal of Cleaner Production xxx (xxxx) xxx
explained in Section 3, Section 4 presents the simulation analysis
and discussion of the results, and finally, the conclusions and policy
implications are discussed in Section 5.
2. Literature review
As seen in previous studies on the steel cities’ development,
certain studies analysed the transformation of steel sectors and
cities in Asia (especially in China) and Europe, especially in China
(Gianicolo et al., 2016; Ohnishi et al., 2017; Mangia et al., 2020).
Sabine et al. (2016) explored the transformation of Zurich from the
perspective of creative industries, Guan et al. (2018) studied the
urban transformation of the Shenyang city considering its indus-
trial structure evolution, and Sadowy and Lisiecki (2019) discussed
the characteristics of industrial transformation beginning in 1989
in the analysis of the transformation of the Praga area of Warsaw
from the perspective of public management. According to research
on the status quo of iron and steel cities, it can be seen that, in
recent years, the typical steel cities in the world in recent years are
going through a trend of deindustrialisation under the guidance of
emerging technologies, which accounts to a great deal in the field
of steel city research. However, only a few studies have been con-
ducted on the prediction of their future planning and development
path, which is a major deficiency in the field of iron and steel cities.
In view of the ubiquitous atmospheric environmental pollution
in steel cities during the transformation process (Wu et al., 2016;
Mondal and Das, 2018; Zhu et al., 2019), studies on regional air
pollution prevention policies and measures are emerging. Different
countries and regions make policies on air pollution control ac-
cording to their actual local situation, while scholars try to verify or
predict the implementation effects of the policies (Zhang et al.,
2014; Shi et al., 2019; Wang et al., 2020b; Li et al., 2020). Some
scholars have studied pollution management from the perspectives
of industrial transformation (Xu et al., 2017), water energy (Wang
et al., 2020c), emission reduction technology (Xiang et al., 2014;
Shi et al., 2017; Zhang et al., 2018b; Gao et al., 2020) and tax policy
(Wei et al., 2016). It can be found that current situation analyses,
environmental policies, implementation of technologies, and rele-
vant industrial transformation are all key perspectives for studying
pollution control. However, based on the existing research, the
current research is mainly one-sided. The corresponding analysis is
usually limited to the relationship between one or two factors in
the system and is not combined with the economy, industrial
structure, and technology simultaneously, making it difficult to
provide a practical basis for development. In the study of air
pollution control, there is still a lack of comprehensive studies for
the combination of iron and steel cities. This study intends to un-
derstand the transformation of iron and steel cities while consid-
ering the coupling mechanism of economic development,
industrial transformation, environmental policy, and technological
progress. This provides a fresh perspective to our study.
In terms of research methods, as qualitative analysis methods
lack innovation, most scholars adopt quantitative methods and
models. It can be seen from the method summary of recent years
that the main methods can be divided into two categories ac-
cording to the research function. One is to summarise historical
laws and analyse the current situation, such as basic statistical and
regression analysis methods (Goyal et al., 2019; Shi et al., 2019;
Wang et al., 2020b) and models derived from them, including the
greenhouse gas-air pollution interactions and synergies (GAINS)
model (Markus et al., 2011; Zheng et al., 2016) along with an agent-
based multi-level model called ENGAGE (Gerst et al., 2013), general
equilibrium model of a dynamic multi-region (Wei et al., 2016),
trans-log production model (Yang et al., 2017), and geographically
weighted regression model (Wang et al., 2019). Life-cycle
F. Xu, F. Cui and N. Xiang
assessment is also widely used to evaluate the environmental
impact of emission reduction technologies (Feng et al., 2014;
Hacatoglu et al., 2015; Shi et al., 2017). Despite the ability to analyse
the current situation, research using these models is mainly
focussed on data statistics, which leads to models that lack pre-
dictability for further breakthrough in dynamic studies. The other is
for future development prediction and dynamic evolution research,
such as the environment-economic-energy (3E) dynamic system
(Li et al., 2019; Al Irsyad et al., 2019), recursive dynamic CGE (Bollen
and Brink, 2014; Zhu et al., 2019), and dynamic factorisation models
(Zhang et al., 2018c). Input-output modelling is a commonly used
method for analysing industrial structure trends and its impact on
economy and environment (Xu et al., 2017). These proposed
methods can effectively predict the development direction more
scientifically, and the results obtained are closer to reality. How-
ever, in view of the requirement of this paper, these models still
have limitations e.g. not consider technical factors into 3E system,
not combining environment system together with input-output
economic system, and making it difficult to provide a practical
basis for comprehensive green transformation. Therefore the
research methods in this paper need to be further improved (on the
basis of existing methods) to fill the research gaps.
Overall, there is little research on economic transformation and
green development, especially for iron and steel cities. Only a few
scholars can break through the integrated framework while
considering the economic transformation and environmental
improvement in steel cities based on dynamic simulation from the
perspective of the coordination of the 3E system. Further, techno-
logical investment and cost reduction that can improve the trade-
off between the environment and economic development must
be explored.
In this study, we aim to surmount the shortcomings of previous
studies by analysing environmental policy and technology together.
This study explores an innovative research method that integrates
system dynamics model, dynamic linear programming model, and
input-output model to establish a green economy transformation
decision-making modelling and simulation approach for dominant
iron and steel-manufacturing regions. Thus, this research contrib-
utes to the novelty of the methodology and the practicality of green
transformation of iron and steel cities.
3. Research methodology
This study adopted a system dynamics theory to describe the
coupling mechanism of the 3E system. Additionally, the economic
input-output theory was utilised to construct a green economy
transformation decision-making model based on the mechanism of
Tangshan’s social economy and atmospheric environment.
Furthermore, the dynamic linear optimisation programming
method was utilised to realise the model simulation.
Model construction was completed through the following steps.
First, the major problems, contradictions, and variables in the sys-
tem were identified and evaluated. The input-output theory forms
the core driving force for the economic system, links the environ-
mental, energy, and technological factors within one system, and
systematically describes the value, energy, and material flow bal-
ances in the process of economic operation, social life, technolog-
ical input, energy consumption, and pollutant generation in the
research area. The system boundary and endogenous and exoge-
nous variables were determined at this stage. Second, the feedback
mechanism of the system was analysed and the system hierarchy,
the relationship between variables, and the feedback mechanism
between the systems were determined. Next, we designed pa-
rameters and equations; the relationship of the main variables was
determined to establish our model. Finally, a model simulation was
3
Journal of Cleaner Production xxx (xxxx) xxx
conducted. Note that the model was modified according to the
results of the policy analysis, and that evaluations and examina-
tions were executed at any preferred time during the process. The
results offer relevant feedback for determining the optimal path
and policy for the balanced development of Tangshan’s economy
and environment.
3.1. Model formulation
The green economy transformation decision-making model
connects the economic production life activity and the atmospheric
(environmental) pollutant emissions (from anthropological sour-
ces) according to the system dynamics principle. Regarding social
economy, industrial production and social life activities consume
energy and discharge atmospheric pollutants into the environment.
The abbreviations in the figure are explained in the model
introduction section below.
A model framework is shown in Fig. 1. As the foundation of
economic development, industry production contributions GRP,
while it is subject to input-output constraints. When energy is
consumed by industrial and residents’ activities, polluting gases are
discharged into the atmosphere. However, the total pollutant
emissions are constrained by the bearing capacity of the natural
environment. Environmental capacity can be enlarged by industrial
structure optimized adjustment and technology cost reduction,
thereby promoting the development of social economy.
3.2. Objective function
Regarding the intensified economic and environmental conflict,
economic slowdown and pressure for environmental improvement
requires a solution that not only focuses on economic development
but also the emission of air pollutants and environmental condi-
tions. Therefore, in this study, we used different policies, namely
“economic maximisation” and “total pollutant emission mini-
misation”, as research goals. The objective functions are:
X 1
MAX GRPðtÞ; (1)
（1 þ r）t1
where GRPðtÞ is gross regional production of Tangshan in t year
(en), r is the social discount rate (0.05, average value of interest
rates of loans from 2006 to 2015 in China; ex). Here, “en” is the
abbreviation for endogenous and “ex” is the abbreviation for
exogenous;
MIN EP NOX ðtÞ; (2)
MIN EP SO2 ðtÞ; (3)
where EP NOX ðtÞ and EP SO2 ðtÞ are total amount of NOX and SO2
emission in Tangshan in t year (en).
3.3. Constraint of social economy, energy, and the environment
The GRP of Tangshan is mainly contributed to by industry, where
the value added of each industry is equal to the product of its total
output value multiplied by the value-added rate, calculated by
following equations:
X
11
GRPðtÞ ¼ grpði; tÞ; (4)
i¼1
F. Xu, F. Cui and N. Xiang Journal of Cleaner Production xxx (xxxx) xxx

Fig. 1. Model framework.

grpði; tÞ ¼ IVAðiÞ  xnði; tÞ; (5) X

11
EDðtÞ ¼ ecðiÞ  xnði; tÞ; (7)
i¼1
where grpði; tÞ is the value added of i industry in Tangshan in year t
(en). xnði; tÞ is the output value in Tangshan in year t (en). IVAðiÞ is
the value added rate of i industry (ex). Here, i represent the 11 ESðtÞ  EDðtÞ; (8)
major industries in Tangshan in this study. (i ¼ 1: Agriculture,
forestry, husbandry, fishery and their service industries; i ¼ 2: where EDðtÞ is the total energy demand for social production in
Metal smelting and rolling industry; i ¼ 3: Mining; i ¼ 4: Equip- Tangshan in t year (en). ecðiÞ is energy consumption intensity of i
ment manufacturing; i ¼ 5 Chemical industry; i ¼ 6: Non-metallic industry (ex). ESðtÞ is total energy supply for social production in
mineral products; i ¼ 7: Production and supply of electricity, heat, Tangshan in t year (ex).
gas and water; i ¼ 8: Other manufacturing; i ¼ 9: Construction; Air pollutant production is mainly caused by industrial pro-
i ¼ 10: Transportation, warehousing and postal services; i ¼ 11: duction and residential living. Regarding relevant policy objectives
Services). and environmental statistics, herein, we only consider the total
According to the input-output theory and law of economic emissions of NOX and SO2. For pollutants produced by industries,
operation, the production and consumption in a social economy due to the differences between industries, the pollutant emission
must meet an input-output balance, namely, intensity per unit output value of different industries is also
different. Therefore, a relationship between the total output value
and the pollutant emission intensity per unit output value, namely,
xnði; tÞ  A  xnði; tÞ þ tcði; tÞ þ gcf ði; tÞ þ exði; tÞ  imði; tÞ; (6) the pollutant emission coefficient, is established. The total pollutant
emissions of each product sector are calculated. As the pollutants
where xnði; tÞ is the total output value of i industry in Tangshan in t
caused by residents are related to the population, the total resident
year (en). A is the input coefficient (ex). The input-output coeffi-
pollutant emissions is multiplied by the pollutant quality per unit
cient and value added rate is shown in the Appendix 1. tcði; tÞ is the
population, namely,
total consumption in Tangshan in t year (en). gcf ði; tÞ is the gross
capital formation of i industry in Tangshan in t year (en). exði; tÞ is
X
11
the total export of i industry in Tangshan in t year (en). imði; tÞ is the EP NOX ðtÞ ¼ ef NOX ðiÞ  xnði; tÞ þ RðtÞ  ref NOX ; (9)
total import of i industry in Tangshan in t year (en). i¼1
Though all industry consumes energy during development, the
intensity of energy consumption varies between industries. In this
X
11
study, the total energy demand is calculated by connecting the EP SO2 ðtÞ ¼ ef SO2 ðiÞ  xnði; tÞ þ RðtÞ  ref SO2 ; (10)
energy consumption intensity with the industry output value. i¼1
Further, the total energy demand is restricted by the total energy
supply, namely, where ef NOX ðiÞ is NOX emission factor of i industry (ex). ref NOX is
4
F. Xu, F. Cui and N. Xiang
NOX resident emission factor (ex). ef SO2 ðiÞ is SO2 emission factor of i
industry (ex). ref SO2 is SO2 resident emission factor (ex). RðtÞ is the
resident population in Tangshan in t year (en). The emission coef-
ficient is shown in the Appendix 2.
The average population growth rate is calculated based on the
permanent population in 2016 and the natural population growth
rate of Tangshan in the past 10 years, namely,
RðtÞ ¼ ð1 þ ezÞ  Rðt  1Þ; (11)
where ez is annual population growth rate of Tangshan (ex).
In the technology input model, the capital amount of technology
input is related to the output value of the industry for the current
year. Here, the concepts of technology investment rate and tech-
nology operation costs are introduced, and pollutant emission
reduction caused by technology investment is calculated using
statistical data and technical literature data. The calculation is
based on the following equations:
. mentation paths were proposed.
PRNOX ði; tÞ  knNOX ði; tÞ CONOX ; (12)
.
SO2 SO2
PR ði; tÞ  kn ði; tÞ COSO2 ; (13)
where PRNOX ði; tÞ is the NOX pollutant reduction of i industry in
Tangshan in t year (en). PRSO2 ði; tÞ is the SO2 pollutant reduction of i
industry in Tangshan in t year (en). knNOX ði; tÞ is the investment
amount of NOX treatment technology in i industry in Tangshan city
(en). knSO2 ði; tÞ is the investment amount of SO2 treatment tech-
nology in i industry in Tangshan city (en). CONOX is the operating
cost of NOX treatment technology for disposing unit NOX in Tang-
shan (ex). COSO2 is the operating cost of SO2 treatment technology
for disposing unit SO2 in Tangshan (ex).
3.4. Data sources and parameter setting
In this model, input data are initial data in base year 2016 and
the exogenous parameters; and endogenous indicator values can be
predicted by using simulation. The model basis is an input-output
table of Tangshan in 2016. It was compiled based on the input-
output theory and the Hebei input-output Table in 2012. Based
on the data of the Statistical Yearbook of Tangshan, the direct
consumption coefficient matrix and the value-added rate of each
sector were calculated using the 2016 data. Additionally, the in-
termediate and final consumptions, and the value added were
summarised and integrated to complete this input-output table
(see Appendix 1). The emission coefficient of pollutants in each
industry was calculated by dividing the total emissions of NOX and
SO2 by the total output value of each industry (see Appendix 2). The
technology investment and operating cost data were derived from
the environmental statistics of Tangshan and the results of previous
research. The average annual operating cost was 1750 CNY/ton SO2
and 7780 CNY/ton (Shi, 2015) NOX. These values were introduced
into the model as exogenous variables to explore the degree of
economic and environmental impacts of technology.
3.5. Scenario setting
According to the goals of economic development and environ-
mental improvement, this study focuses on:
(1) Tangshan’s industrial structure adjustment sufficiency for
reducing pollution;
5
Journal of Cleaner Production xxx (xxxx) xxx
(2) the contribution of industrial structure adjustment with new
technology investment;
(3) the contribution of technology introduction to economic
growth, and the marginal cost effect if technological progress
reduces the cost of emission reduction technologies.
With these aims, we designed three different scenarios to
conduct in-depth exploration (see Table 1).
4. Simulation results analysis and discussion
Based on the constructed green economy transformation
decision-making model, a simulation was conducted using Linear
Interactive and General Optimizer (LINGO) software to simulate the
dynamic development of Tangshan’s economy and environment.
The evolution law of economic development and environmental
improvement under different scenarios were analysed and
compared, and consequently, development direction and imple-
4.1. Model verification and sensitive analysis
A dynamic simulation was performed to verify the sensitivity of
the model using the business as usual scenario (BAU), wherein the
current level of economic development, industrial structure, and
pollution control is maintained.
As shown in Fig. 2, compared with the detailed official data in
2017, the simulation results show that, except for the gap of the
primary industry, the gross products of the secondary and tertiary
industries are very close to reality, with difference in the total GRP
at less than 3%. Further, the GRP of Tangshan in 2018 and 2019 is
695.5 billion CNY and 689.0 billion CNY, respectively, and the
simulation results are similar at 690.8 billion CNY and 683.62
billion CNY, respectively.
As the simulation results are highly consistent with the real
data, the accuracy of the green economy transformation decision-
making model and reliability of the prediction value of scenario
simulation from 2020 to 2025 can be confirmed.
4.2. Comparison of current technology investment scenario (CTI)
and BAU
Building off the BAU, technology investment is introduced in
sectors with high emission coefficients, including metal smelting
and rolling, chemical, non-metallic mineral products, production,
and supply of electricity, heat, gas and water, in the CTI scenario.
The economy simulation results for both the BAU and CTI are
shown in Fig. 3. Here, one can see that technology investment plays
an important role in promoting the coordination of economic
growth and atmospheric environmental protection in steel cities.
If the current level of economic development is maintained, the
GRP of Tangshan will realise only 763 billion CNY by 2025, which is
a 19.8% increase compared with 2016, and results in an average
annual growth rate of less than 2%, which makes it difficult to meet
the economic growth target of Tangshan, and is similar to related
research findings (Guan et al., 2018). However, if new emission
reduction technologies are added to industries with high emission
intensity, the GRP of Tangshan can reach 880.65 billion CNY by
2025, with an increase rate of 38.0% compared with 2016, dis-
playing significantly improved economic development.
In Fig. 4, air pollutant emissions in the BAU and CTI are further
compared. It is clear that the introduction of technology investment
can both realise economic growth and control the discharge of
pollutants effectively. This can be verified with both real data and
previous research conclusions (Xiang et al., 2015; Wei et al., 2016).
F. Xu, F. Cui and N. Xiang Journal of Cleaner Production xxx (xxxx) xxx

Table 1
Scenario setting.

Setting Scenarios

Business as Usual Scenario (BAU) Current Technology Investment Scenario Technology Improvement Scenario (TIS)
(CTI)

Industrial structure Production adjust in range Free adjustment Free adjustment

of 5% ~ 8%
Cost of air pollution reduction \ 1750 CNY/ton SO2 Decreases at a rate of 5% ~ 25%
technology 7780 CNY/ton NOX
Economic development Annual GRP growth rate No limitation No limitation
5%
Investment in technologies No Extra 2 billion CNY in 5 years at most since Extra 2 billion CNY in 5 years at most since
2020 2020
Pollutant emissions by 2025 No limitation Decrease  22% in 2020, Decrease  22% in 2020,
No rebound after 2020 No rebound after 2020

Note: The 2020 pollutants control target parameters are derived from the government’s planning report.

Fig. 2. Comparison between business as usual scenario (BAU) simulation and actual data.

Compared to emissions in the base year, 2016, the pollutant emis-
sions were reduced beginning in 2021 in both scenarios, and the CTI
emission value was lower. By 2025, SO2 emissions are predicted to
be 114,056 tons and 102,883 tons, respectively, and NOX emissions
are 116,162 tons and 104,748 tons, respectively, for the BAU and CTI.
Therefore, introducing technology investment could reduce the
total emissions of these pollutants by 9.80% and 9.83%, respectively,
verifying that the addition of new technology clearly plays a posi-
tive role in pollutant emission reduction (Feng et al., 2014; Li et al.,
2019).
In order to ensure that Tangshan can achieve the current
emission reduction targets, the industrial structure must be
significantly adjusted (Fig. 5). The metal smelting and rolling,
mining, and chemical industry outputs are predicted to decline
by 29.3%, 4.6%, and 66.4%, respectively, over 10 years for the
CTI. Meanwhile, industries with low emission coefficients,
including equipment manufacturing, other manufacturing,
construction, transportation, warehousing, postal services, and the
service industry, maintain a positive development trend. Among
them, the growth rate of the service industry is more than 110%.
By comparing the results of the BAU and CTI, it can be seen that
the development of every industry, except the chemical industry,
was improved at a varying degree as a result of the introduction of
new technologies. This change is especially obvious in the heavy
industry sector, where the trend changes from a decline to an
incline. An annual increasing rate of 5.5% can be achieved in steel
industry since 2020. The results also reflect that after the intro-
duction of technology, technical resources will be relatively in-
clined to be allocated to the steel industry. At the same time, under
the constraint of the input-output balance, other industries will
develop synchronously. This verified the steel industries can
develop further, together with industrial structure adjustment and
pollution control technology improvements to pursue sustainable
development.

6
F. Xu, F. Cui and N. Xiang Journal of Cleaner Production xxx (xxxx) xxx

Fig. 3. Economy simulation results in BAU and CTI.

Fig. 4. Pollutant discharge simulation results in BAU and CTI.

4.3. Technology cost reduction impacts analysis of technology
improvement scenario (TIS) scenario
In the model developed herein, the investment effect of a new
technology is closely related to its own operating cost. Therefore, as
the development of society progresses, technology cost will grad-
ually reduce (Xu et al., 2017; Zhang et al., 2018c). This cost change
may become the key factor that affects the results of this model.
Therefore, in order to explore the impact and elasticity of emission
reduction costs on the social economy and pollutant reduction of

7
F. Xu, F. Cui and N. Xiang
Fig. 5. Simulation results of industrial restructure from 2016 to 2025 years in BAU and CTI.
Tangshan, the parameters of technology cost were adjusted and a
simulation was carried out repeatedly for the TIS scenario. The
future development direction of Tangshan under the possibility of
lower-cost technology was also predicted.
Elasticity reflects the effect of declining technology cost on the
rise of the GRP. The calculation is based on the following equations:
EEE ¼ dTGRP%=dTc%;
dTGRP% ¼ ðTGRP  TGRP * Þ=TGRP * ;
X
10
TGRP ¼ GRPðtÞ;
t¼6
where EEE is the economic elasticity effect of the decline of tech-
nology cost reduction (en), dTGRP% is the change rate of total GRP
(en), dTc% is the change rate of total technical cost, which is simu-
lated at 5%, 10%, 15%, 20%, and 25% (en), TGRP is the total GRP 5 years
after technological investment (en), and TGRP * is the total GRP 5
years after technological investment in the CTI (en).
Using the technology in the CTI as a base, the TIS simulated the
condition when the cost of desulfurisation and denitrification
technology decreased by 5%, 10%, 15%, 20%, and 25%. The elastic
curves shown in Fig. 6 demonstrate the effect of cost change on
technology investment. The Y axis represents the cost reduction
effect elasticity, where a larger elasticity means a larger overall
economic benefit or better pollutant reduction. Initially, the elas-
ticity increases as cost falls, peaking when the cost falls by 15%. The
economic and environmental effect elasticity of both economy and
pollutant reduction present a reverse U trend, demonstrating that
the reduction of technological cost will have a positive effect on the
development of Tangshan, and will be optimal when the cost re-
duces by approximately 15%.
Journal of Cleaner Production xxx (xxxx) xxx
The production incentive effects on pollutant intensive in-
dustries are shown in Fig. 6. With the decrease of technology cost,
the output values of industries with high pollution coefficients will
increase in 2025 compared with those in the CTI. In particular,
metal smelting and casting industries will continue to increase the
output value with the decline of emission reduction cost. For non-
metallic mineral products and the chemical industry, when the cost
(14) reduction changes from 10% to 15%, their output values begin to
rise.
Here, the decline of technology cost could promote the devel-
(15) opment of steel and resource intensive industries, thereby
increasing their output value. This result also matches the best
elasticity when the reduced cost rate is 15%, which has the most
(16) obvious driving effect on the whole industry. Therefore, it is logical
to set the overall cost control target at 15%. If lower-cost technology
is developed, it will be best to insert it into the steel industry to
control the technology cost and improve the development pros-
pects of all industries in steel cities.
5. Conclusions
Steel-manufacturing cities face challenges regarding their slow
economic development and increasing pressure for protecting their
environment from local and international stakeholders. Despite
some experts who suggest the dissolution of the steel industry in
the capital region of China, this study provides a new method to
estimate the steel industry’s green transformation potential in the
study area, which is the largest steel production city in China. Using
Tangshan as an example, this study executes a quantitative analysis
of the optimisation path of the steel city’s economic green trans-
formation. The coupling mechanism of the economy and the
environment is explored using current social, economic, and at-
mospheric environmental data analyses. Integrating the theories of
system dynamics, input-output, and dynamic multi-objective
8
F. Xu, F. Cui and N. Xiang
Fig. 6. Elastic curves of the effect on technology investment by technology cost change.
planning, we constructed a green economy transformation
decision-making model.
The results prove that the realisation of a pollutant emission
reduction target under the current situation will lead to economic
stagnation and will hamper the development of a majority of in-
dustries. To improve both the economy and environment, pro-
moting clean production, offering subsidies for technological
improvements, and changing the industrial structure are critical.
However, steel and resource-intensive industries can still experi-
ence an increase in the production during the adjustment process.
This study further discusses the effect of introducing technology;
we found that, in addition to its own environmental impact, due to
its inherent impact on the industrial structure, the overall trade-off
between economic growth and environmental protection will
improve over time. Furthermore, a technology cost reduction of 15%
provides the highest economic elasticity, implying that this is the
largest overall economic benefit brought about by per unit cost
reduction per unit. This estimation demonstrates that it is feasible
to simultaneously continue to develop steel-related industries and
improve the air quality while continuously achieving economic
growth.
This study has both theoretical and managerial implications.
Few studies have focussed on the green transformation of steel
cities. Therefore, the main innovation of this study is that the
technology penetrates the economic, environmental, and energy
systems to develop a model for the field of technology evaluation
on the basis of the current 3E model. Moreover, the impact of cost
reduction of technology on the economy and environment can be
further clarified. Dynamic optimisation simulations with different
development routes, technological and development goals, eco-
nomic development trends, environmental improvements, and
industrial structure changes in the Tangshan city were predicted to
explore the sustainable development path for industrialised cities.
Compared with previous studies, this study has achieved a more
comprehensive display of the specific effects and future develop-
ment trends caused by changes in various factors using scientific,
9
Journal of Cleaner Production xxx (xxxx) xxx
integrative, and predictive methods. Practically, optimal green
transformation paths can be provided. These results can provide a
scientific decision-making foundation for other steel-centric cities
similar to Tangshan to guide them in adjusting their industrial
structure, introducing technology investment, and upgrading
technology costs within an effective interval. Because of Tangshan’s
typicality, the implications obtained from the study are valuable in
steel cities all over the world, for the contradiction of economic and
environment existed in most steel cities globally. .
One shortcoming of this study is that the detailed technology
selection and energy structure adjustment effects were not ana-
lysed; therefore, it did not produce a specific technology selection
scheme, or energy structure optimisation measures. These contents
will be further discussed in future studies.
CRediT authorship contribution statement
Feng Xu: Conceptualization, Methodology, Software, Writing -
original draft. Fushang Cui: Investigation, Visualization, Data
curation, Writing - original draft. Nan Xiang: Supervision, Valida-
tion, Writing - review & editing, Funding acquisition.
Declaration of competing Interest
The authors declare that they have no known competing
financial interests or personal relationships that could have
appeared to influence the work reported in this paper.
Acknowledgements
We would like to specially thank reviewers for their helpful
comments in this paper. This research was funded by National
Natural Science Foundation of China [Grant Number. 41701635],
Beijing Young Scientists’ Supporting Grant [Grant Number.
2017000020124G187], Fundamental Research Funds for the Central
Universities [Grant Number. BUCTRC201804], Beijing University of
F. Xu, F. Cui and N. Xiang
Chemical Technology Fund for Disciplines Construction and
Development [Grant Number. XK1802-5].
Appendix A. Supplementary data
Supplementary data to this article can be found online at
https://doi.org/10.1016/j.jclepro.2020.124643.
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