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Economic evaluation of environmental externalities in China’s coal-fired power generation

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  • Zhao, Xiaoli
  • Cai, Qiong
  • Ma, Chunbo
  • Hu, Yanan
  • Luo, Kaiyan
  • Li, William

Abstract

Serious environmental externalities exist in China’s power industry. Environmental economics theory suggests that the evaluation of environmental externality is the basis of designing an efficient regulation. The purposes of this study are: (1) to identify Chinese respondents’ preferences for green development of electric power industry and the socio-economic characteristics behind them; (2) to investigate the different attitudes of the respondents towards pollution and CO2 reduction; (3) to quantitatively evaluate the environmental cost of China’s coal-fired power generation. Based on the method of choice experiments (CE) and the 411 questionnaires with 2466 data points, we found that Chinese respondents prefer PM2.5, SO2 and NOx reduction to CO2 reduction and that the environment cost of coal-fired power plants in China is 0.30 yuan per kWh. In addition, we found that the socio-economic characteristics of income, education, gender, and environmental awareness have significant impacts on respondents’ choices. These findings indicate that the environmental cost of coal-fired power generation is a significant factor that requires great consideration in the formulation of electric power development policies. In addition, importance should also be attached to the implementation of green power price policy and enhancement of environmental protection awareness.

Suggested Citation

  • Zhao, Xiaoli & Cai, Qiong & Ma, Chunbo & Hu, Yanan & Luo, Kaiyan & Li, William, 2017. "Economic evaluation of environmental externalities in China’s coal-fired power generation," Energy Policy, Elsevier, vol. 102(C), pages 307-317.
    • Handle: RePEc:eee:enepol:v:102:y:2017:i:c:p:307-317
    DOI: 10.1016/j.enpol.2016.12.030
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    3. Sun, Jingqi & Ruze, Nuermaimaiti & Zhang, Jianjun & Shi, Jing & Shen, Boyang, 2021. "Capacity planning and optimization for integrated energy system in industrial park considering environmental externalities," Renewable Energy, Elsevier, vol. 167(C), pages 56-65.
    4. Zhang, Ning & Jiang, Xue-Feng, 2019. "The effect of environmental policy on Chinese firm's green productivity and shadow price: A metafrontier input distance function approach," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 129-136.
    5. Ma, Shao-Chao & Xu, Jin-Hua & Fan, Ying, 2019. "Willingness to pay and preferences for alternative incentives to EV purchase subsidies: An empirical study in China," Energy Economics, Elsevier, vol. 81(C), pages 197-215.
    6. Xinghua Wang & Shunchen Wu & Xiaojuan Qin & Meixiang La & Haixia Zuo, 2022. "Informal Environment Regulation, Green Technology Innovation and Air Pollution: Quasi-Natural Experiments from Prefectural Cities in China," Sustainability, MDPI, vol. 14(10), pages 1-13, May.
    7. Sergi, Brian & Azevedo, Inês & Xia, Tian & Davis, Alex & Xu, Jianhua, 2019. "Support for Emissions Reductions Based on Immediate and Long-term Pollution Exposure in China," Ecological Economics, Elsevier, vol. 158(C), pages 26-33.
    8. Liu, Yunqiang & Zhu, Jialing & Li, Eldon Y. & Meng, Zhiyi & Song, Yan, 2020. "Environmental regulation, green technological innovation, and eco-efficiency: The case of Yangtze river economic belt in China," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    9. Tan-Soo, Jie-Sheng & Qin, Ping & Zhang, Xiao-Bing, 2018. "Power stations emissions externalities from avoidance behaviors towards air pollution: Evidence from Beijing," Energy Policy, Elsevier, vol. 121(C), pages 336-345.
    10. Anh T. Hoang & Tuyen V. Nguyen & Bao T. Nguyen, 2022. "The Experimental Evaluation of Energy Efficiency and Carbonic Emission Rates for All Stable Loads of Larger-Scale (+600 MW) Coal-Fired Power Generation Units in Vietnam," Energies, MDPI, vol. 15(6), pages 1-11, March.
    11. Guo, Hongye & Chen, Qixin & Xia, Qing & Kang, Chongqing, 2018. "Market equilibrium analysis with high penetration of renewables and gas-fired generation: An empirical case of the Beijing-Tianjin-Tangshan power system," Applied Energy, Elsevier, vol. 227(C), pages 384-392.

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