IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v177y2023ics0301421523001283.html
   My bibliography  Save this article

The rebound effect of decarbonization in China’s power sector under the carbon trading scheme

Author

Listed:
  • Li, Guohao
  • Niu, Miaomiao
  • Xiao, Jin
  • Wu, Jiaqian
  • Li, Jinkai

Abstract

China mainly promotes economic decarbonization through the carbon trading scheme (ETS) at this stage. The power sector is the most critical in this process. ETS can promote decarbonization in the power sector, but due to the rebound effect, the actual decarbonization effect may not be as expected. This study systematically investigates the rebound effect of decarbonization in China’s power sector under ETS using an almost ideal demand system (AIDS) model and simulation analysis method. The results show that the implementation of ETS had a partial rebound effect on decarbonization in China’s power sector, with magnitudes ranging from 0.186 to 0.866. Furthermore, this study found a strong correlation between the rebound effect and carbon prices; specifically, the lower the carbon price, the greater the rebound effect. Finally, the rebound effect of decarbonization in China’s power sector under ETS is dominated by the indirect rebound effect. These findings suggest that policymakers should consider the rebound effect when formulating or improving policies related to the decarbonization of China’s power sector and assessing the effectiveness of the current ETS. Moreover, taking steps to increase carbon prices would help mitigate the rebound effect.

Suggested Citation

  • Li, Guohao & Niu, Miaomiao & Xiao, Jin & Wu, Jiaqian & Li, Jinkai, 2023. "The rebound effect of decarbonization in China’s power sector under the carbon trading scheme," Energy Policy, Elsevier, vol. 177(C).
    • Handle: RePEc:eee:enepol:v:177:y:2023:i:c:s0301421523001283
    DOI: 10.1016/j.enpol.2023.113543
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421523001283
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2023.113543?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Brookes, Len, 1990. "The greenhouse effect: the fallacies in the energy efficiency solution," Energy Policy, Elsevier, vol. 18(2), pages 199-201, March.
    2. Li, Ke & Zhang, Ning & Liu, Yanchu, 2016. "The energy rebound effects across China’s industrial sectors: An output distance function approach," Applied Energy, Elsevier, vol. 184(C), pages 1165-1175.
    3. Lin, Boqiang & Liu, Xia, 2013. "Electricity tariff reform and rebound effect of residential electricity consumption in China," Energy, Elsevier, vol. 59(C), pages 240-247.
    4. Chen, Zhenni & Du, Huibin & Li, Jianglong & Southworth, Frank & Ma, Shoufeng, 2019. "Achieving low-carbon urban passenger transport in China: Insights from the heterogeneous rebound effect," Energy Economics, Elsevier, vol. 81(C), pages 1029-1041.
    5. Chen, Qian & Zha, Donglan & Wang, Lijun & Yang, Guanglei, 2022. "The direct CO2 rebound effect in households: Evidence from China's provinces," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    6. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
    7. Freire-González, Jaume & Ho, Mun S., 2022. "Policy strategies to tackle rebound effects: A comparative analysis," Ecological Economics, Elsevier, vol. 193(C).
    8. Chen, Qian & Zha, Donglan & Salman, Muhammad, 2022. "The influence of carbon tax on CO2 rebound effect and welfare in Chinese households," Energy Policy, Elsevier, vol. 168(C).
    9. Brannlund, Runar & Ghalwash, Tarek & Nordstrom, Jonas, 2007. "Increased energy efficiency and the rebound effect: Effects on consumption and emissions," Energy Economics, Elsevier, vol. 29(1), pages 1-17, January.
    10. Kerui Du & Shuai Shao & Zheming Yan, 2021. "Urban Residential Energy Demand and Rebound Effect in China: A Stochastic Energy Demand Frontier Approach," The Energy Journal, , vol. 42(4), pages 175-194, July.
    11. Yang, Lisha & Li, Jianglong, 2017. "Rebound effect in China: Evidence from the power generation sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 53-62.
    12. Yuan, Zhen & Xu, Jie & Li, Bing & Yao, Tingting, 2022. "Limits of technological progress in controlling energy consumption: Evidence from the energy rebound effects across China's industrial sector," Energy, Elsevier, vol. 245(C).
    13. Cristina Peñasco & Laura Díaz Anadón & Elena Verdolini, 2021. "Author Correction: Systematic review of the outcomes and trade-offs of ten types of decarbonization policy instruments," Nature Climate Change, Nature, vol. 11(3), pages 274-274, March.
    14. Yang, Lisha & Li, Zhi, 2017. "Technology advance and the carbon dioxide emission in China – Empirical research based on the rebound effect," Energy Policy, Elsevier, vol. 101(C), pages 150-161.
    15. Xiao, Jin & Li, Guohao & Xie, Ling & Wang, Shouyang & Yu, Lean, 2021. "Decarbonizing China's power sector by 2030 with consideration of technological progress and cross-regional power transmission," Energy Policy, Elsevier, vol. 150(C).
    16. Cristina Peñasco & Laura Díaz Anadón & Elena Verdolini, 2021. "Systematic review of the outcomes and trade-offs of ten types of decarbonization policy instruments," Nature Climate Change, Nature, vol. 11(3), pages 257-265, March.
    17. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
    18. Frondel, Manuel & Ritter, Nolan & Vance, Colin, 2012. "Heterogeneity in the rebound effect: Further evidence for Germany," Energy Economics, Elsevier, vol. 34(2), pages 461-467.
    19. Jarke-Neuert, Johannes & Perino, Grischa, 2020. "Energy efficiency promotion backfires under cap-and-trade," Resource and Energy Economics, Elsevier, vol. 62(C).
    20. Wei, Wei & Mushtaq, Zulqarnain & Sharif, Maimoona & Zeng, Xiaowu & Wan-Li, Zhang & Qaisrani, Mumtaz A., 2020. "Evaluating the coal rebound effect in energy intensive industries of China," Energy, Elsevier, vol. 207(C).
    21. Chai, Jian & Yang, Ying & Wang, Shouyang & Lai, Kin Keung, 2016. "Fuel efficiency and emission in China's road transport sector: Induced effect and rebound effect," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 188-197.
    22. Zhang, Yue-Jun & Peng, Hua-Rong, 2017. "Exploring the direct rebound effect of residential electricity consumption: An empirical study in China," Applied Energy, Elsevier, vol. 196(C), pages 132-141.
    23. Wang, Zhaohua & Han, Bai & Lu, Milin, 2016. "Measurement of energy rebound effect in households: Evidence from residential electricity consumption in Beijing, China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 852-861.
    24. Mizobuchi, Kenichi, 2008. "An empirical study on the rebound effect considering capital costs," Energy Economics, Elsevier, vol. 30(5), pages 2486-2516, September.
    25. Chen, Zhe & Song, Pei & Wang, Baolu, 2021. "Carbon emissions trading scheme, energy efficiency and rebound effect – Evidence from China's provincial data," Energy Policy, Elsevier, vol. 157(C).
    26. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 21-40.
    27. Orea, Luis & Llorca, Manuel & Filippini, Massimo, 2015. "A new approach to measuring the rebound effect associated to energy efficiency improvements: An application to the US residential energy demand," Energy Economics, Elsevier, vol. 49(C), pages 599-609.
    28. Bingxin Zeng & Jun Xie & Xiaobing Zhang & Yang Yu & Lei Zhu, 2020. "The impacts of emission trading scheme on China’s thermal power industry: A pre-evaluation from the micro level," Energy & Environment, , vol. 31(6), pages 1007-1030, September.
    29. Moshiri, Saeed & Aliyev, Kamil, 2017. "Rebound effect of efficiency improvement in passenger cars on gasoline consumption in Canada," Ecological Economics, Elsevier, vol. 131(C), pages 330-341.
    30. Saunders, Harry D., 2008. "Fuel conserving (and using) production functions," Energy Economics, Elsevier, vol. 30(5), pages 2184-2235, September.
    31. Lin, Boqiang & Chen, Yufang & Zhang, Guoliang, 2017. "Technological progress and rebound effect in China's nonferrous metals industry: An empirical study," Energy Policy, Elsevier, vol. 109(C), pages 520-529.
    32. Rocha, Felipe Freitas da & Almeida, Edmar Luiz Fagundes de, 2021. "A general equilibrium model of macroeconomic rebound effect: A broader view," Energy Economics, Elsevier, vol. 98(C).
    33. Hu, Yucai & Ren, Shenggang & Wang, Yangjie & Chen, Xiaohong, 2020. "Can carbon emission trading scheme achieve energy conservation and emission reduction? Evidence from the industrial sector in China," Energy Economics, Elsevier, vol. 85(C).
    34. Font Vivanco, David & McDowall, Will & Freire-González, Jaume & Kemp, René & van der Voet, Ester, 2016. "The foundations of the environmental rebound effect and its contribution towards a general framework," Ecological Economics, Elsevier, vol. 125(C), pages 60-69.
    35. Zhang, Yue-Jun & Peng, Hua-Rong & Su, Bin, 2017. "Energy rebound effect in China's Industry: An aggregate and disaggregate analysis," Energy Economics, Elsevier, vol. 61(C), pages 199-208.
    36. Zhang, Yue-Jun & Liu, Zhao & Qin, Chang-Xiong & Tan, Tai-De, 2017. "The direct and indirect CO2 rebound effect for private cars in China," Energy Policy, Elsevier, vol. 100(C), pages 149-161.
    37. Craglia, Matteo & Cullen, Jonathan, 2020. "Do vehicle efficiency improvements lead to energy savings? The rebound effect in Great Britain," Energy Economics, Elsevier, vol. 88(C).
    38. Belaïd, Fateh & Bakaloglou, Salomé & Roubaud, David, 2018. "Direct rebound effect of residential gas demand: Empirical evidence from France," Energy Policy, Elsevier, vol. 115(C), pages 23-31.
    39. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    40. Berkhout, Peter H. G. & Muskens, Jos C. & W. Velthuijsen, Jan, 2000. "Defining the rebound effect," Energy Policy, Elsevier, vol. 28(6-7), pages 425-432, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li Shang & Qun Shen & Xuehang Song & Weisheng Yu & Nannan Sun & Wei Wei, 2023. "Impacts Analysis of Dual Carbon Target on the Medium- and Long-Term Petroleum Products Demand in China," Energies, MDPI, vol. 16(8), pages 1-19, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jin, Taeyoung & Kim, Jinsoo, 2019. "A new approach for assessing the macroeconomic growth energy rebound effect," Applied Energy, Elsevier, vol. 239(C), pages 192-200.
    2. Ouyang, Xiaoling & Yang, Yuchuan & Du, Kerui & Cheng, Zhenyu, 2022. "How does residential electricity consumption respond to electricity efficiency improvement? Evidence from 287 prefecture-level cities in China," Energy Policy, Elsevier, vol. 171(C).
    3. Lin, Boqiang & Zhu, Penghu, 2021. "Measurement of the direct rebound effect of residential electricity consumption: An empirical study based on the China family panel studies," Applied Energy, Elsevier, vol. 301(C).
    4. Thomas, Brinda A. & Azevedo, Inês L., 2013. "Estimating direct and indirect rebound effects for U.S. households with input–output analysis Part 1: Theoretical framework," Ecological Economics, Elsevier, vol. 86(C), pages 199-210.
    5. Figge, Frank & Thorpe, Andrea Stevenson, 2019. "The symbiotic rebound effect in the circular economy," Ecological Economics, Elsevier, vol. 163(C), pages 61-69.
    6. Du, Qiang & Han, Xiao & Li, Yi & Li, Zhe & Xia, Bo & Guo, Xiqian, 2021. "The energy rebound effect of residential buildings: Evidence from urban and rural areas in China," Energy Policy, Elsevier, vol. 153(C).
    7. Wen, Fenghua & Ye, Zhengke & Yang, Huaidong & Li, Ke, 2018. "Exploring the rebound effect from the perspective of household: An analysis of China's provincial level," Energy Economics, Elsevier, vol. 75(C), pages 345-356.
    8. Jarke-Neuert, Johannes & Perino, Grischa, 2020. "Energy efficiency promotion backfires under cap-and-trade," Resource and Energy Economics, Elsevier, vol. 62(C).
    9. Kong, Li & Hu, Guangwen & Mu, Xianzhong & Li, Guohao & Zhang, Zheng, 2023. "The energy rebound effect in households: Evidence from urban and rural areas in Beijing," Applied Energy, Elsevier, vol. 343(C).
    10. Chen, Qian & Zha, Donglan & Wang, Lijun & Yang, Guanglei, 2022. "The direct CO2 rebound effect in households: Evidence from China's provinces," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    11. Jafari, Mahboubeh & Stern, David I. & Bruns, Stephan B., 2022. "How large is the economy-wide rebound effect in middle income countries? Evidence from Iran," Ecological Economics, Elsevier, vol. 193(C).
    12. Chen, Zhenni & Du, Huibin & Li, Jianglong & Southworth, Frank & Ma, Shoufeng, 2019. "Achieving low-carbon urban passenger transport in China: Insights from the heterogeneous rebound effect," Energy Economics, Elsevier, vol. 81(C), pages 1029-1041.
    13. Zhang, Yue-Jun & Liu, Zhao & Qin, Chang-Xiong & Tan, Tai-De, 2017. "The direct and indirect CO2 rebound effect for private cars in China," Energy Policy, Elsevier, vol. 100(C), pages 149-161.
    14. Lin, Boqiang & Liu, Xia, 2013. "Reform of refined oil product pricing mechanism and energy rebound effect for passenger transportation in China," Energy Policy, Elsevier, vol. 57(C), pages 329-337.
    15. Martín Bordon Lesme & Jaume Freire-González & Emilio Padilla Rosa, 2020. "The Direct Rebound Effect of Electricity Energy Services in Spanish Households: Evidence from Error Correction Model and System GMM estimates," Working Papers wpdea2002, Department of Applied Economics at Universitat Autonoma of Barcelona.
    16. Shi, Jian-hua & Han, Ying & Li, Xue-dong & Zhou, Jie-qi, 2022. "How does urbanization affect the direct rebound effect? Evidence from residential electricity consumption in China," Energy, Elsevier, vol. 239(PE).
    17. Orea, Luis & Llorca, Manuel & Filippini, Massimo, 2015. "A new approach to measuring the rebound effect associated to energy efficiency improvements: An application to the US residential energy demand," Energy Economics, Elsevier, vol. 49(C), pages 599-609.
    18. Belaïd, Fateh & Youssef, Adel Ben & Lazaric, Nathalie, 2020. "Scrutinizing the direct rebound effect for French households using quantile regression and data from an original survey," Ecological Economics, Elsevier, vol. 176(C).
    19. Milin Lu & Zhaohua Wang, 2017. "Rebound effects for residential electricity use in urban China: an aggregation analysis based E-I-O and scenario simulation," Annals of Operations Research, Springer, vol. 255(1), pages 525-546, August.
    20. Rongxin Wu & Boqiang Lin, 2022. "Does Energy Efficiency Realize Energy Conservation in the Iron and Steel Industry? A Perspective of Energy Rebound Effect," IJERPH, MDPI, vol. 19(18), pages 1-20, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:177:y:2023:i:c:s0301421523001283. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.