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The impact of China's differential electricity pricing policy on power sector CO2 emissions

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  • Hu, Junfeng
  • Kahrl, Fredrich
  • Yan, Qingyou
  • Wang, Xiaoya

Abstract

This article investigates the impact of China's differential electricity pricing policy on power sector CO2 emissions using the logarithmic mean divisia index method. The differential pricing policy, intended to reduce energy intensity in manufacturing, is being implemented in eight electricity-intensive industries. The study finds that, during 2004–2009, the policy accounted for a drop of roughly 115TWh in electricity use, which amounted to a reduction of 82 million tons of CO2 emissions. The policy has been most effective in reducing electricity use in the nonferrous metal smelting and rolling industry, and least effective in the ferrous metal smelting and rolling industry. Because the differential pricing policy has had significantly different effects across industries, improving the policy's design and implementation going forward will require a more detailed understanding and analysis of how it can be better tailored to individual industries.

Suggested Citation

  • Hu, Junfeng & Kahrl, Fredrich & Yan, Qingyou & Wang, Xiaoya, 2012. "The impact of China's differential electricity pricing policy on power sector CO2 emissions," Energy Policy, Elsevier, vol. 45(C), pages 412-419.
    • Handle: RePEc:eee:enepol:v:45:y:2012:i:c:p:412-419
    DOI: 10.1016/j.enpol.2012.02.049
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    Cited by:

    1. Lin Zhao, 2023. "The impact of China's Differential Electricity Pricing policy on fossil fuel consumption," International Studies of Economics, John Wiley & Sons, vol. 18(1), pages 97-119, March.
    2. Li, Qiang & Zhang, Wenjuan & Li, Huiquan & He, Peng, 2017. "CO2 emission trends of China's primary aluminum industry: A scenario analysis using system dynamics model," Energy Policy, Elsevier, vol. 105(C), pages 225-235.
    3. Bilgili, Faik & Mugaloglu, Erhan & Koçak, Emrah, 2018. "The impact of oil prices on CO2 emissions in China: A Wavelet coherence approach," MPRA Paper 90170, University Library of Munich, Germany.
    4. Chen, Xia & Wang, Li & Tong, Lige & Sun, Shufeng & Yue, Xianfang & Yin, Shaowu & Zheng, Lifang, 2013. "Energy saving and emission reduction of China's urban district heating," Energy Policy, Elsevier, vol. 55(C), pages 677-682.
    5. Lin Zhu & Lichun He & Peipei Shang & Yingchun Zhang & Xiaojun Ma, 2018. "Influencing Factors and Scenario Forecasts of Carbon Emissions of the Chinese Power Industry: Based on a Generalized Divisia Index Model and Monte Carlo Simulation," Energies, MDPI, vol. 11(9), pages 1-26, September.
    6. Zhou, Kaile & Yang, Shanlin & Shen, Chao & Ding, Shuai & Sun, Chaoping, 2015. "Energy conservation and emission reduction of China’s electric power industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 10-19.
    7. Zheng, Xuemei & Wu, Chengkuan & He, Shijun, 2021. "Impacts of China's differential electricity pricing on the productivity of energy-intensive industries," Energy Economics, Elsevier, vol. 94(C).
    8. Haibing Wang & Bowen Li & Muhammad Qasim Khan, 2022. "Prediction of Shanghai Electric Power Carbon Emissions Based on Improved STIRPAT Model," Sustainability, MDPI, vol. 14(20), pages 1-15, October.
    9. Yang, Mian & Yuan, Yining & Sun, Chuanwang, 2021. "The economic impacts of China's differential electricity pricing policy: Evidence from energy-intensive firms in Hunan Province," Energy Economics, Elsevier, vol. 94(C).
    10. Li, Xing & Liu, Zimin & Wu, Honglei & Yang, Dan, 2024. "Calculation and optimization of China's power distortion under carbon peaking target," Energy, Elsevier, vol. 306(C).
    11. Wang, Li & Zhang, Xin-Hua & Zhang, Yue-Jun, 2023. "Designing the pricing mechanism of residents’ self-selection sales electricity based on household size," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 860-878.
    12. Liu, Nan & Ma, Zujun & Kang, Jidong, 2017. "A regional analysis of carbon intensities of electricity generation in China," Energy Economics, Elsevier, vol. 67(C), pages 268-277.
    13. Lo, Kevin, 2014. "A critical review of China's rapidly developing renewable energy and energy efficiency policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 508-516.
    14. Zhang, Pan & Wang, Huan, 2022. "Do provincial energy policies and energy intensity targets help reduce CO2 emissions? Evidence from China," Energy, Elsevier, vol. 245(C).
    15. Gung, Roger R. & Huang, Chun-Che & Hung, Wen-I & Fang, Yu-Jie, 2020. "The use of hybrid analytics to establish effective strategies for household energy conservation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    16. Qu, Jianying & Li, Ke & Ye, Ze & Shao, Shuai, 2022. "The impact of differential power pricing policy on firm productivity in China: Evidence from iron and steel firms," Journal of Asian Economics, Elsevier, vol. 80(C).

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