IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v99y2016icp4-11.html
   My bibliography  Save this article

The design of renewable support schemes and CO2 emissions in China

Author

Listed:
  • Wu, Jie
  • Albrecht, Johan
  • Fan, Ying
  • Xia, Yan

Abstract

The renewable energy targets put forward by the Chinese government need comprehensive incentive schemes. This paper uses a multi-regional CGE model to evaluate two types of renewable support schemes; a subsidy scheme like a feed-in tariff (FIT) with a direct price impact for final consumers and a subsidy scheme without any price impact. We assess the CO2 consequences of both approaches, as well as their impact on economic activity in terms of GDP, industrial structure, electricity generation structure, and regional final demand elasticities of electricity. We find that a support scheme with price impact is much more effective in reducing CO2 emissions while the difference in GDP between the two policies is small. We estimate that the price implications of the support scheme allow for an additional emissions reduction of 113 Mt CO2—or 0.07% of total emissions—in China during 2020–2035. The support scheme with a price impact does not lead to a negative impact on the Chinese economy although there are significant differences among regions. In addition, while the whole country faces an approximately unitary electricity elasticity demand, we find significant differences in electricity demand elasticities among Chinese regions.

Suggested Citation

  • Wu, Jie & Albrecht, Johan & Fan, Ying & Xia, Yan, 2016. "The design of renewable support schemes and CO2 emissions in China," Energy Policy, Elsevier, vol. 99(C), pages 4-11.
    • Handle: RePEc:eee:enepol:v:99:y:2016:i:c:p:4-11
    DOI: 10.1016/j.enpol.2016.09.045
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421516305122
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2016.09.045?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. Ouyang, Xiaoling & Lin, Boqiang, 2014. "Levelized cost of electricity (LCOE) of renewable energies and required subsidies in China," Energy Policy, Elsevier, vol. 70(C), pages 64-73.
    2. Abdmouleh, Zeineb & Alammari, Rashid A.M. & Gastli, Adel, 2015. "Review of policies encouraging renewable energy integration & best practices," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 249-262.
    3. Cho, Seolhee & Kim, Jiyong, 2015. "Feasibility and impact analysis of a renewable energy source (RES)-based energy system in Korea," Energy, Elsevier, vol. 85(C), pages 317-328.
    4. Langni, Ole & Diekmann, Jochen & Lehr, Ulrike, 2009. "Advanced mechanisms for the promotion of renewable energy--Models for the future evolution of the German Renewable Energy Act," Energy Policy, Elsevier, vol. 37(4), pages 1289-1297, April.
    5. Burtt, D. & Dargusch, P., 2015. "The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions," Applied Energy, Elsevier, vol. 148(C), pages 439-448.
    6. Couture, Toby & Gagnon, Yves, 2010. "An analysis of feed-in tariff remuneration models: Implications for renewable energy investment," Energy Policy, Elsevier, vol. 38(2), pages 955-965, February.
    7. Timilsina, Govinda R. & Landis, Florian, 2014. "Economics of transiting to renewable energy in Morocco : a general equilibrium analysis," Policy Research Working Paper Series 6940, The World Bank.
    8. Fan, Ying & Wu, Jie & Xia, Yan & Liu, Jing-Yu, 2016. "How will a nationwide carbon market affect regional economies and efficiency of CO2 emission reduction in China?," China Economic Review, Elsevier, vol. 38(C), pages 151-166.
    9. He, Yongxiu & Pang, Yuexia & Zhang, Jixiang & Xia, Tian & Zhang, Ting, 2015. "Feed-in tariff mechanisms for large-scale wind power in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 9-17.
    10. del Río, Pablo, 2012. "The dynamic efficiency of feed-in tariffs: The impact of different design elements," Energy Policy, Elsevier, vol. 41(C), pages 139-151.
    11. Albrecht, Johan & Laleman, Ruben & Vulsteke, Elien, 2015. "Balancing demand-pull and supply-push measures to support renewable electricity in Europe," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 267-277.
    12. Christoph Böhringer & Manuela Behrens, 2015. "Interactions of emission caps and renewable electricity support schemes," Journal of Regulatory Economics, Springer, vol. 48(1), pages 74-96, August.
    13. Zifa Liu & Wenhua Zhang & Changhong Zhao & Jiahai Yuan, 2015. "The Economics of Wind Power in China and Policy Implications," Energies, MDPI, vol. 8(2), pages 1-18, February.
    14. Lesser, Jonathan A. & Su, Xuejuan, 2008. "Design of an economically efficient feed-in tariff structure for renewable energy development," Energy Policy, Elsevier, vol. 36(3), pages 981-990, March.
    15. de la Hoz, Jordi & Martín, Helena & Ballart, Jordi & Monjo, Lluis, 2014. "Evaluating the approach to reduce the overrun cost of grid connected PV systems for the Spanish electricity sector: Performance analysis of the period 2010–2012," Applied Energy, Elsevier, vol. 121(C), pages 159-173.
    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, Aijun & Peng, Dan & Wang, Daoping & Yao, Xin, 2017. "Comparing regional effects of climate policies to promote non-fossil fuels in China," Energy, Elsevier, vol. 141(C), pages 1998-2012.
    2. Wei, Weixian & Zhao, Yurong & Wang, Jianlin & Song, Malin, 2019. "The environmental benefits and economic impacts of Fit-in-Tariff in China," Renewable Energy, Elsevier, vol. 133(C), pages 401-410.
    3. Jie Wu & Ying Fan & Yan Xia, 2017. "How Can China Achieve Its Nationally Determined Contribution Targets Combining Emissions Trading Scheme and Renewable Energy Policies?," Energies, MDPI, vol. 10(8), pages 1-20, August.
    4. Florentina Paraschiv & Hannah Schmid & Marten Schmitz & Vivian Dünwald & Emma Groos, 2024. "The Interplay Between China’s Regulated and Voluntary Carbon Markets and Its Influence on Renewable Energy Development—A Literature Review," Energies, MDPI, vol. 17(22), pages 1-23, November.
    5. Demetriou, E. & Hadjistassou, C., 2021. "Can China decarbonize its electricity sector?," Energy Policy, Elsevier, vol. 148(PB).
    6. Wei Wei & Ling He & Xiaofan Li & Qi Cui & Hao Chen, 2022. "The Effectiveness and Trade-Offs of Renewable Energy Policies in Achieving the Dual Decarbonization Goals in China: A Dynamic Computable General Equilibrium Analysis," IJERPH, MDPI, vol. 19(11), pages 1-18, May.
    7. Lu, Yuehong & Zhang, Xiao-Ping & Li, Jianing & Huang, Zhijia & Wang, Changlong & Luo, Liang, 2019. "Design of a reward-penalty cost for the promotion of net-zero energy buildings," Energy, Elsevier, vol. 180(C), pages 36-49.
    8. Wenyang Huang & Huiwen Wang & Yigang Wei, 2018. "Endogenous or Exogenous? Examining Trans-Boundary Air Pollution by Using the Air Quality Index (AQI): A Case Study of 30 Provinces and Autonomous Regions in China," Sustainability, MDPI, vol. 10(11), pages 1-20, November.
    9. Liang, Yuanyuan & Yu, Biying & Wang, Lu, 2019. "Costs and benefits of renewable energy development in China's power industry," Renewable Energy, Elsevier, vol. 131(C), pages 700-712.
    10. Li, Wei & Lu, Can & Zhang, Yan-Wu, 2019. "Prospective exploration of future renewable portfolio standard schemes in China via a multi-sector CGE model," Energy Policy, Elsevier, vol. 128(C), pages 45-56.
    11. Yuan, Rong & Rodrigues, João F.D. & Tukker, Arnold & Behrens, Paul, 2018. "The impact of the expansion in non-fossil electricity infrastructure on China’s carbon emissions," Applied Energy, Elsevier, vol. 228(C), pages 1994-2008.
    12. Yuehong Lu & Zafar A. Khan & Manuel S. Alvarez-Alvarado & Yang Zhang & Zhijia Huang & Muhammad Imran, 2020. "A Critical Review of Sustainable Energy Policies for the Promotion of Renewable Energy Sources," Sustainability, MDPI, vol. 12(12), pages 1-31, June.

    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. Romano, Antonio A. & Scandurra, Giuseppe & Carfora, Alfonso & Fodor, Mate, 2017. "Renewable investments: The impact of green policies in developing and developed countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 738-747.
    2. La Monaca, Sarah & Ryan, Lisa, 2017. "Solar PV where the sun doesn’t shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling," Energy Policy, Elsevier, vol. 108(C), pages 731-741.
    3. Chen, Hao & Gao, Xin-Ya & Liu, Jian-Yu & Zhang, Qian & Yu, Shiwei & Kang, Jia-Ning & Yan, Rui & Wei, Yi-Ming, 2020. "The grid parity analysis of onshore wind power in China: A system cost perspective," Renewable Energy, Elsevier, vol. 148(C), pages 22-30.
    4. de la Hoz, Jordi & Martín, Helena & Miret, Jaume & Castilla, Miguel & Guzman, Ramon, 2016. "Evaluating the 2014 retroactive regulatory framework applied to the grid connected PV systems in Spain," Applied Energy, Elsevier, vol. 170(C), pages 329-344.
    5. Narbel, Patrick A., 2014. "Rethinking how to support intermittent renewables," Discussion Papers 2014/17, Norwegian School of Economics, Department of Business and Management Science.
    6. Zipp, Alexander, 2017. "The marketability of variable renewable energy in liberalized electricity markets – An empirical analysis," Renewable Energy, Elsevier, vol. 113(C), pages 1111-1121.
    7. Aquila, Giancarlo & Pamplona, Edson de Oliveira & Queiroz, Anderson Rodrigo de & Rotela Junior, Paulo & Fonseca, Marcelo Nunes, 2017. "An overview of incentive policies for the expansion of renewable energy generation in electricity power systems and the Brazilian experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1090-1098.
    8. Narbel, Patrick A., 2014. "Rethinking how to support intermittent renewables," Energy, Elsevier, vol. 77(C), pages 414-421.
    9. Buckman, Greg & Sibley, Jon & Ward, Megan, 2019. "The large-scale feed-in tariff reverse auction scheme in the Australian Capital Territory 2012, to 2016," Renewable Energy, Elsevier, vol. 132(C), pages 176-185.
    10. Tolliver, Clarence & Keeley, Alexander Ryota & Managi, Shunsuke, 2020. "Policy targets behind green bonds for renewable energy: Do climate commitments matter?," Technological Forecasting and Social Change, Elsevier, vol. 157(C).
    11. Punda, Luka & Capuder, Tomislav & Pandžić, Hrvoje & Delimar, Marko, 2017. "Integration of renewable energy sources in southeast Europe: A review of incentive mechanisms and feasibility of investments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 77-88.
    12. Wild, Phillip, 2017. "Determining commercially viable two-way and one-way ‘Contract-for-Difference’ strike prices and revenue receipts," Energy Policy, Elsevier, vol. 110(C), pages 191-201.
    13. Tu, Qiang & Betz, Regina & Mo, Jianlei & Fan, Ying, 2019. "The profitability of onshore wind and solar PV power projects in China - A comparative study," Energy Policy, Elsevier, vol. 132(C), pages 404-417.
    14. Sakah, Marriette & Diawuo, Felix Amankwah & Katzenbach, Rolf & Gyamfi, Samuel, 2017. "Towards a sustainable electrification in Ghana: A review of renewable energy deployment policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 544-557.
    15. Ghorashi, Amir Hossein & Maranlou, Hadi, 2021. "Essential infrastructures and relevant policies for renewable energy developments in oil-rich developing countries: Case of Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    16. Martin, Nigel J. & Rice, John L., 2017. "Examining the use of concept analysis and mapping software for renewable energy feed-in tariff design," Renewable Energy, Elsevier, vol. 113(C), pages 211-220.
    17. Tu, Qiang & Betz, Regina & Mo, Jianlei & Fan, Ying & Liu, Yu, 2019. "Achieving grid parity of wind power in China – Present levelized cost of electricity and future evolution," Applied Energy, Elsevier, vol. 250(C), pages 1053-1064.
    18. Burtt, D. & Dargusch, P., 2015. "The cost-effectiveness of household photovoltaic systems in reducing greenhouse gas emissions in Australia: Linking subsidies with emission reductions," Applied Energy, Elsevier, vol. 148(C), pages 439-448.
    19. William Hongsong Wang & Victor I. Espinosa & Jesús Huerta de Soto, 2022. "A Free-Market Environmentalist Enquiry on Spain’s Energy Transition along with Its Recent Increasing Electricity Prices," IJERPH, MDPI, vol. 19(15), pages 1-34, August.
    20. Reinhard Madlener & Weiyu Gao & Ilja Neustadt & Peter Zweifel, 2008. "Promoting renewable electricity generation in imperfect markets: price vs. quantity policies," SOI - Working Papers 0809, Socioeconomic Institute - University of Zurich.

    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:99:y:2016:i:c:p:4-11. 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.