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Effects of carbon and environmental tax on power mix planning - A case study of Hebei Province, China

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  • Wang, B.
  • Liu, L.
  • Huang, G.H.
  • Li, W.
  • Xie, Y.L.

Abstract

The growing energy crisis and severe atmospheric pollution have put much pressure on the Chinese government and resulted in a lot of revolutionary changes. Considering the upcoming new environmental and carbon tax, how would the tax reform affect the power sector; which types and how much of the different power generation technologies would be added are important questions that need to be answered by decision makers. In this study, a deterministic optimization model is proposed for determining the optimal power mix through the introduction of environmental and carbon taxes. A case study of Hebei Province in China is provided to illustrate the effects of these two taxes. The capacity additions of different generation technologies, air pollutants and CO2 emission amounts, system costs, and regional power security under different tax levels are profoundly examined. The modeling results indicate that such tax policies could significantly improve to the power mix adjustment as well as the quality of the ambient air quality. Higher tax levels would promote the development of renewable power generation. Meanwhile, different degrees of CO2 and air pollutant emission reduction can be achieved. The modeling results could help the decision makers identify the satisfactory tax levels in the future.

Suggested Citation

  • Wang, B. & Liu, L. & Huang, G.H. & Li, W. & Xie, Y.L., 2018. "Effects of carbon and environmental tax on power mix planning - A case study of Hebei Province, China," Energy, Elsevier, vol. 143(C), pages 645-657.
    • Handle: RePEc:eee:energy:v:143:y:2018:i:c:p:645-657
    DOI: 10.1016/j.energy.2017.11.025
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    7. Yunfei An & Dequn Zhou & Qunwei Wang, 2022. "Carbon emission reduction potential and its influencing factors in China’s coal-fired power industry: a cost optimization and decomposition analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 3619-3639, March.
    8. Karmaker, Shamal Chandra & Hosan, Shahadat & Chapman, Andrew J. & Saha, Bidyut Baran, 2021. "The role of environmental taxes on technological innovation," Energy, Elsevier, vol. 232(C).
    9. Lin, Boqiang & Jia, Zhijie, 2019. "How does tax system on energy industries affect energy demand, CO2 emissions, and economy in China?," Energy Economics, Elsevier, vol. 84(C).
    10. Xie, Li & Zhou, Zhichao & Hui, Shimin, 2022. "Does environmental regulation improve the structure of power generation technology? Evidence from China's pilot policy on the carbon emissions trading market(CETM)," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    11. Wu, C.B. & Guan, P.B. & Zhong, L.N. & Lv, J. & Hu, X.F. & Huang, G.H. & Li, C.C., 2020. "An optimized low-carbon production planning model for power industry in coal-dependent regions - A case study of Shandong, China," Energy, Elsevier, vol. 192(C).
    12. Xiaomin Zhao & Jiahui Li & Yang Li, 2022. "Impact of Environmental Tax on Corporate Sustainable Performance: Insights from High-Tech Firms in China," IJERPH, MDPI, vol. 20(1), pages 1-13, December.
    13. Pinglin He & Jing Ning & Zhongfu Yu & Hao Xiong & Huayu Shen & Hui Jin, 2019. "Can Environmental Tax Policy Really Help to Reduce Pollutant Emissions? An Empirical Study of a Panel ARDL Model Based on OECD Countries and China," Sustainability, MDPI, vol. 11(16), pages 1-32, August.
    14. Bartolini, Andrea & Mazzoni, Stefano & Comodi, Gabriele & Romagnoli, Alessandro, 2021. "Impact of carbon pricing on distributed energy systems planning," Applied Energy, Elsevier, vol. 301(C).
    15. Scott, Ian J. & Botterud, Audun & Carvalho, Pedro M.S. & Silva, Carlos A. Santos, 2020. "Renewable energy support policy evaluation: The role of long-term uncertainty in market modelling," Applied Energy, Elsevier, vol. 278(C).
    16. Wei, Yongmei & Ye, Qi & Ding, Yihong & Ai, Bingjun & Tan, Qinliang & Song, Wenda, 2021. "Optimization model of a thermal-solar-wind power planning considering economic and social benefits," Energy, Elsevier, vol. 222(C).
    17. Atherton, John & Xie, Wanni & Aditya, Leonardus Kevin & Zhou, Xiaochi & Karmakar, Gourab & Akroyd, Jethro & Mosbach, Sebastian & Lim, Mei Qi & Kraft, Markus, 2021. "How does a carbon tax affect Britain’s power generation composition?," Applied Energy, Elsevier, vol. 298(C).
    18. Anh Huu Nguyen & Thinh Gia Hoang & Duy Thanh Nguyen & Loan Quynh Thi Nguyen & Duong Thuy Doan, 2023. "The Development of Green Bond in Developing Countries: Insights from Southeast Asia Market Participants," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(1), pages 196-218, February.

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