IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v85y2023ipbs0301420723006396.html
   My bibliography  Save this article

How to design subsidy policies for clean energy projects? A study on “coal-to-gas” project in China

Author

Listed:
  • Zhang, Ruining
  • Ai, Xianneng
  • Li, Hui

Abstract

The “coal-to-gas” project is a major initiative in China to optimize the energy structure and promote the transition to clean energy in the residential sector. Assessing the effects of subsidy policies is conducive in promoting the “coal-to-gas” project sustainably. This study takes Cangzhou as an example and uses Changzhi, Zibo, Luoyang, Tongchuan, and Tianjin as supplements to evaluate different subsidy policies of the “coal-to-gas” project in northern China in 2015–2035 based on cost-estimation and system dynamic method. The key findings are as follows. First, increasing the proportion of initial installation subsidy reduces the local government burden by up to 0.5%–4.1%, but it may increase residents' burden by up to 1.6%–2.8% between 2015 and 2022. Besides, the impact of different initial installation subsidy policies on government burden and residents' burden is so slight that can be ignored. In addition, gradually reducing operating subsidies at an even rate each year is more effective in decreasing the local government burden compared to abrupt reductionsin recent years. Finally, energy-saving buildings and natural gas furnaces can significantly alleviate the local government burden by up to 1.45% and 0.47% respectively, and reduce residents’ burden by up to 1.47% and 0.53% respectively. These findings provide valuable insights for designing subsidy policies for the “coal-to-gas” project and other energy transition initiavtives.

Suggested Citation

  • Zhang, Ruining & Ai, Xianneng & Li, Hui, 2023. "How to design subsidy policies for clean energy projects? A study on “coal-to-gas” project in China," Resources Policy, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723006396
    DOI: 10.1016/j.resourpol.2023.103928
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723006396
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.103928?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. Liu, Hongxun & Mauzerall, Denise L., 2020. "Costs of clean heating in China: Evidence from rural households in the Beijing-Tianjin-Hebei region," Energy Economics, Elsevier, vol. 90(C).
    2. Wang, Qunwei & Zhou, Bo & Zhang, Cheng & Zhou, Dequn, 2021. "Do energy subsidies reduce fiscal and household non-energy expenditures? A regional heterogeneity assessment on coal-to-gas program in China," Energy Policy, Elsevier, vol. 155(C).
    3. Eric Scheier & Noah Kittner, 2022. "A measurement strategy to address disparities across household energy burdens," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    4. Movilla, Santiago & Miguel, Luis J. & Blázquez, L. Felipe, 2013. "A system dynamics approach for the photovoltaic energy market in Spain¤," Energy Policy, Elsevier, vol. 60(C), pages 142-154.
    5. Yan, Yutong & Jiao, Wenxian & Wang, Kang & Huang, Yatao & Chen, Jingyang & Han, Qingfeng, 2020. "Coal-to-gas heating compensation standard and willingness to make clean energy choices in typical rural areas of northern China," Energy Policy, Elsevier, vol. 145(C).
    6. Li, Junchen & Dong, Xiucheng & Shangguan, Jianxin & Hook, Mikael, 2011. "Forecasting the growth of China’s natural gas consumption," Energy, Elsevier, vol. 36(3), pages 1380-1385.
    7. Chi, K.C. & Reiner, D.M. & Nuttall, W.J., 2009. "Dynamics of the UK Natural Gas Industry: System Dynamics Modelling and Long-Term Energy Policy Analysis," Cambridge Working Papers in Economics 0922, Faculty of Economics, University of Cambridge.
    8. Lu, Chao & Liu, Hu-Chen & Tao, Jie & Rong, Ke & Hsieh, Ying-Che, 2017. "A key stakeholder-based financial subsidy stimulation for Chinese EV industrialization: A system dynamics simulation," Technological Forecasting and Social Change, Elsevier, vol. 118(C), pages 1-14.
    9. Wang, Huiqing & Wei, Weixian, 2020. "Coordinating technological progress and environmental regulation in CO2 mitigation: The optimal levels for OECD countries & emerging economies," Energy Economics, Elsevier, vol. 87(C).
    10. Feng, Tong & Du, Huibin & Coffman, D'Maris & Qu, Aiyu & Dong, Zhanfeng, 2021. "Clean heating and heating poverty: A perspective based on cost-benefit analysis," Energy Policy, Elsevier, vol. 152(C).
    11. Christopher Barrington-Leigh & Jill Baumgartner & Ellison Carter & Brian E. Robinson & Shu Tao & Yuanxun Zhang, 2019. "An evaluation of air quality, home heating and well-being under Beijing’s programme to eliminate household coal use," Nature Energy, Nature, vol. 4(5), pages 416-423, May.
    12. Xu, Shuo & Ge, Jianping, 2020. "Sustainable shifting from coal to gas in North China: An analysis of resident satisfaction," Energy Policy, Elsevier, vol. 138(C).
    13. Ye, Rui-Ke & Gao, Zhuang-Fei & Fang, Kai & Liu, Kang-Li & Chen, Jia-Wei, 2021. "Moving from subsidy stimulation to endogenous development: A system dynamics analysis of China's NEVs in the post-subsidy era," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    14. Ansari, Nastaran & Seifi, Abbas, 2012. "A system dynamics analysis of energy consumption and corrective policies in Iranian iron and steel industry," Energy, Elsevier, vol. 43(1), pages 334-343.
    15. Jay W. Forrester, 1968. "Industrial Dynamics--After the First Decade," Management Science, INFORMS, vol. 14(7), pages 398-415, March.
    16. Gong, Yuanchao & Cai, Bo-feng & Sun, Yan, 2020. "Perceived fiscal subsidy predicts rural residential acceptance of clean heating: Evidence from an indoor-survey in a pilot city in China," Energy Policy, Elsevier, vol. 144(C).
    17. Shafiei, Ehsan & Davidsdottir, Brynhildur & Fazeli, Reza & Leaver, Jonathan & Stefansson, Hlynur & Asgeirsson, Eyjolfur Ingi, 2018. "Macroeconomic effects of fiscal incentives to promote electric vehicles in Iceland: Implications for government and consumer costs," Energy Policy, Elsevier, vol. 114(C), pages 431-443.
    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. Deng, Youyi & Dong, Kangyin, 2024. "How does the coal-to-gas policy mitigate carbon emissions? The role of fintech development," Resources Policy, Elsevier, vol. 89(C).

    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. Li, Hui & Zhang, Ruining & Ai, Xianneng, 2022. "Cost estimation of “coal-to-gas” project: Government and residents’ perspectives," Energy Policy, Elsevier, vol. 167(C).
    2. Wu, Desheng & Xie, Yu & Liu, Dingjie, 2023. "Rethinking the complex effects of the clean energy transition on air pollution abatement: Evidence from China's coal-to-gas policy," Energy, Elsevier, vol. 283(C).
    3. Chen, Si-Yuan & Xue, Meng-Tian & Wang, Zhao-Hua & Tian, Xin & Zhang, Bin, 2022. "Exploring pathways of phasing out clean heating subsidies for rural residential buildings in China," Energy Economics, Elsevier, vol. 116(C).
    4. Armin Leopold, 2016. "Energy related system dynamic models: a literature review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 231-261, March.
    5. Abada, Ibrahim & Briat, Vincent & Massol, Olivier, 2013. "Construction of a fuel demand function portraying interfuel substitution, a system dynamics approach," Energy, Elsevier, vol. 49(C), pages 240-251.
    6. Nie, Yazhou & Deng, Mengsi & Shan, Ming & Yang, Xudong, 2023. "Clean and low-carbon heating in the building sector of China: 10-Year development review and policy implications," Energy Policy, Elsevier, vol. 179(C).
    7. Jing Li & Lingling Song & Yanchun Zhu, 2020. "Subsidies, Clean Heating Choices, and Policy Costs: Evidence from Rural Households in Northern China," Sustainability, MDPI, vol. 13(1), pages 1-18, December.
    8. Xiaoyang Hou & Shuai Zhong & Jian’an Zhao, 2022. "A Critical Review on Decarbonizing Heating in China: Pathway Exploration for Technology with Multi-Sector Applications," Energies, MDPI, vol. 15(3), pages 1-23, February.
    9. Wu Xie & Chen Chen & Fangyi Li & Bofeng Cai & Ranran Yang & Libin Cao & Pengcheng Wu & Lingyun Pang, 2021. "Key Factors of Rural Households’ Willingness to Pay for Cleaner Heating in Hebi: A Case Study in Northern China," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
    10. Fan, Shengyue & Zha, Shuai & Zhao, Chenxi & Sizheng, Fangyuan & Li, Meihui, 2022. "Using energy vulnerability to measure distributive injustice in rural heating energy reform: A case study of natural gas replacing bulk coal for heating in Gaocheng District, Hebei Province, China," Ecological Economics, Elsevier, vol. 197(C).
    11. Luo, Xi & Gao, Yaru & Liu, Xiaojun & Sun, Yongkai & Li, Na & Liu, Jianghua, 2023. "ACHRA: A novel model to study the propagation of clean heating acceptance among rural residents based on social networks," Applied Energy, Elsevier, vol. 333(C).
    12. Li, Meng & Jin, Tianyu & Liu, Shenglong & Zhou, Shaojie, 2021. "The cost of clean energy transition in rural China: Evidence based on marginal treatment effects," Energy Economics, Elsevier, vol. 97(C).
    13. Yuan, Meng & Vad Mathiesen, Brian & Schneider, Noémi & Xia, Jianjun & Zheng, Wen & Sorknæs, Peter & Lund, Henrik & Zhang, Lipeng, 2024. "Renewable energy and waste heat recovery in district heating systems in China: A systematic review," Energy, Elsevier, vol. 294(C).
    14. Li, Jingjing & Nian, Victor & Jiao, Jianling, 2022. "Diffusion and benefits evaluation of electric vehicles under policy interventions based on a multiagent system dynamics model," Applied Energy, Elsevier, vol. 309(C).
    15. Xingmin Liu & Beibei Qin & Yong Wu & Ran Zou & Qing Ye, 2021. "Study on Rural Residents’ Satisfaction with the Clean Energy Heating Program in Northern China—A Case Study of Shandong Province," Sustainability, MDPI, vol. 13(20), pages 1-16, October.
    16. Xiaopeng Guo & Yanan Wei & Jiahai Yuan, 2016. "Will the Steam Coal Price Rebound under the New Economy Normalcy in China?," Energies, MDPI, vol. 9(9), pages 1-13, September.
    17. Wang, Jianzhou & Jiang, Haiyan & Zhou, Qingping & Wu, Jie & Qin, Shanshan, 2016. "China’s natural gas production and consumption analysis based on the multicycle Hubbert model and rolling Grey model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1149-1167.
    18. Wang, Qunwei & Zhou, Bo & Zhang, Cheng & Zhou, Dequn, 2021. "Do energy subsidies reduce fiscal and household non-energy expenditures? A regional heterogeneity assessment on coal-to-gas program in China," Energy Policy, Elsevier, vol. 155(C).
    19. Li, Jiaman & Dong, Xiucheng & Jiang, Qingzhe & Dong, Kangyin & Liu, Guixian, 2021. "Natural gas trade network of countries and regions along the belt and road: Where to go in the future?," Resources Policy, Elsevier, vol. 71(C).
    20. Li, Yina & Liang, Chenchen & Ye, Fei & Zhao, Xiande, 2023. "Designing government subsidy schemes to promote the electric vehicle industry: A system dynamics model perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 167(C).

    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:jrpoli:v:85:y:2023:i:pb:s0301420723006396. 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/inca/30467 .

    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.