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Can electrification mitigate the marginal cost of carbon emission abatement? Evidence from China

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  • Chen, Hui
  • Wang, Yongqing

Abstract

Our study assesses the impact of China's electrification rate on the marginal cost of carbon emission abatement. Employing the linear econometric model with squared terms and the spatial Durbin model, we reveal an inverted U-shaped non-linear relationship between electrification and marginal abatement costs of the local and neighboring areas, with the turning point corresponding to an electrification rate of 31.34% and 19.60% respectively. In short, increased electrification helps mitigate marginal abatement costs. Moreover, we also observed that the differences in electricity supply and demand significantly affect the causal relationship between electrification and marginal abatement costs.

Suggested Citation

  • Chen, Hui & Wang, Yongqing, 2025. "Can electrification mitigate the marginal cost of carbon emission abatement? Evidence from China," Utilities Policy, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:juipol:v:93:y:2025:i:c:s0957178724001772
    DOI: 10.1016/j.jup.2024.101883
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    More about this item

    Keywords

    Electrification; Marginal abatement costs; Energy consumption structure;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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