Analysis of the Relative Price in China’s Energy Market for Reducing the Emissions from Consumption

As a developing country, extensive carbon and sulfur emissions are associated with China’s rapid social and economic development. Chief among them are the emissions from coal and oil consumption. This paper focuses on the demand side, attempting to regulate the range of relative price of oil to coal at the consumption level. Through the adjustment of the relative price, the goal of reducing the emissions of carbon and sulfur could be achieved in the market of energy consumption. Data regression is applied to investigate the functional relationship between emissions and energy prices. The results indicate that when the coal price is less than 300, the higher relative price leads to less carbon and sulfur emissions; when the coal price is more than 300 and less than 500, there exists an optimal relative price which has the least carbon emissions, and this value is not more than 11.5; when the coal price is more than 500, the smaller relative price is beneficial to decline carbon and sulfur emissions. The changed trend of relative price-sulfur emissions is very similar to relative price-carbon emissions. Compared to the present energy situation in China, the relative price of oil to coal still need to be reduced especially when coal price is more than 500.