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The Optimal Price Ratio of Typical Energy Sources in Beijing Based on the Computable General Equilibrium Model

Author

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  • Yongxiu He

    (School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Yangyang Liu

    (School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Tian Xia

    (School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Min Du

    (School of Economics and Management, North China Electric Power University, Beijing 102206, China)

  • Hongzhen Guo

    (School of Economics and Management, North China Electric Power University, Beijing 102206, China)

Abstract

In Beijing, China, the rational consumption of energy is affected by the insufficient linkage mechanism of the energy pricing system, the unreasonable price ratio and other issues. This paper combines the characteristics of Beijing’s energy market, putting forward the society-economy equilibrium indicator R maximization taking into consideration the mitigation cost to determine a reasonable price ratio range. Based on the computable general equilibrium (CGE) model, and dividing four kinds of energy sources into three groups, the impact of price fluctuations of electricity and natural gas on the Gross Domestic Product ( GDP ), Consumer Price Index ( CPI ), energy consumption and CO 2 and SO 2 emissions can be simulated for various scenarios. On this basis, the integrated effects of electricity and natural gas price shocks on the Beijing economy and environment can be calculated. The results show that relative to the coal prices, the electricity and natural gas prices in Beijing are currently below reasonable levels; the solution to these unreasonable energy price ratios should begin by improving the energy pricing mechanism, through means such as the establishment of a sound dynamic adjustment mechanism between regulated prices and market prices. This provides a new idea for exploring the rationality of energy price ratios in imperfect competitive energy markets.

Suggested Citation

  • Yongxiu He & Yangyang Liu & Tian Xia & Min Du & Hongzhen Guo, 2014. "The Optimal Price Ratio of Typical Energy Sources in Beijing Based on the Computable General Equilibrium Model," Energies, MDPI, vol. 7(5), pages 1-24, April.
    • Handle: RePEc:gam:jeners:v:7:y:2014:i:5:p:2961-2984:d:35653
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    References listed on IDEAS

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