IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v19y2022i11p6386-d823017.html
   My bibliography  Save this article

The Effectiveness and Trade-Offs of Renewable Energy Policies in Achieving the Dual Decarbonization Goals in China: A Dynamic Computable General Equilibrium Analysis

Author

Listed:
  • Wei Wei

    (Management Academy of China Cooperatives, Beijing 100028, China)

  • Ling He

    (School of Economics, Beijing Wuzi University, Beijing 101149, China)

  • Xiaofan Li

    (Beijing Key Lab of Study on Sci-Tech Strategy for Urban Green Development, School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China)

  • Qi Cui

    (Beijing Key Lab of Study on Sci-Tech Strategy for Urban Green Development, School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China)

  • Hao Chen

    (Beijing Key Lab of Study on Sci-Tech Strategy for Urban Green Development, School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China)

Abstract

China’s government has enforced a series of renewable energy policies to promote renewable energy development and achieve the dual decarbonization goals. However, there exists great disparity in previous studies on the effectiveness and suitability of renewable energy policies in abating carbon emissions. This study employs a dynamic general equilibrium model and assesses the effectiveness and trade-offs of renewable energy policies in achieving the dual decarbonization goals by 2060 in China. These policies include carbon market (CRP), the reduction of feed-in tariffs (FIT), the reduction of fossil fuel subsidies (FSB), the reduction of renewable energy costs (REC), resource taxes (RTX), and renewable portfolio standards (REP) as well as the mix of these policies. We find that renewable energy policies together could abate China’s CO 2 emissions in 2060 by 2.57 billion tons, but their effectiveness is very different. The REC would have the greatest effectiveness in abating CO 2 emissions, followed by REP and CRP. Renewable energy policies would cause relatively slight damage to China’s GDP, with the exception of the REC (raising GDP by 1.1713%). Regarding trade-offs, most policies will sacrifice China’s internal and external demand but benefit employment. Renewable energy policies will effectively promote the low-carbon transformation of China’s energy structure.

Suggested Citation

  • Wei Wei & Ling He & Xiaofan Li & Qi Cui & Hao Chen, 2022. "The Effectiveness and Trade-Offs of Renewable Energy Policies in Achieving the Dual Decarbonization Goals in China: A Dynamic Computable General Equilibrium Analysis," IJERPH, MDPI, vol. 19(11), pages 1-18, May.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:11:p:6386-:d:823017
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/19/11/6386/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/19/11/6386/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Li, Jianglong & Ho, Mun Sing, 2022. "Indirect cost of renewable energy: Insights from dispatching," Energy Economics, Elsevier, vol. 105(C).
    2. Wu, Jie & Albrecht, Johan & Fan, Ying & Xia, Yan, 2016. "The design of renewable support schemes and CO2 emissions in China," Energy Policy, Elsevier, vol. 99(C), pages 4-11.
    3. Schusser, Sandra & Jaraitė, Jūratė, 2018. "Explaining the interplay of three markets: Green certificates, carbon emissions and electricity," Energy Economics, Elsevier, vol. 71(C), pages 1-13.
    4. Zheng, Huanyu & Song, Malin & Shen, Zhiyang, 2021. "The evolution of renewable energy and its impact on carbon reduction in China," Energy, Elsevier, vol. 237(C).
    5. Khanna, Nina & Fridley, David & Zhou, Nan & Karali, Nihan & Zhang, Jingjing & Feng, Wei, 2019. "Energy and CO2 implications of decarbonization strategies for China beyond efficiency: Modeling 2050 maximum renewable resources and accelerated electrification impacts," Applied Energy, Elsevier, vol. 242(C), pages 12-26.
    6. Zhengquan Guo & Xingping Zhang & Yihong Ding & Xiaonan Zhao, 2021. "A Forecasting Analysis on China‘S Energy Use and Carbon Emissions Based on A Dynamic Computable General Equilibrium Model," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(3), pages 727-739, February.
    7. Zhang, Mingming & Tang, Yamei & Liu, Liyun & Zhou, Dequn, 2022. "Optimal investment portfolio strategies for power enterprises under multi-policy scenarios of renewable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    8. Li, Tianyu & Gao, Ciwei & Chen, Tao & Jiang, Yu & Feng, Yingchun, 2022. "Medium and long-term electricity market trading strategy considering renewable portfolio standard in the transitional period of electricity market reform in Jiangsu, China," Energy Economics, Elsevier, vol. 107(C).
    9. Ding, Hao & Zhou, Dequn & Zhou, P., 2020. "Optimal policy supports for renewable energy technology development: A dynamic programming model," Energy Economics, Elsevier, vol. 92(C).
    10. Abbasi, Kashif Raza & Shahbaz, Muhammad & Zhang, Jinjun & Irfan, Muhammad & Alvarado, Rafael, 2022. "Analyze the environmental sustainability factors of China: The role of fossil fuel energy and renewable energy," Renewable Energy, Elsevier, vol. 187(C), pages 390-402.
    11. Cui, Qi & Liu, Yu & Ali, Tariq & Gao, Ji & Chen, Hao, 2020. "Economic and climate impacts of reducing China's renewable electricity curtailment: A comparison between CGE models with alternative nesting structures of electricity," Energy Economics, Elsevier, vol. 91(C).
    12. Sue Wing, Ian, 2008. "The synthesis of bottom-up and top-down approaches to climate policy modeling: Electric power technology detail in a social accounting framework," Energy Economics, Elsevier, vol. 30(2), pages 547-573, March.
    13. Zhi-Fu Mi & Yi-Ming Wei & Bing Wang & Jing Meng & Zhu Liu & Yuli Shan & Jingru Liu & Dabo Guan, 2017. "Socioeconomic impact assessment of China's CO2 emissions peak prior to 2030," CEEP-BIT Working Papers 103, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    14. Yuli Shan & Ya Zhou & Jing Meng & Zhifu Mi & Jingru Liu & Dabo Guan, 2019. "Peak cement‐related CO2 emissions and the changes in drivers in China," Journal of Industrial Ecology, Yale University, vol. 23(4), pages 959-971, August.
    15. Zheng, Yanting & Yang, Huidan & Huang, Jinyuan & Cui, Qi & Zhan, Jinyan, 2022. "Industrial agglomeration measured by plants’ distance and CO2 emissions: Evidence from 268 Chinese prefecture-level cities," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    16. Mu, Yaqian & Cai, Wenjia & Evans, Samuel & Wang, Can & Roland-Holst, David, 2018. "Employment impacts of renewable energy policies in China: A decomposition analysis based on a CGE modeling framework," Applied Energy, Elsevier, vol. 210(C), pages 256-267.
    17. Dai, Hancheng & Xie, Yang & Liu, Jingyu & Masui, Toshihiko, 2018. "Aligning renewable energy targets with carbon emissions trading to achieve China's INDCs: A general equilibrium assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 4121-4131.
    18. Duan, Hongbo & Mo, Jianlei & Fan, Ying & Wang, Shouyang, 2018. "Achieving China's energy and climate policy targets in 2030 under multiple uncertainties," Energy Economics, Elsevier, vol. 70(C), pages 45-60.
    19. Yi, Bo-Wen & Xu, Jin-Hua & Fan, Ying, 2019. "Coordination of policy goals between renewable portfolio standards and carbon caps: A quantitative assessment in China," Applied Energy, Elsevier, vol. 237(C), pages 25-35.
    20. Lin, Boqiang & Jia, Zhijie, 2018. "Impact of quota decline scheme of emission trading in China: A dynamic recursive CGE model," Energy, Elsevier, vol. 149(C), pages 190-203.
    21. Jeffrey C Peters, 2016. "The GTAP-Power Data Base: Disaggregating the Electricity Sector in the GTAP Data Base," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 209-250, June.
    22. Cao, Jing & Dai, Hancheng & Li, Shantong & Guo, Chaoyi & Ho, Mun & Cai, Wenjia & He, Jianwu & Huang, Hai & Li, Jifeng & Liu, Yu & Qian, Haoqi & Wang, Can & Wu, Libo & Zhang, Xiliang, 2021. "The general equilibrium impacts of carbon tax policy in China: A multi-model comparison," Energy Economics, Elsevier, vol. 99(C).
    23. Liu, Yawen & Cui, Qi & Liu, Yu & Zhang, Jinzhu & Zhou, Meifang & Ali, Tariq & Yang, Lingyu & Feng, Kuishuang & Hubacek, Klaus & Li, Xinbei, 2021. "Countermeasures against economic crisis from COVID-19 pandemic in China: An analysis of effectiveness and trade-offs," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 482-495.
    24. Qi Zhang & Xinxin Zhang & Qi Cui & Weining Cao & Ling He & Yexin Zhou & Xiaofan Li & Yunpeng Fan, 2022. "The Unequal Effect of the COVID-19 Pandemic on the Labour Market and Income Inequality in China: A Multisectoral CGE Model Analysis Coupled with a Micro-Simulation Approach," IJERPH, MDPI, vol. 19(3), pages 1-21, January.
    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. Raihan, Asif & Mainul Bari, A.B.M., 2024. "Energy-economy-environment nexus in China: The role of renewable energies toward carbon neutrality," Innovation and Green Development, Elsevier, vol. 3(3).
    2. Quan Cheng & Jing Yang, 2023. "Allocation and Evolution of Government Attention in China’s Electric Power Industry: An Analysis Based on Policy Text," Sustainability, MDPI, vol. 15(16), pages 1-19, August.
    3. Huang, Zhilin & Li, Xiang & Chen, Jialing & Zhang, Dingfeng, 2024. "Does the Three-Year Action Plan for Winning the Blue Sky Defense Battle implementation enabling the high-quality development of regional energy? A quasi-natural experiment from China," Energy, Elsevier, vol. 312(C).
    4. Tao Li & Lei Ma & Zheng Liu & Chaonan Yi & Kaitong Liang, 2023. "Dual Carbon Goal-Based Quadrilateral Evolutionary Game: Study on the New Energy Vehicle Industry in China," IJERPH, MDPI, vol. 20(4), pages 1-16, February.
    5. Jie Gao & Wu Zhang & Chunbaixue Yang & Qun Wang & Rui Yuan & Rui Wang & Limiao Zhang & Zhijian Li & Xiaoli Luo, 2023. "A Comparative Study of China’s Carbon Neutrality Policy and International Research Keywords under the Background of Decarbonization Plans in China," Sustainability, MDPI, vol. 15(17), pages 1-23, August.
    6. Abdul Hayy Haziq Mohamad & Muhamad Rias K. V. Zainuddin & Rossazana Ab-Rahim, 2023. "Does Renewable Energy Transition in the USA and China Overcome Environmental Degradation?," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 234-243, November.

    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. Hu, Yu & Chi, Yuanying & Zhou, Wenbing & Li, Jialin & Wang, Zhengzao & Yuan, Yongke, 2023. "The interactions between renewable portfolio standards and carbon emission trading in China: An evolutionary game theory perspective," Energy, Elsevier, vol. 271(C).
    2. Weng, Yuwei & Cai, Wenjia & Wang, Can, 2021. "Evaluating the use of BECCS and afforestation under China’s carbon-neutral target for 2060," Applied Energy, Elsevier, vol. 299(C).
    3. Fan, Shuting & An, Kangxin & Zhang, Shihui & Wang, Can, 2024. "Cost-effective energy development pathway considering air quality co-benefits under climate target: A case study of Anhui Province in China," Applied Energy, Elsevier, vol. 353(PA).
    4. Qi Zhang & Xinxin Zhang & Qi Cui & Weining Cao & Ling He & Yexin Zhou & Xiaofan Li & Yunpeng Fan, 2022. "The Unequal Effect of the COVID-19 Pandemic on the Labour Market and Income Inequality in China: A Multisectoral CGE Model Analysis Coupled with a Micro-Simulation Approach," IJERPH, MDPI, vol. 19(3), pages 1-21, January.
    5. Wang, Ge & Zhang, Qi & Su, Bin & Shen, Bo & Li, Yan & Li, Zhengjun, 2021. "Coordination of tradable carbon emission permits market and renewable electricity certificates market in China," Energy Economics, Elsevier, vol. 93(C).
    6. Chen, Shuyang, 2024. "Fertility rate, fertility policy, and climate policy: A case study in China," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 339-348.
    7. Ying, Zhou & Xin-gang, Zhao, 2021. "The impact of Renewable Portfolio Standards on carbon emission trading under the background of China’s electricity marketization reform," Energy, Elsevier, vol. 226(C).
    8. Cui, Qi & Liu, Yu & Ali, Tariq & Gao, Ji & Chen, Hao, 2020. "Economic and climate impacts of reducing China's renewable electricity curtailment: A comparison between CGE models with alternative nesting structures of electricity," Energy Economics, Elsevier, vol. 91(C).
    9. Bohlmann, H.R. & Horridge, J.M. & Inglesi-Lotz, R. & Roos, E.L. & Stander, L., 2019. "Regional employment and economic growth effects of South Africa’s transition to low-carbon energy supply mix," Energy Policy, Elsevier, vol. 128(C), pages 830-837.
    10. Ning Xiang & Limao Wang & Shuai Zhong & Chen Zheng & Bo Wang & Qiushi Qu, 2021. "How Does the World View China’s Carbon Policy? A Sentiment Analysis on Twitter Data," Energies, MDPI, vol. 14(22), pages 1-17, November.
    11. Yue, Tingyi & Wang, Honglei & Li, Chengjiang & Hu, Yu-jie, 2024. "Optimization strategies for green power and certificate trading in China considering seasonality: An evolutionary game-based system dynamics," Energy, Elsevier, vol. 311(C).
    12. Lin, Boqiang & Xie, Yongjing, 2024. "The role of venture capital in determining the total factor productivity of renewable energy enterprises: In the context of government subsidy reduction," Energy Economics, Elsevier, vol. 132(C).
    13. Jin, Gui & Shi, Xin & Zhang, Lei & Hu, Shougeng, 2020. "Measuring the SCCs of different Chinese regions under future scenarios," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    14. Jiang, Hong-Dian & Purohit, Pallav & Liang, Qiao-Mei & Dong, Kangyin & Liu, Li-Jing, 2022. "The cost-benefit comparisons of China's and India's NDCs based on carbon marginal abatement cost curves," Energy Economics, Elsevier, vol. 109(C).
    15. Yao, Xilong & Wang, Hualing & Shao, Shuai & Li, Xiaoyu & Guo, Zhi, 2022. "“Booster” or “obstacle”: Can coal capacity cut policies moderate the resource curse effect? Evidence from Shanxi (China)," Resources Policy, Elsevier, vol. 75(C).
    16. Mu, Yaqian & Evans, Samuel & Wang, Can & Cai, Wenjia, 2018. "How will sectoral coverage affect the efficiency of an emissions trading system? A CGE-based case study of China," Applied Energy, Elsevier, vol. 227(C), pages 403-414.
    17. Huang, Hai & Roland-Holst, David & Springer, Cecilia & Lin, Jiang & Cai, Wenjia & Wang, Can, 2019. "Emissions trading systems and social equity: A CGE assessment for China," Applied Energy, Elsevier, vol. 235(C), pages 1254-1265.
    18. Guo, Zhi & Mao, Xianqiang & Lu, Jianhong & Gao, Yubing & Chen, Xing & Zhang, Shining & Ma, Zhiyuan, 2024. "Can a new power system create more employment in China?," Energy, Elsevier, vol. 295(C).
    19. Willenbockel, Dirk, 2017. "Macroeconomic Effects of a Low-Carbon Electricity Transition in Kenya and Ghana: An Exploratory Dynamic General Equilibrium Analysis," MPRA Paper 78070, University Library of Munich, Germany.
    20. Li, Jialin & Hu, Yu & Chi, Yuanying & Liu, Dunnan & Yang, Shuxia & Gao, Zhiyuan & Chen, Yuetong, 2024. "Analysis on the synergy between markets of electricity, carbon, and tradable green certificates in China," Energy, Elsevier, vol. 302(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:gam:jijerp:v:19:y:2022:i:11:p:6386-:d:823017. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.