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The Health and Climate Benefits of Economic Dispatch in China’s Power System

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Listed:
  • Luo, Qian
  • Garcia-Menendez, Fernando
  • Yang, Haozhe
  • Deshmukh, Ranjit
  • He, Gang
  • Lin, Jiang
  • Johnson, Jeremiah X

Abstract

China's power system is highly regulated and uses an "equal-share" dispatch approach. However, market mechanisms are being introduced to reduce generation costs and improve system reliability. Here, we quantify the climate and human health impacts brought about by this transition, modeling China's power system operations under economic dispatch. We find that significant reductions in mortality related to air pollution (11%) and CO 2 emissions (3%) from the power sector can be attained by economic dispatch, relative to the equal-share approach, through more efficient coal-powered generation. Additional health and climate benefits can be achieved by incorporating emission externalities in electricity generation costs. However, the benefits of the transition to economic dispatch will be unevenly distributed across China and may lead to increased health damage in some regions. Our results show the potential of dispatch decision-making in electricity generation to mitigate the negative impacts of power plant emissions with existing facilities in China.

Suggested Citation

  • Luo, Qian & Garcia-Menendez, Fernando & Yang, Haozhe & Deshmukh, Ranjit & He, Gang & Lin, Jiang & Johnson, Jeremiah X, 2023. "The Health and Climate Benefits of Economic Dispatch in China’s Power System," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2vq7v90q, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt2vq7v90q
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    References listed on IDEAS

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    1. Cao, Jing & Ho, Mun S. & Ma, Rong & Zhang, Yu, 2024. "Transition from plan to market: Imperfect regulations in the electricity sector of China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 509-533.

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