Equity-efficiency trade-off in China's energy capping policy

As a part of the transition to a sustainable economy, China has set a cap on primary energy consumption for the first time, of 5.0 billion tonnes of standard coal equivalent by 2020. However, there is a debate on the cap feasibility and failure to adequately address the underlying equity-efficiency...

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Bibliographic Details
Published in:Energy policy 2019-03, Vol.126, p.57-65
Main Authors: Guo, Jin, Du, Limin, Wei, Chu
Format: Article
Language:English
Subjects:
Ambition
China
Coal
Data quality
Disaggregation
Efficiency
Energy cap
Energy conservation
Energy consumption
Energy costs
Energy development
Energy policy
Equity
Feasibility
Feasibility studies
Financial support
Provinces
Trade-off
Tradeoffs
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Summary:As a part of the transition to a sustainable economy, China has set a cap on primary energy consumption for the first time, of 5.0 billion tonnes of standard coal equivalent by 2020. However, there is a debate on the cap feasibility and failure to adequately address the underlying equity-efficiency trade-off, which hampers achievement. This paper identifies some key challenges ahead, including the coal-dominant energy mix, declining financial support, inconsistent central-local goals, rising costs of energy-saving measures and quality of energy statistical data. By quantifying the preference of each providence toward equity-based or efficiency-based allocation schemes, the great disparity among provinces is revealed and the equity-efficiency trade-off relationship is confirmed. Developing regions, primarily located in central and western areas, tend to favor equity-based disaggregating schemes. Contrarily, developed coastal provinces strongly favor efficiency-based schemes. The present national disaggregation schemes are mainly based on historical energy consumption, but disregard the provincial development gap and efficiency factors. We conclude that this ambitious goal is likely within reach, but increased efforts and flexible instruments are needed. •We identify key challenges of China's energy cap.•We quantify provincial preference toward equity and efficiency.•We confirms the equity-efficiency trade-off relationship.•China's energy cap is likely within reach, but flexible instruments are needed.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2018.11.017