Evaluation of potential co-benefits of air pollution control and climate mitigation policies for China's electricity sector

• Published in: Energy economics 2020-10, Vol.92, p.104917, Article 104917
• Main Authors: Wei, Xinyang, Tong, Qing, Magill, Iain, Vithayasrichareon, Peerapat, Betz, Regina
• Format: Article
• Language: English
• Subjects: Air; Air pollution; Air pollution control; Carbon; China; Climate change; Climate change mitigation; Climate policy; Co-benefits; Coal; Coal-fired power plants; Electric industries; Electric power; Electric power generation; Electricity; Electricity distribution; Electricity generation; Electricity sector; Emissions; Emissions control; Energy economics; Environmental policy; Greenhouse gas mitigation; Greenhouse gases; Industrial plant emissions; Industrialization; Mitigation; Pollutants; Pollution control; Power plants; Pricing; Pricing policies; Technology
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2020.104917

Since the rapid industrialisation, local air pollution has become one of China's most important environmental issues. In consequence, increasingly stringent air pollution control policies have been established by the Chinese government. These policies will inevitably affect China's future electric power investment given the key contribution of this sector to air pollution. This sector is also a key contributor to China’s greenhouse gas emissions and hence climate policy efforts. We present a study exploring what impacts of potential interactions and combinations of different policy efforts for local air pollutant control and carbon mitigation have on China's future electricity generation mix. The study utilises a novel generation portfolio model that explicitly incorporates key uncertainties in future technology costs and different policy approaches including carbon pricing and air emissions control. The findings highlight that China can achieve significant reductions for both greenhouse gas and local air pollutant emissions through a combination of climate change and air pollution control policies. Furthermore, there are potentially significant co-benefits from the perspectives of both air pollutant control and carbon mitigation and, notably, that the co-benefit from a sufficient carbon pricing policy to air pollution emission reductions is much stronger than that from stringent air pollutant control policies to carbon mitigation. Specifically, in order to achieve substantial local air pollution and greenhouse gas mitigation from China's electricity sector, it is necessary to close coal-fired power plants rather than merely seeking to clean their air pollution emissions up. •CO2 emissions reductions need coal plants to close and renewalbe shares to increase.•Climate policy will incentivize coal plants shut down.•Air pollution policy impact on CO2 emissions limited since end-of pipe clean-up.•Co-benefits from climate policy on air pollution much stronger than vice versa.