The impact of China's differential electricity pricing policy on power sector CO2 emissions

This article investigates the impact of China's differential electricity pricing policy on power sector CO2 emissions using the logarithmic mean divisia index method. The differential pricing policy, intended to reduce energy intensity in manufacturing, is being implemented in eight electricity...

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Bibliographic Details
Published in:Energy policy 2012-06, Vol.45, p.412-419
Main Authors: Hu, Junfeng, Kahrl, Fredrich, Yan, Qingyou, Wang, Xiaoya
Format: Article
Language:English
Subjects:
Air pollution
Air pollution caused by fuel industries
Applied sciences
carbon dioxide
Carbon emissions
China
China (People's Republic)
CO2 emissions
Differential analysis
Differential pricing policy
Economic data
Electric energy
Electric power
Electricity
Energy
Energy economics
energy use and consumption
Energy utilization
Energy. Thermal use of fuels
Exact sciences and technology
General, economic and professional studies
greenhouse gas emissions
Heavy industry
issues and policy
Manufacturing
metals
Metering. Control
Pollution
Power sector
Price policy
Prices
rolling
Smelting
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Summary:This article investigates the impact of China's differential electricity pricing policy on power sector CO2 emissions using the logarithmic mean divisia index method. The differential pricing policy, intended to reduce energy intensity in manufacturing, is being implemented in eight electricity-intensive industries. The study finds that, during 2004–2009, the policy accounted for a drop of roughly 115TWh in electricity use, which amounted to a reduction of 82 million tons of CO2 emissions. The policy has been most effective in reducing electricity use in the nonferrous metal smelting and rolling industry, and least effective in the ferrous metal smelting and rolling industry. Because the differential pricing policy has had significantly different effects across industries, improving the policy's design and implementation going forward will require a more detailed understanding and analysis of how it can be better tailored to individual industries. ► Power consumption in China's energy-intensive industries is still increasing rapidly. ► The largest contribution is output effect. Intensity effect is negative significant. ► Differential pricing policy accounted for a 101.9TWh reduction in 2004–2009. ► The effects of the differential pricing policy are different across industries.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2012.02.049