Carbon pricing and electricity market reforms in China

As a large emerging economy, China is exploring to establish a carbon-pricing system to mitigate greenhouse gas emissions. The electricity sector which generates the greatest amount of China’s carbon dioxide emissions should be covered by such a carbon-pricing system. The review of the three main st...

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Bibliographic Details
Published in:Clean technologies and environmental policy 2014-06, Vol.16 (5), p.921-933
Main Authors: Fan, Jin, Zhao, Dingtao, Wu, Yanrui, Wei, Jiuchang
Format: Article
Language:English
Subjects:
Carbon
Carbon dioxide
Carbon dioxide emissions
China
Climate change
Developing countries
Earth and Environmental Science
Electric power
Electricity
Electricity pricing
Emissions trading
Energy economics
Environment
Environmental Economics
Environmental Engineering/Biotechnology
Environmental policy
Fairs & exhibitions
Greenhouse gases
Industrial and Production Engineering
Industrial Chemistry/Chemical Engineering
LDCs
Liberalization
Markets
Obstacles
Original Paper
Pricing
Reforms
Sustainable Development
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Summary:As a large emerging economy, China is exploring to establish a carbon-pricing system to mitigate greenhouse gas emissions. The electricity sector which generates the greatest amount of China’s carbon dioxide emissions should be covered by such a carbon-pricing system. The review of the three main stages of China’s electricity market reforms shows that the degree of electricity marketization is relatively low, which might become an obstacle to carbon pricing. This paper develops theoretical and empirical models to analyze the impacts of carbon pricing on electricity supply under two scenarios, namely, marketization and regulation. It is concluded that the electricity market reform is a prerequisite for the development of carbon pricing. Without market-oriented reforms of electricity pricing in China, carbon pricing might lead to a shortage in electricity supply. Potential electricity market reforms to encourage market competition and promote market-oriented electricity pricing are also suggested.
ISSN:1618-954X
1618-9558
DOI:10.1007/s10098-013-0691-6