China Energy Outlook 2020 - Flipbook - Page 155
workers and direct household subsidies based on proportional per capita will reduce the social
income gap to the greatest extent compared with other scenarios. By 2050, this distribution
policy will reduce the Gini coefficient in China by 10% compared to the Business as Usual (BAU)
scenario.
Springer, C., Evans, S., Lin, J., and Roland-Holst, D. "Low carbon growth in China: The role of
emissions trading in a transitioning economy" Applied Energy 235 (2019).
https://doi.org/10.1016/j.apenergy.2018.11.046
Abstract. China’s leaders are increasingly committed to low-carbon economic development.
Although China’s economy has dramatically transformed since the initiation of economic
reforms in 1978, it is still structurally different from post-industrial, high-income countries, and
economic reform is ongoing. At the same time, China is taking major steps towards regulating
its carbon dioxide emissions. China is currently preparing to implement a national carbon
dioxide emissions trading system (ETS), which will be the largest ETS in the world. Our analysis
demonstrates how these major economic and emissions policies are linked in China’s economy.
We use a dynamic computable general equilibrium (CGE) model of China’s economy to simulate
the interaction between a structural transition policy and a national ETS. We demonstrate an
important policy instrument – the household savings rate – for stimulating economic transition.
We show that by increasing consumption in lower emissions-intensity sectors, China can
sustain growth in its economy while reducing emissions and transitioning to a more OECD-like
economic structure. In addition, emissions reductions from an ETS regulation can be achieved
at a lower cost for regulated firms when taking into account the changing structure of the
economy.
Electricity Market Reform
Abhyankar, N., Lin, J., Liu, X., and Sifuentes, F. “Economic and environmental benefits of
market-based power-system reform in China: A case study of the Southern grid system”
Resources, Conservation and Recycling 153 (2020) 10455
https://doi.org/10.1016/j.resconrec.2019.104558
Abstract. China, whose power system accounts for about 13% of global energy-related CO2
emissions, has begun implementing market-based power-sector reforms. This paper simulates
power system dispatch in China’s Southern Grid region and examines the economic and
environmental impacts of market-based operations. We find that market-based operation can
increase efficiency and reduce costs in all Southern Grid provinces—reducing wholesale
electricity costs by up to 35% for the entire region relative to the 2016 baseline. About 60% of
the potential cost reduction can be realized by creating independent provincial markets within
the region, and the rest by creating a regional market without transmission expansion. The
wholesale market revenue is adequate to recover generator fixed costs; however, financial
restructuring of current payment mechanisms may be necessary. Electricity markets could also
reduce the Southern Grid’s CO2 emissions by up to 10% owing to more efficient thermal
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