The impact of China's Differential Electricity Pricing policy on fossil fuel consumption
Abstract China, the world's largest energy consumer, has been increasingly relying on pricing policies to improve energy efficiency in recent years. This paper estimates the impact of Differential Electricity Pricing (DEP) policy, which covers the most energy‐intensive industries in China. Unde...
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| Format: | Article |
| Language: | English |
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Wiley
2023-03-01
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| Series: | International Studies of Economics |
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| Online Access: | https://doi.org/10.1002/ise3.36 |
| _version_ | 1797854873884033024 |
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| author | Lin Zhao |
| author_facet | Lin Zhao |
| author_sort | Lin Zhao |
| collection | DOAJ |
| description | Abstract China, the world's largest energy consumer, has been increasingly relying on pricing policies to improve energy efficiency in recent years. This paper estimates the impact of Differential Electricity Pricing (DEP) policy, which covers the most energy‐intensive industries in China. Under the DEP policy, electricity surcharges are imposed on enterprises using “eliminated” and “restricted” production technologies, of which the “eliminated” enterprises are more backward in technology level and are charged much higher electricity tariffs. We exploit a differences‐in‐differences approach to assess the effect of the DEP policy on fossil fuel consumption. The results indicate that the DEP policy led to a reduction in coal consumption intensity (CCI) of “eliminated” enterprises, which can be explained by the obsoleting of backward equipment in these enterprises. As for the “restricted” enterprises, it was economically optimal to continue to use “restricted” equipment; consequently, the DEP policy had no significant impact on CCI. |
| first_indexed | 2024-04-09T20:13:18Z |
| format | Article |
| id | doaj.art-8525f927228e4c2dbbdd6a80a6e6ba48 |
| institution | Directory Open Access Journal |
| issn | 2831-3224 |
| language | English |
| last_indexed | 2024-04-09T20:13:18Z |
| publishDate | 2023-03-01 |
| publisher | Wiley |
| record_format | Article |
| series | International Studies of Economics |
| spelling | doaj.art-8525f927228e4c2dbbdd6a80a6e6ba482023-03-31T13:40:16ZengWileyInternational Studies of Economics2831-32242023-03-011819711910.1002/ise3.36The impact of China's Differential Electricity Pricing policy on fossil fuel consumptionLin Zhao0Institute for Advanced Research Shanghai University of Finance and Economics Shanghai ChinaAbstract China, the world's largest energy consumer, has been increasingly relying on pricing policies to improve energy efficiency in recent years. This paper estimates the impact of Differential Electricity Pricing (DEP) policy, which covers the most energy‐intensive industries in China. Under the DEP policy, electricity surcharges are imposed on enterprises using “eliminated” and “restricted” production technologies, of which the “eliminated” enterprises are more backward in technology level and are charged much higher electricity tariffs. We exploit a differences‐in‐differences approach to assess the effect of the DEP policy on fossil fuel consumption. The results indicate that the DEP policy led to a reduction in coal consumption intensity (CCI) of “eliminated” enterprises, which can be explained by the obsoleting of backward equipment in these enterprises. As for the “restricted” enterprises, it was economically optimal to continue to use “restricted” equipment; consequently, the DEP policy had no significant impact on CCI.https://doi.org/10.1002/ise3.36Chinacoal consumption intensitydifferences‐in‐differences methodologyDifferential Electricity Pricing policyenergy‐intensive industries |
| spellingShingle | Lin Zhao The impact of China's Differential Electricity Pricing policy on fossil fuel consumption International Studies of Economics China coal consumption intensity differences‐in‐differences methodology Differential Electricity Pricing policy energy‐intensive industries |
| title | The impact of China's Differential Electricity Pricing policy on fossil fuel consumption |
| title_full | The impact of China's Differential Electricity Pricing policy on fossil fuel consumption |
| title_fullStr | The impact of China's Differential Electricity Pricing policy on fossil fuel consumption |
| title_full_unstemmed | The impact of China's Differential Electricity Pricing policy on fossil fuel consumption |
| title_short | The impact of China's Differential Electricity Pricing policy on fossil fuel consumption |
| title_sort | impact of china s differential electricity pricing policy on fossil fuel consumption |
| topic | China coal consumption intensity differences‐in‐differences methodology Differential Electricity Pricing policy energy‐intensive industries |
| url | https://doi.org/10.1002/ise3.36 |
| work_keys_str_mv | AT linzhao theimpactofchinasdifferentialelectricitypricingpolicyonfossilfuelconsumption AT linzhao impactofchinasdifferentialelectricitypricingpolicyonfossilfuelconsumption |