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China’s Cap on Coal and the Efficiency of Local Interventions: A Benefit-Cost Analysis of Phasing out Coal in Power Plants and in Households in Beijing 1

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  • Jin, Yana
  • Andersson, Henrik
  • Zhang, Shiqiu

Abstract

China’s Cap on Coal Consumption (CCC) Policy serves as a key strategy to address the serious air pollution in China, and it helps to address coal’s climate, environment and health damages. Current implementation of it focuses on substituting coal used in power plants and boilers with natural gas, whereas phasing out household coal use is less emphasized. This study estimates the benefits and costs of interventions for phasing out coal used in power plants and in households in Beijing. The results suggest that the phasing out of household coal use can result in net social benefits. However, coal-to-gas projects for power plants actually bring net social losses, a result largely attributable to the relative high price of natural gas in China. In addition to the actual policy evaluations of phasing out coal, this study outlines how to conduct economic analysis of air pollution policies in China taking into account uncertainty and correlations of key parameters. With the importance at a national and global level to reduce the negative effects of coal consumption, together with the trend of scaling up coal reduction interventions in China from local pioneers to the national level, this study provides implications on how to achieve more socially beneficial results for such interventions.

Suggested Citation

  • Jin, Yana & Andersson, Henrik & Zhang, Shiqiu, 2017. "China’s Cap on Coal and the Efficiency of Local Interventions: A Benefit-Cost Analysis of Phasing out Coal in Power Plants and in Households in Beijing 1," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 8(2), pages 147-186, July.
  • Handle: RePEc:cup:jbcoan:v:8:y:2017:i:02:p:147-186_00
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    Citations

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    Cited by:

    1. Li, Shoujun & Ma, Xiaoping & Yang, Chunyu, 2018. "A combined thermal power plant investment decision-making model based on intelligent fuzzy grey model and ito stochastic process and its application," Energy, Elsevier, vol. 159(C), pages 1102-1117.
    2. Zhang, Xiang & Jin, Yana & Dai, Hancheng & Xie, Yang & Zhang, Shiqiu, 2019. "Health and economic benefits of cleaner residential heating in the Beijing–Tianjin–Hebei region in China," Energy Policy, Elsevier, vol. 127(C), pages 165-178.
    3. Yana Jin & Henrik Andersson & Shiqiu Zhang, 2016. "Air Pollution Control Policies in China: A Retrospective and Prospects," IJERPH, MDPI, vol. 13(12), pages 1-22, December.
    4. Jin, Yana & Andersson, Henrik & Zhang, Shiqiu, 2020. "Do preferences to reduce health risks related to air pollution depend on illness type? Evidence from a choice experiment in Beijing, China," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    5. Chen, Han & Chen, Wenying, 2019. "Potential impact of shifting coal to gas and electricity for building sectors in 28 major northern cities of China," Applied Energy, Elsevier, vol. 236(C), pages 1049-1061.

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