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Interregional Sharing of Energy Conservation Targets in China: Efficiency and Equity

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  • Dan Wei
  • Adam Rose

Abstract

Energy conservation is a long-term strategic policy in China to support its economic and social development. This strategy is important for saving resources, protecting the environment, and ensuring a secure supply of energy. However, energy conservation often involves large amounts of investment and may also have dampening impacts on some local and regional economies. Moreover, energy conservation has many features of a public good. Therefore, government policy will have to play a strong role to foster local efforts and interregional cooperation on this issue. This paper analyzes a promising policy instrument Ð an interregional energy conservation-quota trading system. An operational model is developed to simulate the workings of this policy instrument for a variety of quota allocations among regions. The results indicate that a tradable quota system can help China achieve its conservation target in a cost-effective way and in accordance with its regional development strategy.

Suggested Citation

  • Dan Wei & Adam Rose, 2009. "Interregional Sharing of Energy Conservation Targets in China: Efficiency and Equity," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 81-112.
  • Handle: RePEc:aen:journl:2009v30-04-a03
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    1. repec:eee:eneeco:v:64:y:2017:i:c:p:335-345 is not listed on IDEAS
    2. Chang, Kai & Zhang, Chao & Chang, Hao, 2016. "Emissions reduction allocation and economic welfare estimation through interregional emissions trading in China: Evidence from efficiency and equity," Energy, Elsevier, vol. 113(C), pages 1125-1135.
    3. Zhou, P. & Zhang, L. & Zhou, D.Q. & Xia, W.J., 2013. "Modeling economic performance of interprovincial CO2 emission reduction quota trading in China," Applied Energy, Elsevier, pages 1518-1528.
    4. Chang, Kai & Chang, Hao, 2016. "Cutting CO2 intensity targets of interprovincial emissions trading in China," Applied Energy, Elsevier, pages 211-221.
    5. Du, Limin & Hanley, Aoife & Wei, Chu, 2015. "Estimating the Marginal Abatement Cost Curve of CO2 Emissions in China: Provincial Panel Data Analysis," Energy Economics, Elsevier, vol. 48(C), pages 217-229.
    6. Chang, Chun-Ping & Berdiev, Aziz N. & Lee, Chien-Chiang, 2013. "Energy exports, globalization and economic growth: The case of South Caucasus," Economic Modelling, Elsevier, vol. 33(C), pages 333-346.
    7. Cui, Lian-Biao & Fan, Ying & Zhu, Lei & Bi, Qing-Hua, 2014. "How will the emissions trading scheme save cost for achieving China’s 2020 carbon intensity reduction target?," Applied Energy, Elsevier, pages 1043-1052.
    8. Wei, Chu & Ni, Jinlan & Du, Limin, 2012. "Regional allocation of carbon dioxide abatement in China," China Economic Review, Elsevier, vol. 23(3), pages 552-565.

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    JEL classification:

    • F0 - International Economics - - General

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