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Policy-driven energy transition: China's low-carbon journey and global implications

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  • Li, Yilong
  • Huang, Yongjian
  • Sheng, Jie

Abstract

This paper examines the effects of China's 2014 Energy Development Strategic Action Plan (EDSAP) on the low-carbon transition of provincial energy consumption from 2007 to 2022. Using an intensity-based difference-in-differences approach with event-study and robustness tests, we show that EDSAP significantly promotes a cleaner energy mix, with effects that intensify over time. Mechanism analysis identifies green finance, technological innovation, and government attention as key drivers, while excessive intervention dampens policy effectiveness. Spatial Durbin results confirm positive direct impacts and reveal spillovers to neighboring provinces, underscoring interregional externalities. Heterogeneity tests further indicate stronger outcomes in provinces with higher marketization and outside the eastern region. These findings highlight how finance, innovation, and governance channels jointly shape the effectiveness of energy transition policies, while also pointing to the importance of calibrated state intervention and cross-regional coordination in advancing China's low-carbon development under the evolving framework of the 2024 Energy Law.

Suggested Citation

  • Li, Yilong & Huang, Yongjian & Sheng, Jie, 2025. "Policy-driven energy transition: China's low-carbon journey and global implications," Energy Economics, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325007157
    DOI: 10.1016/j.eneco.2025.108888
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