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Impacts of shifting China's final energy consumption to electricity on CO2 emission reduction

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  • Zhao, Weigang
  • Cao, Yunfei
  • Miao, Bo
  • Wang, Ke
  • Wei, Yi-Ming

Abstract

Electrification is advocated by both academics and the Chinese government to control air pollution and promote productivity. However, the problem remains to be solved of how to achieve the trade-off between reducing CO2 emissions and maintaining economic growth when switching from various fuels to electricity under the policy support. In view of this, after analyzing the effects of exogenous shocks in various fuel demands based on impulse response functions of several vector autoregression models, this paper measures the current and long-term impacts of electrification on GDP and CO2 emissions. Finally, some typical cases of replacement of fossil-fueled appliances by electrical counterparts encouraged by the government are assessed. The main findings are: (1) Almost all of the exogenous shocks in fuel demands have positive effects on both GDP and CO2 emissions, while the gas shock has a slightly negative effect on GDP; (2) Carbon intensity decreases and even CO2 emission reductions with increased GDP are potentially achieved, in both current and permanent periods, for coal-electricity and oil-electricity switching, while gas-electricity switching is not a wise choice in view of CO2 emission reduction in the long run; (3) The alternative electric appliances for electrification have very different impacts on CO2 emission reduction.

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  • Zhao, Weigang & Cao, Yunfei & Miao, Bo & Wang, Ke & Wei, Yi-Ming, 2018. "Impacts of shifting China's final energy consumption to electricity on CO2 emission reduction," Energy Economics, Elsevier, vol. 71(C), pages 359-369.
  • Handle: RePEc:eee:eneeco:v:71:y:2018:i:c:p:359-369
    DOI: 10.1016/j.eneco.2018.03.004
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    More about this item

    Keywords

    Fuel-switching; Inter-fuel substitution; Electrification; CO2 emissions; Economic growth;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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