IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v342y2026ics0360544225053149.html

Socio-economic implications of inter-provincial green electricity trading in China

Author

Listed:
  • Wei, Pengbang
  • Xia, He
  • Du, Xiaoyun
  • Yue, Hui
  • Peng, Xu

Abstract

Inter-provincial Green Electricity Trading (IGET) is an important mechanism for addressing the imbalance in China’s energy geographic distribution. While alleviating power generation-load spatial-temporal mismatches, IGET triggers deep-seated regional fairness issues that exacerbate conflicts and undermine its sustainability. This study makes a theoretical breakthrough by moving beyond the traditional embodied carbon accounting framework to introduce the novel concept of “Environmental Exploitation.” It captures the systematic undervaluation and asymmetric appropriation of green electricity’s multi-dimensional environmental value (encompassing both emission reduction and consumption-added value) in inter-provincial transactions. Based on empirical analysis, this study identifies socio-economic implications of China’s IGET. The environmental value transferred in IGET has been undervalued systematically, which indicates that there exists substantial “Environmental exploitation” - where electricity purchasers inadequately compensate suppliers’ contributions. And the overall underestimation multiple of the environmental value of green electricity has shown an increasing trend from 2008 to 2022. Although the positive contribution of IGET to overall social welfare is gradually increasing, the net effect in the eastern input provinces is usually larger, and the distribution gap between eastern input provinces and the western output provinces is also showing an expanding trend under the influence of factors such as regional heterogeneity of economic structure and environmental policies. This study provides important theoretical basis and policy insights for the future directions of optimizing the IGET in China.

Suggested Citation

  • Wei, Pengbang & Xia, He & Du, Xiaoyun & Yue, Hui & Peng, Xu, 2026. "Socio-economic implications of inter-provincial green electricity trading in China," Energy, Elsevier, vol. 342(C).
    • Handle: RePEc:eee:energy:v:342:y:2026:i:c:s0360544225053149
    DOI: 10.1016/j.energy.2025.139672
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544225053149
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2025.139672?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Wang, Xinru & Long, Ruyin & Chen, Hong & Wang, Yujie & Shi, Yanmin & Yang, Shuhan & Wu, Meifen, 2024. "How to promote the trading in China's green electricity market? Based on environmental perceptions, renewable portfolio standard and subsidies," Renewable Energy, Elsevier, vol. 222(C).
    2. Zhen, Juntao & Zhao, Laijun & Yi, Hongru & Cheng, Youfeng & Wang, Ke & Hu, Haisheng, 2024. "Cross-provincial collaborative transaction that considers both the green electricity and the green certificate markets under a renewable portfolio standard policy," Applied Energy, Elsevier, vol. 372(C).
    3. Hu, Yanlong & Huang, Weibin & Wang, Jing & Chen, Shijun & Zhang, Jie, 2016. "Current status, challenges, and perspectives of Sichuan׳s renewable energy development in Southwest China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1373-1385.
    4. Heimvik, Arild & Amundsen, Eirik S., 2021. "Prices vs. percentages: Use of tradable green certificates as an instrument of greenhouse gas mitigation," Energy Economics, Elsevier, vol. 99(C).
    5. Elena Georgarakis & Thomas Bauwens & Anne-Marie Pronk & Tarek AlSkaif, 2021. "Keep it green, simple and socially fair: a choice experiment on prosumers' preferences for peer to peer electricity trading in the Netherlands," Papers 2109.02452, arXiv.org.
    6. Golany, B & Roll, Y, 1989. "An application procedure for DEA," Omega, Elsevier, vol. 17(3), pages 237-250.
    7. Xu, Xinkuo & Guan, Chengmei & Jin, Jiayu, 2018. "Valuing the carbon assets of distributed photovoltaic generation in China," Energy Policy, Elsevier, vol. 121(C), pages 374-382.
    8. Wang, Jieyu & Wang, Shaojian & Li, Shijie & Feng, Kuishuang, 2019. "Coupling analysis of urbanization and energy-environment efficiency: Evidence from Guangdong province," Applied Energy, Elsevier, vol. 254(C).
    9. Dynge, Marthe Fogstad & Berg, Kjersti & Bjarghov, Sigurd & Cali, Ümit, 2023. "Local electricity market pricing mechanisms’ impact on welfare distribution, privacy and transparency," Applied Energy, Elsevier, vol. 341(C).
    10. Zhang, Shuo & Xu, Zhenhao & Li, Yingzi & Zhang, Jiayuan & Hu, Jiang, 2025. "System dynamics simulation model of price transmission in collaboration market of electricity, carbon, and green certificate driven by multiple policies," Energy, Elsevier, vol. 323(C).
    11. Nathan Ratledge & Gabe Cadamuro & Brandon Cuesta & Matthieu Stigler & Marshall Burke, 2022. "Using machine learning to assess the livelihood impact of electricity access," Nature, Nature, vol. 611(7936), pages 491-495, November.
    12. Yan, Yunfeng & Wang, Ran & Zheng, Xiuxiu & Zhao, Zhongxiu, 2020. "Carbon endowment and trade-embodied carbon emissions in global value chains: Evidence from China," Applied Energy, Elsevier, vol. 277(C).
    13. 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.
    14. Zeng, Lijun & Du, Wenjing & Hong, Weichen, 2025. "An inter-provincial renewable electricity trading model under renewable portfolio standards policy," Energy, Elsevier, vol. 319(C).
    15. Sapio, Alessandro, 2019. "Greener, more integrated, and less volatile? A quantile regression analysis of Italian wholesale electricity prices," Energy Policy, Elsevier, vol. 126(C), pages 452-469.
    16. Tu, Qiang & Mo, Jianlei & Betz, Regina & Cui, Lianbiao & Fan, Ying & Liu, Yu, 2020. "Achieving grid parity of solar PV power in China- The role of Tradable Green Certificate," Energy Policy, Elsevier, vol. 144(C).
    17. Yan, Xia & Jie, Wu & Minjun, Shi & Shouyang, Wang & Zhuoying, Zhang, 2022. "China's regional imbalance in electricity demand, power and water pricing - From the perspective of electricity-related virtual water transmission," Energy, Elsevier, vol. 257(C).
    18. Lee, Kangoh, 2023. "Renewable portfolio standards and electricity prices," Energy Economics, Elsevier, vol. 126(C).
    19. Huaide Wen & Jun Dai, 2021. "Green Technological Progress and the Backwardness Advantage of Green Development: Taking the Sustainable Development Strategy of Central and Western China as an Example," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    20. Purvins, Arturs & Gerbelova, Hana & Sereno, Luigi & Minnebo, Philip, 2021. "Social welfare impact from enhanced Trans-Asian electricity trade," Energy, Elsevier, vol. 215(PA).
    21. Charnes, A. & Cooper, W. W. & Golany, B. & Seiford, L. & Stutz, J., 1985. "Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 91-107.
    22. Al-Nory, Malak & El-Beltagy, Mohamed, 2014. "An energy management approach for renewable energy integration with power generation and water desalination," Renewable Energy, Elsevier, vol. 72(C), pages 377-385.
    23. Helgesen, Per Ivar & Tomasgard, Asgeir, 2018. "An equilibrium market power model for power markets and tradable green certificates, including Kirchhoff's Laws and Nash-Cournot competition," Energy Economics, Elsevier, vol. 70(C), pages 270-288.
    24. Zhai, Mengyu & Huang, Guohe & Liu, Lirong & Zheng, Boyue & Guan, Yuru, 2020. "Inter-regional carbon flows embodied in electricity transmission: network simulation for energy-carbon nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    25. Kamalinia, Saeed & Shahidehpour, Mohammad & Wu, Lei, 2014. "Sustainable resource planning in energy markets," Applied Energy, Elsevier, vol. 133(C), pages 112-120.
    26. Frondel, Manuel & Kaeding, Matthias & Sommer, Stephan, 2022. "Market premia for renewables in Germany: The effect on electricity prices," Energy Economics, Elsevier, vol. 109(C).
    27. Yunwei Li & Ruohan Zhong & Zhen Wang & Manxi Yu & Yujiao Wu & Muhammad Irfan & Yu Hao, 2024. "Would the inequality of environmental quality affect labor productivity and the income gap? Evidence from China," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 67(1), pages 25-58, January.
    28. Bai, Muren & Li, Cunbin, 2024. "Research on the allocation scheme of carbon emission allowances for China's provincial power grids," Energy, Elsevier, vol. 299(C).
    29. Huang, Feipeng, 2023. "How does trade and fiscal decentralization leads to green growth; role of renewable energy development," Renewable Energy, Elsevier, vol. 214(C), pages 334-341.
    30. Merk, Christine & Rehdanz, Katrin & Schröder, Carsten, 2019. "How consumers trade off supply security and green electricity: Evidence from Germany and Great Britain," Energy Economics, Elsevier, vol. 84(S1).
    31. Linnerud, Kristin & Simonsen, Morten, 2017. "Swedish-Norwegian tradable green certificates: Scheme design flaws and perceived investment barriers," Energy Policy, Elsevier, vol. 106(C), pages 560-578.
    32. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    33. Simona Bigerna & Carlo Andrea Bollino & Paolo Polinori, 2014. "The Question of Sustainability of Green Electricity Policy Intervention," Sustainability, MDPI, vol. 6(8), pages 1-23, August.
    34. Yanfeng Li & Yongping Li & Guohe Huang & Rubing Zheng, 2022. "Inter-Provincial Electricity Trading and Its Effects on Carbon Emissions from the Power Industry," Energies, MDPI, vol. 15(10), pages 1-20, May.
    35. Berg, Sigbjorn Atle & Forsund, Finn R. & Hjalmarsson, Lennart & Suominen, Matti, 1993. "Banking efficiency in the Nordic countries," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 371-388, April.
    36. Xue, Jian & Zhang, Wenjing & Zhao, Laijun & Zhu, Di & Li, Lei & Gong, Ruifeng, 2022. "A cooperative inter-provincial model for energy conservation that accounts for employment and social energy costs," Energy, Elsevier, vol. 239(PB).
    37. Narges Salehi Shahrabi & J. T. A. Bressers & M. L. Franco Garcia & Ali Asghar Pourezzat, 2021. "Policy Learning for Generating Green Electricity," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 487-496.
    38. Yan, Sizhe & Wang, Weiqing & Li, Xiaozhu & Maimaiti, Pakezhati & Zhao, Yi, 2024. "Cross-regional green certificate transaction strategies based on a double-layer game model," Applied Energy, Elsevier, vol. 356(C).
    39. Karakosta, Ourania & Petropoulou, Dimitra, 2022. "The EU electricity market: Renewables targets, Tradable Green Certificates and electricity trade," Energy Economics, Elsevier, vol. 111(C).
    40. Hustveit, Magne & Frogner, Jens Sveen & Fleten, Stein-Erik, 2017. "Tradable green certificates for renewable support: The role of expectations and uncertainty," Energy, Elsevier, vol. 141(C), pages 1717-1727.
    41. Georgarakis, Elena & Bauwens, Thomas & Pronk, Anne-Marie & AlSkaif, Tarek, 2021. "Keep it green, simple and socially fair: A choice experiment on prosumers’ preferences for peer-to-peer electricity trading in the Netherlands," Energy Policy, Elsevier, vol. 159(C).
    42. Pan, Yue & Chai, Jian & Tian, Lingyue & Zhang, Xiaokong & Wang, Jiaoyan, 2024. "Regional inequality in China's electricity trade," Energy, Elsevier, vol. 313(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Jialin & Hu, Yu & Chi, Yuanying & Liu, Dunnan & Yang, Shuxia & Gao, Zhiyuan & Chen, Yuetong, 2024. "Analysis on the synergy between markets of electricity, carbon, and tradable green certificates in China," Energy, Elsevier, vol. 302(C).
    2. Arsen Benga & Glediana Zeneli (Foto) & María Jesús Delgado‑Rodríguez & Sonia Lucas Santos, 2025. "Company efforts and environmental efficiency: evidence from European railways considering market-based emissions," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(5), pages 9977-10012, May.
    3. Forsund, Finn R. & Sarafoglou, Nikias, 2005. "The tale of two research communities: The diffusion of research on productive efficiency," International Journal of Production Economics, Elsevier, vol. 98(1), pages 17-40, October.
    4. Wang, Chizhong & Chen, Heng & Wang, Zhengwei & Gao, Yue & Zhang, Guoqiang, 2025. "Economic assessment and grid parity analysis of photovoltaic power generation considering tradable green certificate," Applied Energy, Elsevier, vol. 382(C).
    5. E G Gomes & M P E Lins, 2008. "Modelling undesirable outputs with zero sum gains data envelopment analysis models," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(5), pages 616-623, May.
    6. Ramanathan, Ramakrishnan & Ramanathan, Usha & Bentley, Yongmei, 2018. "The debate on flexibility of environmental regulations, innovation capabilities and financial performance – A novel use of DEA," Omega, Elsevier, vol. 75(C), pages 131-138.
    7. Lu, Wen-Min & Liu, John S. & Kweh, Qian Long & Wang, Chung-Wei, 2016. "Exploring the benchmarks of the Taiwanese investment trust corporations: Management and investment efficiency perspectives," European Journal of Operational Research, Elsevier, vol. 248(2), pages 607-618.
    8. Hu, Yu & Chi, Yuanying & Zhao, Hao & Zhou, Wenbing, 2022. "The development of renewable energy industry under renewable portfolio standards: From the perspective of provincial resource differences," Energy Policy, Elsevier, vol. 170(C).
    9. Liu, John S. & Lu, Louis Y.Y. & Lu, Wen-Min & Lin, Bruce J.Y., 2013. "A survey of DEA applications," Omega, Elsevier, vol. 41(5), pages 893-902.
    10. W. Liu & W. Meng & X. Li & D. Zhang, 2010. "DEA models with undesirable inputs and outputs," Annals of Operations Research, Springer, vol. 173(1), pages 177-194, January.
    11. Ibrahim Alnafrah, 2021. "Efficiency evaluation of BRICS’s national innovation systems based on bias-corrected network data envelopment analysis," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-28, December.
    12. Zou, Bo & Kafle, Nabin & Chang, Young-Tae & Park, Kevin, 2015. "US airport financial reform and its implications for airport efficiency: An exploratory investigation," Journal of Air Transport Management, Elsevier, vol. 47(C), pages 66-78.
    13. Perrigot, Rozenn & Barros, Carlos Pestana, 2008. "Technical efficiency of French retailers," Journal of Retailing and Consumer Services, Elsevier, vol. 15(4), pages 296-305.
    14. Barros, Carlos Pestana & Peypoch, Nicolas, 2008. "Technical efficiency of thermoelectric power plants," Energy Economics, Elsevier, vol. 30(6), pages 3118-3127, November.
    15. Adler, Nicole & Golany, Boaz, 2001. "Evaluation of deregulated airline networks using data envelopment analysis combined with principal component analysis with an application to Western Europe," European Journal of Operational Research, Elsevier, vol. 132(2), pages 260-273, July.
    16. Carlos S�nchez-Gonz�lez & Jos� Luis Sarto & Luis Vicente, 2013. "The efficiency of Spanish mutual funds companies: A slacks-based measure approach," Documentos de Trabajo dt2013-01, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    17. Carlos Pestana Barros & Maria Teresa Medeiros Garcia, 2006. "Performance Evaluation of Pension Funds Management Companies with Data Envelopment Analysis," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 9(2), pages 165-188, September.
    18. Dmitriy Karamov & Pavel Ilyushin & Ilya Minarchenko & Sergey Filippov & Konstantin Suslov, 2023. "The Role of Energy Performance Agreements in the Sustainable Development of Decentralized Energy Systems: Methodology for Determining the Equilibrium Conditions of the Contract," Energies, MDPI, vol. 16(6), pages 1-12, March.
    19. Yang, Ziyu & Li, Chengjiang & Wang, Honglei & Yang, Jing, 2025. "Dynamic evolution of electricity price transmission effects from electricity-carbon market coupling under tradable green certificate price regulation," Energy, Elsevier, vol. 334(C).
    20. Liu, Yin & Alnafrah, Ibrahim & Zhou, Yaying, 2024. "A systemic efficiency measurement of resource management and sustainable practices: A network bias-corrected DEA assessment of OECD countries," Resources Policy, Elsevier, vol. 90(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:342:y:2026:i:c:s0360544225053149. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.