Regional Disparities, Spatial Effects, and the Dynamic Evolution of Distorted Energy Prices in China

The distortion of energy prices has become an important obstacle to the high-quality development of China’s economy. Moreover, energy price distortions are not merely a domestic issue. They may trigger carbon leakage by diverting emissions-intensive production to countries with cheaper energy. Although the existing literature has extensively examined the effects of energy price distortions, two significant research gaps remain. First, most studies treat energy price distortions merely as an influencing factor, lacking a systematic analysis that places it at the core. Second, the spatial correlation characteristics of energy price distortions are often overlooked. This study measures the degree of energy price distortions across Chinese provinces from 2000 to 2022 and employs methods such as the Global Moran’s I, Local Moran’s I, and kernel density estimation to systematically analyze the spatial correlation, spatial distribution of coordination indices, and dynamic evolution patterns of these distortions. The results reveal that: (1) the overall degree of energy price distortions in China exhibited a trend of rising first and then declining, with significant regional disparities; (2) the regional gap followed an “expansion-contraction” trajectory; (3) there is notable spatial autocorrelation, with high-distortion areas concentrated in Northeast China, the middle reaches of the Yellow River, and Northwest China; and (4) the dynamic evolution suggests that distortion levels in high- and medium-value regions may continue to decline, while those in low-value regions may increase. This study fills a critical gap in the systematic spatial analysis of energy price distortions and provides new empirical evidence and policy insights for advancing market-oriented reforms in energy markets.