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The Impact of Renewable Energy Subsidy Policies on Indirect Carbon Emissions in the Power System

Author

Listed:
  • Yuanying Chi
  • Chenfeng Zhang
  • Mengwan Zhang
  • Yanzhao Zhang
  • Yuxi Wu

Abstract

As a core policy instrument for low-carbon transition in China's power systems, the mechanism through which renewable energy subsidies mitigate indirect carbon emissions remains underexplored. This study empirically examines the impact of renewable energy generation subsidy policies on indirect carbon emissions in power systems using panel data from 30 Chinese provinces (2011-2020). The findings reveal that: (1) Renewable energy subsidies directly suppress indirect carbon emissions and reduce emissions indirectly by curbing energy consumption. (2) Regional heterogeneity shows stronger emission reduction effects in central and western China due to heavy industry agglomeration and reliance on electricity transmission. (3) Electricity consumption heterogeneity indicates significant emission reductions in medium-to-high consumption areas constrained by rigid energy demand. Policy recommendations include establishing a dynamic subsidy mechanism for central/western China, implementing "energy storage-quota" differentiated strategies for high/low consumption areas, and reorienting subsidies toward technological innovations such as hydrogen energy and energy storage. JEL classification numbers: P28.

Suggested Citation

  • Yuanying Chi & Chenfeng Zhang & Mengwan Zhang & Yanzhao Zhang & Yuxi Wu, 2025. "The Impact of Renewable Energy Subsidy Policies on Indirect Carbon Emissions in the Power System," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 15(4), pages 1-3.
    • Handle: RePEc:spt:admaec:v:15:y:2025:i:4:f:15_4_3
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    References listed on IDEAS

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    JEL classification:

    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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