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With important implications for global climate change mitigation, the development of a cap-and-trade emission trading scheme (ETS) in China is embedded in distinctive political, economic, and institutional contexts and has been attracting increasing attention in recent years. To offer a clear perspective on current research progress, this paper systematically reviews the recent literature on China’s ETS from three main aspects: mechanism design, policy and regional linkages, as well as impact assessment. The current research consensuses are summarized based upon detailed literature analyses and commentaries, and together with observations of international experience and China’s actual condition, the paper provides policy proposals for the development of China’s national ETS during 2016–2020. Finally, several important controversies in the current literature are discussed with regard to the practical demands of China’s ETS development. Five pressing topics that need to be further studied in the coming years are highlighted, including cap setting, allowance allocation among sectors and enterprises, carbon pricing, policy package and unified carbon market construction, as well as ex-ante and ex-post impact assessments. [ABSTRACT FROM AUTHOR]

Abstract: Recently, energy production in China fell behind energy consumption. This poses important challenges for the rapidly growing Chinese economy. As a consequence, the causal relationship between energy consumption and GDP is an important empirical issue. This paper examines Granger causality between energy consumption and GDP in China using province-level data. The current paper extends the Granger causality analysis employed in previous studies by taking into account panel heterogeneity. Specifically, four different causal relationships are examined: homogeneous non-causality (HNC), homogeneous causality (HC), heterogeneous non-causality (HENC), and heterogeneous causality (HEC). HC and HNC hypotheses are rejected for causality in either direction, from GDP to energy or from energy to GDP, which implies that the panel made up of Chinese provinces is not homogeneous. Then, heterogeneous causality tests (HEC ad HENC) are conducted for each province. For the causality running from GDP to energy, 19 provinces exhibit HEC and 11 provinces exhibit HENC. For the causality running from energy to GDP, 14 provinces exhibit HEC and 16 provinces exhibit HENC. The results suggest that the Chinese government should incorporate a regional perspective while formulating and implementing energy policies. [Copyright &y& Elsevier]

This work investigates different scenarios for electric vehicle (EV) deployment in China and explores the implications thereof with regard to energy portfolio, economics and the environment. Specifically, we investigate how to better deliver the value of EVs by improving designs in the power system and charging strategies, given expected developments by 2030 in both the power system and EV penetration levels. The impact of EV charging is quantified by applying an integrated transportation-power system model on a set of scenarios which represent uncertainties in charging strategies. We find that deploying EVs essentially shifts the use of gasoline to coal-fired power generation in China, thus leading to more coal consumption and CO 2 emissions of the power system. Economically, EVs outperform gasoline-powered vehicles in terms of average fueling costs. However, the impact of EVs in terms of CO 2 emissions at the national level largely depends on the charging strategy. Specifically, controlled charging results in more CO 2 emissions associated with EVs than uncontrolled charging, as it tends to feed EVs with electricity produced by cheap yet low-efficiency coal power plants located in regions where coal prices are low. Still, compared with uncontrolled charging, controlled charging shows absolute advantages in: (1) mitigating the peak load arising from EV charging; (2) facilitating RES generation; and (3) reducing generation costs and EV charging costs. Hence, in light of this trade-off of controlled charging with the goals of energy security, economic efficiency and reducing environmental impacts, policy interventions in the Chinese power system should opt for controlled charging strategies in order to best realize the benefits of EVs. Accordingly, this paper proposes that increasing the use of cleaner forms of electricity generation, such as RES power and gas power, and establishing energy efficiency and CO 2 emission regulations in power dispatch are critical for China. Lastly, this work illustrates what the optimized charging profiles from the power system perspective look like for different regions. These results can inform Chinese policy makers in creating a better integration of the transportation and the power system. [ABSTRACT FROM AUTHOR]

Facing serious energy constraints and environmental challenges, policy makers in China have set up clear targets to reduce energy intensity in order to secure a sustainable economic growth; however, it is unclear in theory what the determining forces are. The empirical evidence, although intensively discussed in the literature, also remain divided in opinion. This paper contributes to the existing literature full of heated debates using a Bayesian averaging approach to identify robust determinants of energy intensity in China. Using provincial level data, key contributors that help explain the level of energy intensity across China are found. By ranking the relative importance of explanatory variables according to their posterior inclusion probabilities, this study can also offer support to policy makers in designing intensity reduction policies. It is suggested that policies should focus on those robust and relatively more important factors such as fiscal expenditure, infrastructure and economic structure. [ABSTRACT FROM AUTHOR]

Abstract: This paper provides evidence on the relevance of modeling the seasonal nature of electricity intensity across Chinese regions in a suitable manner with monthly data from 2003 to 2009. In contrast to previous works, this study relaxes the assumption of deterministic seasonality, allowing for time and regional variation in the Chinese economy. In doing so, unobserved-components models are used to analyze the type of seasonality – stochastic or deterministic – that prevails. Regional differences in the seasonal patterns and their evolution over time are also examined. Results provide new empirical evidence on the stochastic nature of electricity intensity in the majority of the provinces. In addition, we find four main effects as regards seasonal patterns: (i) Lunar New Year, (ii) Summer, (iii) Spring, and (iv) Winter effects. In the first two effects seasonality becomes positive, thus indicating that electricity intensity increases, and the last two are negative, showing improvements in the use of electricity per unit of output. However, differences are observed between northern regions and the east-south of China. In addition, once we control our estimates for temperature and prices, no significant differences are seen in the results. Conclusions from this analysis are useful for empirical modeling in the energy-economics literature, and also for designing energy policies to improve the efficiency of the use of energy resources across Chinese regions. [Copyright &y& Elsevier]

Abstract: This paper estimates the affordability of increased energy costs for Chinese companies due to the possible introduction of carbon pricing policies. The data were collected from 121 valid respondents in Taicang, China, using a multiple-bounded discrete choice (MBDC) format. Estimations indicate that a mean of 8.5% in energy cost increase would be acceptable for the surveyed companies on the whole. Companies from chemical and dyeing industries expressed a slightly higher affordability, with the mean of acceptable energy cost increase being 9.8% and 9.4% respectively. Econometric analysis identified two determinants of affordability for companies. One is the current energy price level, having a significant but negative relationship with affordability. The other is the energy management strategies of companies, significantly and positively associated with affordability. Calculations indicate that the mean of affordable energy cost increases for companies roughly equals a carbon price of 60 CNY/t-CO2 (about 9 USD/t-CO2). This result may be used as a referendum during the development of carbon tax policy and the establishment of a domestic carbon emissions trading scheme in China from the perspective of individual companies. [Copyright &y& Elsevier]

Abstract: Tiered electricity price (TEP) reform is a planning policy for household electricity conservation in China. Based on TEP, several price hierarchies are provided, and additional payment will be charged if the electricity consumptions exceed the upper bound of each hierarchy. Yet, the optimal level of each price tier and the institutions for implementing TEP need further research, which are set on the basis of considering residents’ affordability and willingness to pay. Therefore, this paper aims at exploring determinants of public willingness to accept TEP and finding out the acceptable range of premium. A questionnaire survey in four urban cities of China is conducted to collect data, and an ordinary regression model is adopted in our analysis to identify the drivers and barriers to general public’s acceptance of TEP. The results show that middle income earners are the groups that are mostly opposed to TEP. Rather than just focusing on economic factors, public environmental awareness should be highlighted during the implementation of TEP, because cost is not a statistically significant determinant in this study. Moreover, the public acceptable rate of premium of TEP in the urban cities, according to our research results, may be below .05RMB/kWh. [Copyright &y& Elsevier]

• China's Nationally Determined Contributions do not comply with the Paris Agreement. • Overall coal usage needs to decrease by 60% (2 °C) or even 100% (1.5 °C) by 2050. • 100% Renewable energies are cost-efficient to decarbonize the electricity sector. • Sector coupling increases the electricity demand by 100% (2 °C) to 400% (1.5 °C). • Incentives for local actors are needed for a sustainable low-carbon transformation. Growing prosperity among its population and an inherent increasing demand for energy complicate China's target of combating climate change, while maintaining its economic growth. This paper, therefore, describes three potential decarbonization pathways to analyze different effects for the electricity, transport, heating, and industrial sectors until 2050. Using an enhanced version of the multi-sectoral, open-source Global Energy System Model, enables us to assess the impact of different CO 2 budgets on the upcoming energy system transformation. A detailed provincial resolution allows for the implementation of regional characteristics and disparities within China. Conclusively, we complement the model-based analysis with a quantitative assessment of current barriers for the needed transformation. Results indicate that overall energy system CO 2 emissions and in particular coal usage have to be reduced drastically to meet (inter-) national climate targets. Specifically, coal consumption has to decrease by around 60% in 2050 compared to 2015. The current Nationally Determined Contributions proposed by the Chinese government of peaking emissions in 2030 are, therefore, not sufficient to comply with a global CO 2 budget in line with the Paris Agreement. Renewable energies, in particular photovoltaics and onshore wind, profit from decreasing costs and can provide a more sustainable and cheaper energy source. Furthermore, increased stakeholder interactions and incentives are needed to mitigate the resistance of local actors against a low-carbon transformation. [ABSTRACT FROM AUTHOR]

Abstract: The last decade has seen a surging demand for biofuels in the wake of increasing oil prices and rising environmental concerns. The most common biofuel is bio-ethanol accounting for more than 90% of total biofuel usage. It is increasingly produced from sugar cane making cane a strategic crop for biofuels. Given the growing demand for “green” fuels, bio-ethanol production has been supported by energy policies in the past decade, which have consequently been accused of contributing to the global trend of rising food prices and thus jeopardising food security. However, while biofuel policies are an important driver, prices as much as food security will ultimately be determined by supply constraints of strategic crops. This paper hence investigates drivers of and constraints to sugar cane production in China and India and shows that supply side constraints vary significantly in the two countries. China and India both face serious limitations with regard to suitable available land for the further expansion of sugar cane production. Equally they are both faced with challenges to increasing yield output per hectare, albeit different ones. With regard to productivity, China achieved 2.7% annual yield growth since 1997, while India has seen yield decreases of −0.1%p.a. over the same period. The authors conclude that cane used as a feedstock to meet the rising energy demand will come at the expense of converting fertile land for non-food purposes. [Copyright &y& Elsevier]