Economic, energy and environmental impact of coal-to-electricity policy in China: A dynamic recursive CGE study

Abstract

In north China, many rural and urban residents still use coal for heating in winter. However, such method would result in a large amount of GHG emissions. China intends to change the heating method of its citizens from coal burning to electric heating to save energy, reduce emissions, which is called the project of Coal to Electricity (CtE). A dynamic recursive computable general equilibrium model is applied to analyze the real effect if the project is widely promoted in China. We found that CtE project is effective in reducing SO2 and NOx emission than CO2 emissions. In essence, energy substitution is not energy-saving, so the contribution to CO2 reduction of CtE project is limited. There is a certain co-benefit between CtE project and other energy saving policies (new energy generation, improving heating efficiency and building energy saving etc.). The findings indicate that single CtE policy can only bring better air quality. However, with other energy saving policies, CtE project can not only bring NOx and SO2 reduction, but also lead to less CO2 emissions and more convenient life. Multiple emission reduction measures are suggested to maximize the reduction effects of these policies.