Impacts of Clean Energy Substitution for Polluting Fossil-Fuels in Terminal Energy Consumption on the Economy and Environment in China

Bo Yuan,Teng Huang,Hao Chen,Jiachuan Chen,Ling He,Qi Cui

doi:10.3390/su11226419

Abstract

China has initiated various dedicated policies on clean energy substitution for polluting fossil-fuels since the early 2010s to alleviate severe carbon emissions and environmental pollution and accelerate clean energy transformation. Using the autoregressive integrated moving average (ARIMA) regression, we project the potentials of substituting coal and oil with clean energy for different production sectors in China toward the year 2030. Based on the projections, a dynamic multi-sectoral computable general equilibrium model, CHINAGEM, is employed to examine: the impacts of future clean energy substitution on China’s energy production, outputs of non-energy sectors, macro-economy, and CO2 emissions. First, we found that most production sectors are projected to replace polluting fossil-fuels with clean energy in their terminal energy consumption in 2017–2030. Second, clean energy substitution enables producing green co-benefits that would enable improvements in energy production structure, reductions in national CO2 emissions, and better real GDP and employment. Third, technological progress in non-fossil-fuel electricity could further benefit China’s clean and low-carbon energy transformation, accelerating the reduction in CO2 emissions and clean energy substitution. Furthermore, the most beneficiary are energy-intensive and high carbon-emission sectors owing to the drop in coal and oil prices, while the most negatively affected are the downstream sectors of electricity. Through research, various tentative improvement policies are recommended, including financial support, renewable electricity development, clean energy utilization technology, and clean coal technologies.

Highlights

China’s energy production and consumption structures have long been dominated by coal and oil, which are the main air pollution and carbon-emission sources [1,2,3]
The fossil-fuel dominated energy structure has thereby led to severe carbon emissions and air pollution problems, because more than 95% of national CO2 emissions could be attributed to coal and oil combustion [11]
To meet the goal of alleviating severe carbon emissions and environmental pollution and accelerating clean transformation of energy consumption, China has initiated a series of policies on clean energy substitution for polluting fossil-fuels since the early 2010s

Summary

Introduction

China’s energy production and consumption structures have long been dominated by coal and oil, which are the main air pollution and carbon-emission sources [1,2,3]. The proportions of coal and oil in the total energy production reached 77% and 9% in 2016, respectively, whereas the overall proportion of clean energy (i.e., gas and electricity) accounted for merely 14%. After the Paris Agreement, China’s government promised to reduce its carbon emissions by raising the proportions of gas and electricity in the total energy consumption to 15% and 20% by 2030, respectively. Achieving this goal demands continuous massive efforts in accelerating clean transformation of China’s energy consumption in coming decades

Objectives

Methods

Results

Conclusion