Positive synergy or negative synergy: An assessment of the carbon emission reduction effect of renewable energy policy mixes on China's power sector

Abstract

To reduce carbon emissions in China's power sector, a variety of renewable energy policy options have been introduced, which are expected to produce synergistic effects. This study used a continuous difference-in-differences model to evaluate the individual and synergistic effects of renewable energy policies on the carbon emission reduction of China's power sector. The results showed that renewable energy policies can achieve the target of decarbonizing China's power sector, with the feed-in tariffs proving to be particularly effective. The mix of feed-in tariffs, carbon emissions trading, and R&D subsidies can achieve the largest positive synergistic effects. In addition, any renewable energy policy mix (REPM) including tradable green certificates had no synergistic effect, and that there were no REPMs with negative synergy. The synergetic effect of REPMs decreased with the increase in policy diversity. This study provided a clearer understanding on the differentiated impacts of these policies and their mixes. Meanwhile, we propose to continue implementing the REPM in a continuing manner, and emphasize to focus on the complementary policies to maximize the synergies of policy mixes, such as introducing renewable portfolio standards when implementing tradable green certificates.