Uncovering the socioeconomic impacts of China's power system decarbonization

Abstract

Deep decarbonization in the power sector is one of the key pillars of the carbon-neutral energy system, while its socioeconomic benefits remain unexplored. We integrate a multi-regional input-output model with a multiplier acceleration model to simulate the impacts of China's power decarbonization ambitions on the economy, employment, and greenhouse gas (GHG) emissions. Two scenarios are set to simulate the socio-economic impacts of China's decarbonization in 2030 and 2050, respectively. Increasing penetration of clean power substantially decreases GHG emissions. However, without the basis of adequate socioeconomic policy, this transition may not benefit the sustainable development of the economy and employment. The GHG emissions in 2030 decreases by 15.22% compared with 2015 in China's power decarbonization investment scenario. Meanwhile, decarbonization creates inclusive growth in employment (1.02%) and the economy (1.21%). However, the renewable power sector creates 0.43 million jobs, whereas direct and indirect job losses total 2.04 million (fossil fuel power sector) and 19.18 million (construction, machinery manufacturing, chemicals, and coal mining sectors) in 2050 China's NZEE (net-zero emissions in the electricity sector) scenario. Middle-skilled workers account for 74.46% of total job losses, with a higher impact on males (67.37%) than on females (32.63%). China's overall economic loss from the transition is approximately 209.36 billion euros, though renewable power contributes 110.69 billion euros to economic growth. The direct GHG emissions reduction from the retirement of fossil fuel electricity eliminates the majority of total GHG emissions (89.65%). The results from this study have enormous implications for other countries that strive for their own decarbonization goals. The economic and employment consequence of the decarbonization of the electricity sector indicate that the government and policy makers should focus on establishing long-term economic stimulus policies and offering pre-vocational worker education to ensure sustainable socioeconomic development.