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GTAP Resource #4248

"Increasing Chinas Coal-fired Power Generation Efficiency - Impact on Chinas Carbon Intensity and the Broader Economy to 2020"
by Feng, Shenghao and Mai Yinhua

Despite pessimism in the progress of global climate change negotiations, efficiency improvements at industry and national levels are quietly contributing to a slower growth in CO2 emission. In this study we investigated the case of coal using efficiency in coal-fired electricity generation in China. We found that investment in improving coal-using efficiency in coal-fired electricity generation leads to both a faster growth in real GDP and a slower growth in the ratio of CO2 emission to GDP. However, as China is rapidly closing the efficiency gap with international best practice, this instrument alone will not be sufficient for China to achieve its emission reduction target.

In this study we use a dynamic CGE model of China to analyse the effects of improving coal using efficiency in coal fired electricity generation. We analysed the following scenarios:
1. A baseline projection according to historical trend;
2. Various potential scenarios of improving coal using efficiency in coal fired power generation;
3. Investment required to achieve the improvement in efficiency; and
4. Financing the investment required for the improvement in efficiency.

The simulation results shows that investment in improving coal using efficiency in coal fired electricity generation leads to a faster growth in real GDP due to the productivity improvement and resulted faster growth in capital employed in current production. Despite this rebound effect, the investment in the efficiency improvement still leads to an overall reduction in CO2 emission, resulting in an overall reduction in emission to GDP ratio.

The efficiency scenarios in Section 2 show that given the current predictions of technological advancement it is unlikely that China’s coal-fired power plants are going to enjoy the same rate of efficiency improvement in the coming 10 years as they did over the past 10. This is partly because China was able to phase out small and inefficiency old power plants in the pa...

Resource Details (Export Citation) GTAP Keywords
Category: 2013 Conference Paper
Status: Published
By/In: Presented at the 16th Annual Conference on Global Economic Analysis, Shanghai, China
Date: 2013
Created: Yinhua, M. (4/16/2013)
Updated: Yinhua, M. (4/16/2013)
Visits: 1,536
- Baseline development
- Dynamic modeling
- Climate change policy
- Economic growth
- Asia (East)

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