Adjusting productivity measures for CO2 emissions control: Evidence from the provincial thermal power sector in China

Bin Chen and Yingmei Jin

Energy Economics, 2020, vol. 87, issue C

Abstract: We examine productivity changes by the types of environmental regulations used to control CO2 emissions in the provincial, thermal power sector of China from 2009 to 2016. We derive a Törnqvist-type productivity index in which CO2 emissions are undesirable outputs. The shadow price of CO2, required for calculating the index, is estimated based on the duality between a revenue and a directional output distance function. Productivity changes are measured using both estimated shadow prices and the actual trading prices of CO2 in six pilot emissions trading systems. We find that productivity measurement is highly dependent on the choice of CO2 prices. We also investigate the impact of emission intensity and emissions per se on productivity measurement. We show that productivity measurement depends on the choice of environmental standard.

Keywords: CO2 emission; Productivity change; Marginal abatement cost; Thermal power sector (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:87:y:2020:i:c:s0140988320300463

DOI: 10.1016/j.eneco.2020.104707

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