Synergistic cost-benefit analysis of emission trading schemes and renewable portfolio standards in China

Xiurong Hu, Peier Li, Huihuang Wu, Hongyang Du and Qunwei Wang

Energy, 2025, vol. 322, issue C

Abstract: In China, the Emission Trading System (ETS) and Renewable Portfolio Standards (RPS) are key to achieving a low-carbon transition, yet a comprehensive cost-benefit analysis of their joint implementation is lacking. To address this gap, we developed a China Economy-Energy-Environment Model (CEEEM) to assess economic, climate, and health effects under ETS, RPS, and their combined RPS_ETS scenario. Our findings indicate that combining ETS with RPS effectively reduces fossil fuel use and supports energy transition. This integration lowers carbon and Green Electricity Certificates (GECs) prices, cuts policy costs, and boosts net benefits by 34.8 % compared to ETS alone. Besides, the combined policy reduces regional disparities, economically developed regions like Shanghai, Zhejiang, and Beijing face higher costs for green certificates, while provinces with abundant renewable energy resources such as Yunnan and Inner Mongolia see significant gains. This highlights the need for tailored strategies to address regional differences and ensure equitable outcomes in the energy transition.

Keywords: Emission trading scheme; Renewable portfolio standards; Economic-energy-environment model; Cost and benefit analysis (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:322:y:2025:i:c:s0360544225009715

DOI: 10.1016/j.energy.2025.135329

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