Can electrification mitigate the marginal cost of carbon emission abatement? Evidence from China

Hui Chen and Yongqing Wang

Utilities Policy, 2025, vol. 93, issue C

Abstract: Our study assesses the impact of China's electrification rate on the marginal cost of carbon emission abatement. Employing the linear econometric model with squared terms and the spatial Durbin model, we reveal an inverted U-shaped non-linear relationship between electrification and marginal abatement costs of the local and neighboring areas, with the turning point corresponding to an electrification rate of 31.34% and 19.60% respectively. In short, increased electrification helps mitigate marginal abatement costs. Moreover, we also observed that the differences in electricity supply and demand significantly affect the causal relationship between electrification and marginal abatement costs.

Keywords: Electrification; Marginal abatement costs; Energy consumption structure (search for similar items in EconPapers)
JEL-codes: A10 B22 C10 C21 O47 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:93:y:2025:i:c:s0957178724001772

DOI: 10.1016/j.jup.2024.101883

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