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Consumer Demand, Pollutant Emissions and Public Health under Increasing Block Tariffs and Time-of-Use Pricing Policies for Household Electricity in China

Ling-Yun He, Li Liu, Yu Ouyang and Lanlan Li

Emerging Markets Finance and Trade, 2020, vol. 56, issue 13, 2993-3014

Abstract: In China, the proportion of coal power generation is too high, resulting in a conflict between the power generation structure and energy conservation and emission reduction. The pricing policy is an effective economic means of guiding consumer behaviors. Therefore, from the perspective of consumer demand, we use demand systems to study the consumer responses to different electricity price policies under three scenarios, to analyze the impact of changes in electricity prices on pollution emissions and public health. The results of elasticities show that TOU-IBTs in peak-periods in urban and rural areas are most flexible. The results of the scenario analyses show that taking into account the pollution emissions and public health, the gap of electricity tariff among different blocks should be limited, and that the coverage percentage is important in residential electricity consumption. Furthermore, based on the income levels and electricity consumption of different users, the electricity price policy reform should be taken to guide consumers to conserve electricity and reduce extravagant electricity consumption. Our framework, to the best of our knowledge, is the first attempt to quantify the mechanisms among electricity demand, pollution emission, and public health.

Date: 2020
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DOI: 10.1080/1540496X.2018.1545643

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