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China’s CO emissions from power generating stations and the role of subsidies – a first exploration

Limin Du, Aoife Hanley and Katrin Rehdanz

Applied Economics Letters, 2016, vol. 23, issue 5, 332-335

Abstract: Our analysis is the first of its kind to explore patterns of subsidization and CO2 emissions in China’s electricity-producing sector. Applying data for all power plants across China and controlling for the age, capacity and location of generating stations, we find that plants attracting a higher government subsidy are also the plants generating a disproportionate share of CO2 emissions. This distortion is incongruent with China’s aspiration for a greener economy but may be eliminated if China delivers on its November 2013 announcement to review many industry subsidies on its way to a fully fledged market economy.

Date: 2016
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