An Intersectoral Assessment of the Impact of Removing Energy Subsidies in China

Lei Zhu and Yuan Li

Chapter 4 in Institutional Policy and Economic Impacts of Energy Subsidies Removal in East Asia, pp 61-82 from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: Energy subsidies are used in many countries, but their negative impacts are gradually being recognised. At the same time, energy price fluctuations may also have a negative influence on different sectors in China. In this study, we estimate the value of the energy subsidies and show that China’s total energy subsidy in 2010 was around CNY1,929.65 billion, accounting for 4.7 % of the country’s gross domestic product. Taking the iron and steel industry as an example, we analyse the impacts of removing the energy subsidy on industry competitiveness, emissions, welfare, and technology diffusion. We also analyse the joint impacts of removing the energy subsidy and implementing an emissions trading system. The results show that removing the energy subsidy would reduce CO2 emissions and increase social welfare. However, when combined with an emissions trading system, not all sectors would profit from the policy combination. Removing the energy subsidy would at the same time reduce the equilibrium CO2 price.

References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.eria.org/RPR_FY2015_No.23_Chapter_4.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:era:chaptr:2015-rpr-23-4

Access Statistics for this chapter

More chapters in Chapters from Economic Research Institute for ASEAN and East Asia (ERIA) Contact information at EDIRC.
Bibliographic data for series maintained by Ranti Amelia ( this e-mail address is bad, please contact ).