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Is the Price Elasticity of Demand for Coal in China Increasing?

Paul Burke () and Hua Liao ()

CCEP Working Papers from Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University

Abstract: China's dependence on coal is a major contributor to local and global environmental problems. In this paper we estimate the price elasticity of demand for coal in China using a panel of province-level data for the period 1998-2012. We find evidence that provincial coal demand has become increasingly price elastic. As of 2012 we estimate that this elasticity was in the range -0.3 to -0.7 when responses over two years are considered. The results imply that China's coal market is becoming more suited to price-based approaches to reducing emissions. Our estimates suggest that the elimination of coal consumption subsidies could reduce national coal use and related emissions by around 2%.

Keywords: coal; price elasticity; demand; China; provincial (search for similar items in EconPapers)
JEL-codes: O13 Q41 P28 Q48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-cna, nep-ene and nep-env
Date: 2015-06
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https://ccep.crawford.anu.edu.au/sites/default/fil ... 2015-11/ccep1506.pdf

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Journal Article: Is the price elasticity of demand for coal in China increasing? (2015) Downloads
Working Paper: Is the price elasticity of demand for coal in China increasing? (2015) Downloads
Working Paper: Is the price elasticity of demand for coal in China increasing? (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:een:ccepwp:1506

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