Exploring the potential of introducing technology innovation and regulations in the energy sector in China: a regional dynamic evaluation model

Abstract The Chinese government has introduced stricter environmental regulations to address the rapid increase in Greenhouse gas (GHG) emissions and environmental deterioration associated with energy demand. In this research we analyze the potential environmental and socio-economic benefits of introducing such regulations coupled with the promotion of advanced technological innovation for power generation. We selected Chongqing city, one of the most polluted cities in China, as the case study. The study proposes 5 scenarios that range from baseline to technology promotion through the introduction of carbon tax and subsidy schemes and the implementation of regulations for regional air emissions reduction. We constructed a dynamic evaluation model based on an Input–Output (I/O) analysis for the period 2010–2025. The results show an overall benefit on the quality of the environment and energy conservation efforts. The study demonstrates that the introduction of regulations without promotion of technological innovation will dramatically affect economic growth. The results also show that innovations in the energy sector alone will reduce both air pollutants and energy intensity to a certain extent. In this regard the promotion of innovation in other economic sectors is necessary. Another important finding is the fact that the introduction of regulations will actually curb air emissions and energy consumption. This research provides a strong platform for policy makers to realize the urgency and importance of promoting technology innovation through environmental regulations.

[1]  Shinichiro Fujimori,et al.  Assessment of China's climate commitment and non-fossil energy plan towards 2020 using hybrid AIM/CGE model , 2011 .

[2]  Peter D. Blair,et al.  Input-Output Analysis , 2021 .

[3]  H. Wilting.  An energy perspective on economic activities , 1996 .

[4]  Kejun Jiang,et al.  Policy Options for Low‐Carbon Power Generation in China: Designing an Emissions Trading System for China's Electricity Sector , 2012 .

[5]  Nick Johnstone,et al.  Effects of Environmental Policy on the Type of Innovation: The Case of Automotive Emissions Control Technologies , 2008 .

[6]  David Popp,et al.  International Innovation and Diffusion of Air Pollution Control Technologies: The Effects of Nox and So2 Regulation in the Us, Japan, and Germany , 2004 .

[7]  A. Baranzini,et al.  A future for carbon taxes , 2000 .

[8]  Shinichiro Fujimori,et al.  The impacts of China’s household consumption expenditure patterns on energy demand and carbon emissions towards 2050 , 2012 .

[9]  W. Leontief.  structure of American economy, 1919-1929 , 1941 .

[10]  J. Shoven,et al.  Applying general equilibrium , 1993 .

[11]  Kebin He,et al.  Integrating mitigation of air pollutants and greenhouse gases in Chinese cities: development of GAINS-City model for Beijing , 2013 .

[12]  Manfred Lenzen,et al.  Examining the global environmental impact of regional consumption activities — Part 2: Review of input–output models for the assessment of environmental impacts embodied in trade , 2007 .

[13]  Dianne Rahm,et al.  Regulating hydraulic fracturing in shale gas plays: The case of Texas , 2011 .

[14]  Helmut Yabar,et al.  The pathway to a sustainable industrial society – initiative of the Research Institute for Sustainability Science (RISS) at Osaka University , 2006 .

[15]  P. Berck,et al.  Assessing the Employment Impacts of Environmental and Natural Resource Policy , 2002 .

[16]  Frank Jotzo,et al.  China Carbon Pricing Survey 2013 , 2013 .

[17]  Aie,et al.  Energy Technology Perspectives 2010 , 2009 .

[18]  Aie.  World Energy Outlook 2011 , 2011 .

[19]  David J. Wright,et al.  3. Good and services: an input-output analysis , 1974 .

[20]  David Popp,et al.  Policies for the Development and Transfer of Eco-Innovations: Lessons from the Literature , 2009 .

[21]  M. Thring.  World Energy Outlook , 1977 .

[22]  Zongguo Wen,et al.  Best available techniques and pollution control: a case study on China’s thermal power industry , 2012 .

[23]  Qiang Liu,et al.  New power generation technology options under the greenhouse gases mitigation scenario in China , 2009 .

[24]  Wassily Leontief.  Input-Output Economics , 1966 .

[25]  Hengwei Liu,et al.  A review of clean energy innovation and technology transfer in China , 2013 .

[26]  Manuel Alejandro Cardenete,et al.  The economic influence of photovoltaic technology on electricity generation: A CGE (computable general equilibrium) approach for the Andalusian case , 2014 .

[27]  T. Nakata,et al.  Analysis of the market penetration of clean coal technologies and its impacts in China's electricity sector , 2009 .

[28]  C. Bullard,et al.  The energy cost of goods and services , 1975 .

[29]  Qian Shi,et al.  Identifying the underpin of green and low carbon technology innovation research: A literature review from 1994 to 2010 , 2013 .

[30]  Helmut Yabar,et al.  Energy intensity trends and scenarios for China’s industrial sectors: a regional case study , 2011 .

[31]  Tsuyoshi Fujita,et al.  The long-term impacts of air pollution control policy: historical links between municipal actions and industrial energy efficiency in Kawasaki City, Japan , 2013 .

[32]  Helmut Yabar,et al.  Tracking environmental innovations and policy regulations in Japan: case studies on dioxin emissions and electric home appliances recycling , 2013 .

[33]  Qian Zhou,et al.  Comprehensive Analysis of the Environmental Benefits of Introducing Technology Innovation in the Energy Sector: Case Study in Chongqing City, China , 2013 .

[34]  Rui Cunha Marques,et al.  Public–private partnerships for wind power generation: The Portuguese case , 2011 .