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Open AccessArticle

On the Effectiveness of the Abatement Policy Mix: A Case Study of China’s Energy-Intensive Sectors

by Xin Liu 1,2, Yuan Li 3, Dayong Zhang 4,* and Lei Zhu 5,*
1
Institutes of Science and Development, Chinese Academy of Sciences, Beijing 100190, China
2
School of Public Policy and Management, University of Chinese Academy of Sciences, Beijing 100049, China
3
Economics and Development Research Institute, SINOPEC, Beijing 100029, China
4
Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu 611130, China
5
School of Economics and Management, Beihang University, Beijing 100191, China
*
Authors to whom correspondence should be addressed.
Energies 2018, 11(3), 559; https://doi.org/10.3390/en11030559
Received: 20 November 2017 / Revised: 15 February 2018 / Accepted: 22 February 2018 / Published: 6 March 2018
(This article belongs to the Special Issue Lessons from the Evaluation of Existing Emission Trading Schemes)
To achieve carbon emissions control targets, policymakers often need a basket of policies to account for the complexity of abatement. The instruments in the policy mix are often interconnected. It is of great importance to study how different abatement policies perform in practice—in other words, to evaluate the effectiveness of the abatement policy mix. This paper builds a multisector partial equilibrium model and then studies the policy effectiveness using data from two energy-intensive sectors in China, namely, the iron and steel sector and the cement sector. The results show clear evidence that these policies interact, and the policy mix is not a simple aggregation but rather differs across sectors, which leads to fundamentally different scenarios in terms of energy savings, emissions reductions and production behaviors. Energy-savings subsidies can increase production and profit with a lower equilibrium level of carbon prices, whereas output-based rebating of allowances reduces production and is associated with higher carbon prices. View Full-Text
Keywords: abatement policy mix; emissions trading; energy-intensive sectors; output-based rebates; subsidies abatement policy mix; emissions trading; energy-intensive sectors; output-based rebates; subsidies
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Liu, X.; Li, Y.; Zhang, D.; Zhu, L. On the Effectiveness of the Abatement Policy Mix: A Case Study of China’s Energy-Intensive Sectors. Energies 2018, 11, 559.

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