Journal Article

China’s CO2 Emissions from Power Generating Stations and the Role of Subsidies – A First Exploration

Applied Economics Letters, 5 (23): 332-335

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.


Limin DU
Katrin Rehdanz - Kiel Institute
Katrin Rehdanz


Publication Date
JEL Classification
Q48, Q53

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