Low-Carbon Power Sector Regulation: Options for China
The Chinese government has set a number of goals to reduce carbon emissions and coal consumption, and also has set closely related goals to improve air quality. The power sector will be central to any attempt to meet these goals in a cost-effective manner. However, the Chinese authorities have yet to establish a clear and comprehensive agenda for the power sector’s role in meeting emissions and environmental goals. This paper offers concrete options for framing power sector reforms to support carbon emissions reduction in a cost-effective, low-risk manner. Our recommendations are based on international experience and analysis of China’s conditions. This paper is a companion to the report Low-Carbon Power Sector Regulation: International Experience from Brazil, Europe, and the United States. We do not address all issues related to power sector reform, but instead focus on the most important topics for achieving carbon reduction goals. We offer recommendations for meeting carbon goals while providing reliable and affordable electricity services to a growing economy. Our recommendations are organized as they relate to six key areas that are relevant to emissions reduction: planning, end-use energy efficiency, generation operations and pricing, renewable resources, retail pricing, and emissions pricing.