Does electricity price reduction bring a sustainable development of business: Evidence from fine-grained industrial electricity consumption data in China. (1st June 2023)

• Record Type: Journal Article
• Authors: Deng, Nana; Wang, Bo; He, Liting; Liu, Jie; Wang, Zhaohua
• Is Part Of: Journal of environmental management. Volume 335(2023)
• Publication Date: 2023-06-01
• Subjects: Electricity price reduction -- Industrial electricity consumption -- Carbon leakage risk; Environmental policy -- Periodicals; Environmental management -- Periodicals; Environment -- Periodicals; Ecology -- Periodicals; 363.705
• DOI: 10.1016/j.jenvman.2023.117522
• Languages: English
• ISSNs: 0301-4797

Abstract

Abstract: This paper studies the impact of electricity price reduction policy on the economic activities and carbon emissions of different industries. Since 2018, the Chinese government has advocated reducing electricity price for industrial customers in order to alleviate the non-tax burden on businesses. Using monthly electricity consumption and user data from 2016 to 2019, we find that the electricity price reduction has significantly increased the industrial electricity consumption and users. Heterogeneity analyses show that the effect is greater in heavy polluted industries and industries in low and medium GDP regions. The results of threshold impact analysis show that the threshold value of heavy pollution industries was lower than that of general industry and commerce, while heavy pollution industries are more sensitive to electricity prices than general industries. Moreover, the reduction of electricity prices results in a higher percentage of carbon emissions growth in heavy pollution industries. Our result can also help the policymakers access the costs and benefits of electricity price reduction for industrial customers more accurately. Highlights: Electricity price reduction contributes to increase industrial activities and users. The effect on high polluted industries is larger than that of general industries. The promotion effect is better in medium and low GDP regions. A non-linear relationship exists between electricity price and consumption. The electricity reduction policy causes carbon leakage risk among industries.