Have Market-oriented Reforms Decoupled China’s CO2 Emissions from Total Electricity Generation? An Empirical Analysis

Achieving the decoupling of electric CO2 emissions from total electricity generation is important in ensuring the sustainable socioeconomic development of China. To realize this, China implemented market-oriented reforms to its electric power industry at the beginning of 2003. This study used the Tapio decoupling index, the Laspeyres decomposition algorithm, and decoupling-related data from 1993 to 2012 to evaluate the effect of these reforms. Several conclusions can be drawn based on the empirical analysis. (1) The reforms changed the developmental trend of the decoupling index and facilitated its progress towards strong decoupling. (2) The results forecasted through fitting the curve to the decoupling index indicate that strong decoupling would be realized by 2030. (3) Limiting the manufacturing development and upgrading the generation equipment of the thermal power plants are essential for China to achieve strong decoupling at an early date. (4) China should enhance regulatory pressures and guidance for appropriate investment in thermal power plants to ensure the stable development of the decoupling index. (5) Transactions between multiple participants and electricity price bidding play active roles in the stable development of the decoupling index.