Evaluation of consumption preference in China under environmental regulation policies: Scenario analysis based on a DECGE model

Consumption preference can affect the regional industrial structure and then the energy market. Taking China as an example, this paper constructs a dynamic energy computable general equilibrium (DECGE) model with knowledge capital to explain the effect of consumption preference on energy environment under the environmental regulation. We set three different consumption preference scenarios to conduct policy simulation. The results show that there are great differences in CO2 emission trends and energy consumption structure between different scenarios. China's current consumption preference cannot guarantee achievement of 2030 energy target. Environmental regulation policy would be helpful to the control of emissions. However, the policy effectiveness of environmental regulation will be affected by consumption preference. Moreover, consumption preference is the decisive factor affecting the industrial structure. And the adjustment of industrial structure will lead to the change of industrial energy consumption structure in China. Under the dual influence of environmental regulation and consumption scale effects, the knowledge capital and energy efficiency of energy intensive industry will be further improved. Our results reveal that the consumption preference and energy environment have synergistic effect. Although optimizing consumption structure cannot guarantee the realization of all energy targets, it will reduce the difficulty for the region to achieve these goals.

Automated summary

The study reveals that consumption preference has a significant impact on energy environment and industrial structure. Environmental regulation policies can help to control emissions, but their effectiveness is influenced by consumption preference.