Optimal quota in China's energy capping policy in 2030 with renewable targets and sectoral heterogeneity

China has announced to strengthen its climate target by peaking carbon emissions before 2030 and aim to achieve carbon neutrality before 2060. The energy capping policy is one of the most important policies for low-carbon transition in China. Accordingly, China proposed the energy caps on controlling total consumption within 6 billion tons of coal equivalence by 2030, while increasing the share of non-fossil energy consumption to nearly 20%. Provinces are the ones who implement the capping policies. Whether or not provinces are able to achieve the caps at a cost-effective way largely depends on the effectiveness of allocation scheme. This paper explores an allocation scheme over provinces using the non-linear optimization method, paying particular attention to the significant sectoral heterogeneities among provinces which differ a lot in input-output structure and energy reduction potentials. The results indicate that the provinces with higher initial energy efficiencies can get more energy consumption quotas. Meanwhile, the provinces whose shares of renewable energy consumption are lower than the national average level should increase their renewable energy consumption to optimize their energy structure. This paper provides insights on achieving the goals of carbon peak and carbon neutrality by improving the energy capping policy. (c) 2021 Elsevier Ltd. All rights reserved.

Automated summary

China has announced its goal of peaking carbon emissions before 2030 and achieving carbon neutrality before 2060, with the implementation of the energy capping policy. Provinces play a key role in achieving the caps, relying on an effective allocation scheme to optimize energy structure and improve energy efficiency.