Impacts of total energy consumption control and energy quota allocation on China’s regional economy based on a 30-region computable general equilibrium analysis

This paper examined the impacts of the total energy consumption control policy and energy quota allocation plans on China's regional economy. This research analyzed the influences of different energy quota allocation plans with various weights of equity and efficiency, using a dynamic computable general equilibrium (CGE) model for 30 province-level administrative regions. The results show that the efficiency-first allocation plan costs the least but widens regional income gap, whereas the outcomes of equity-first allocation plan and intensity target-based allocation plan are similar and are both opposite to the efficiency-first allocation plan' outcome. The plan featuring a balance between efficiency and equity is more feasible, which can bring regional economic losses evenly and prevent massive interregional migration of energy-related industries. Furthermore, the effects of possible induced energy technology improvements in different energy quota allocation plans were studied. Induced energy technology improvements can add more feasibility to all allocation plans under the total energy consumption control policy. In the long term, if the policy of the total energy consumption control continues and more market-based tools are implemented to allocate energy quotas, the positive consequences of induced energy technology improvements will become much more obvious.