Energy Economics and Climate Change

by

Andreas Oberheitmann, Chai Ni

• LAST REVIEWED: 26 May 2021
• LAST MODIFIED: 26 May 2021
• DOI: 10.1093/obo/9780199920082-0189

Introduction

Energy economics and global climate change–related issues are becoming more and more important in China. China is the world’s largest energy producer and consumer. The sustained growth of energy supply has provided an important boost to the country’s economic growth and social progress, while the rapid expansion of energy consumption has raised energy security concerns. At the same time, a still coal-dominated primary energy supply and a still growing economy lead to massive emissions of carbon dioxide (CO₂) and other greenhouse gases. During the past 100 years, the Earth’s climate has experienced significant changes characterized by global warming. This global trend is also happening on a regional scale in China. The impact of climate change on China’s agriculture and livestock breeding, forestry, water resources, coastal zones, and many other natural eco-systems is evident, such as sea level rise in the coastal areas, glacial retreat in northwestern areas, and the earlier arrival of the spring phenophase. More frequent extreme weather events are occurring, such as drought in the north and more frequent rainstorms and floods in the south. To cope with the existing negative impacts of climate change, the Chinese government is adopting climate change adaptation policy measures, such as early warning systems for floods in coastal cities. To avoid global climate change, at the same time, mitigation measures are being implemented, such as energy efficiency improvements and a primary energy mix change toward low or zero carbon energy carriers. In 2020, China’s national emission trading scheme in the power sector is on schedule to be launched, initially for coal- and gas-fired power plants of a certain minimum size. In contrast to other countries, hardly any climate change skeptics are found in China. The existence of anthropogenic climate change is widely accepted in this country.

General Overviews: Textbooks

Textbooks on energy economics, such as Goodstein and Intriligator 2013, give an overview of different energy-related issues. Based on the concept of energy balances, they provide insights into primary energy production (coal, oil, gas, and renewable and nuclear energy), trade (export and import) and storage (bunkers, etc.), transformation to secondary energies (such as electricity, mineral oil products, coke, etc.), and feedstock (e.g., in chemical industry), energy transport (power transmission and distribution, oil and gas pipelines, etc.) and energy consumption (agriculture, industry, commerce, private households, etc.). Publications such as Schwarz 2018 also treat economic issues, such as the scarcity of fossil energy sources, pricing, and the particularities of different energy markets (e.g., natural monopolies in power generation) as well as market reforms, such as the liberalization of grid-bound energy markets. Many textbooks also build a bridge to environmental economics (optimal environmental pollution, etc.), climate change mitigation (energy-related greenhouse gases, fuel switch to low-carbon or zero carbon energy sources) and local environmental policies (e.g., emissions of sulfur dioxide (SO₂), nitrous oxides (NO_X), and particulate matters (PM), etc.). Textbooks on climate change policies, such as Dessler 2016 and Lu and Weng 2015, provide an overview of the physics of climate change (long-term climate variability, greenhouse effect, tipping points, etc.), the impacts of climate change (increases in global mean temperatures, sea level rise, extreme weather events, etc.), and policies and measures to cope with the existing negative impacts of climate change (climate change adaptation) and the reduction of future climate change (climate change mitigation). Zhang 2016 and Zhu and Zhu 2015 provide theoretical and practical insights into energy and climate change economics. Lin and Mou 2014 focuses especially on the particularities of the different energy carriers.

• Dessler, Andrew. Introduction to Modern Climate Change. 2d ed. New York: Oxford University Press, 2016.

  Dessler’s textbook focuses on anthropogenic climate change and combines an introduction to the science of climate change with an introduction to non-science issues, such as economic issues and climate change mitigation and adaptation options.

• Goodstein, David, and Michael Intriligator. Climate Change and the Energy Problem: Physical Science and Economics Perspective. Singapore: World Scientific Publishing, 2013.

  The textbook provides an overview of climate change and energy issues. To address these problems, the authors suggest that we should not only consider the application of environmental science, but also develop integrating natural sciences and economics.

• Lin Boqiang林伯强and Mou Dunguo牟敦果, eds. Gaoji nengyuan jingjixue （国际能源经济学）. Beijing: Qinghua Daxue Chubanshe, 2014.

  The book covers traditional areas such as oil, gas, coal, and electricity. It also covers the latest developments in the international energy sector, including carbon trading markets and carbon finance, energy and carbon taxes, energy efficiency markets, new energy and renewable energy investment, and trends in financing.

• Lu Zhe刘哲 and Weng Zhangcen王章岑, eds. Xin nengyuan jingjixue（新能源经济学）. Beijing: Qinghua Daxue Chubanshe, 2015.

  The textbook gives a brief introduction about the types of new energy and the status of utilization in countries around the world, the authors also describe and analyze new energy demand and supply, investment and financing processes from the perspective of economics and gives some industry analysis.

• Schwarz, Peter Martin. Energy Economics, London: Routledge, 2018.

  The textbook provides an overview of energy production and use and builds a basis of energy policy decisions against the background of economic analysis. These decisions take into account different market forces and the goals of the energy policy triangle (cost efficiency, environmental friendliness, and security of supply).

• Zhang Huaming张华明. Nengyuan jingji lilun he shijian（能源经济理论与实践）. Beijing: Zhongguo Jinrong yu Jingji Chuanmei Chubanshe, 2016.

  This book establishes a relatively complete theoretical system of energy economy, introduces the theory of energy supply and demand and price theory, analyzes the specific situation of different types of energy markets, and discusses the relationship between energy and economic development and energy security.

• Zhu Su祝苏 and Zhu Heng朱恒, eds. Qihou bianqian jingjixue（气候变迁经济学）. Beijing: Qinghua Daxue Chubanshe, 2015.

  The textbook gives a detailed discussion about climate change economics. The basic situation of climate change and its economic influence is introduced in this book, and it partially gives comprehensive analysis of China’s agricultural modernization, China’s industrialization, and the impact of climate change on China’s social development.