Impacts of shifting China's final energy consumption to electricity on CO₂ emission reduction

Electrification is advocated by both academics and the Chinese government to control air pollution and promote productivity. However, the problem remains to be solved of how to achieve the trade-off between reducing CO₂ emissions and maintaining economic growth when switching from various fuels to electricity under the policy support. In view of this, after analyzing the effects of exogenous shocks in various fuel demands based on impulse response functions of several vector autoregression models, this paper measures the current and long-term impacts of electrification on GDP and CO₂ emissions. Finally, some typical cases of replacement of fossil-fueled appliances by electrical counterparts encouraged by the government are assessed. The main findings are: (1) Almost all of the exogenous shocks in fuel demands have positive effects on both GDP and CO₂ emissions, while the gas shock has a slightly negative effect on GDP; (2) Carbon intensity decreases and even CO₂ emission reductions with increased GDP are potentially achieved, in both current and permanent periods, for coal-electricity and oil-electricity switching, while gas-electricity switching is not a wise choice in view of CO₂ emission reduction in the long run; (3) The alternative electric appliances for electrification have very different impacts on CO₂ emission reduction.