| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 1734743 | Energy | 2011 | 8 Pages |
The Chinese government canceled the preferential power pricing policies for energy intensive industries and imposed a reverse differential pricing policy in order to promote energy efficiency and the adjustment and upgrading of the industrial structure. This article analyzes the principles of China’s differential power pricing policy, the externalities of energy and the modified Ramsey pricing rule, and also points out the policy implications of China’s differential power pricing policy. In our samples, we investigate eight power intensive products in the Henan province with respect to their power consumption per unit (power intensity), electricity cost, total cost, the electricity tariff and profit, in order to test the effects of the differential power pricing policy. The results show that the primary effect of the differential power pricing policy is that enterprises decrease their total costs and improve their productive efficiencies in advance, in anticipating a higher electricity tariff.
Research highlights► The article suggests a modified Ramsey pricing model where demand elasticity is replaced by elasticity of energy consumption and polluting elasticity to internalize the negative externality of high energy intensive industry. ► The article assesses the effects of differential pricing policy through on-site survey of high energy intensive industries in Henan province and analyzes the reasons behind those effects. ► The article presents the lessons and policy implications of implementing differential pricing policy aimed at energy conservation and emission reduction.
