The Policy Choice and Economic Assessment of High Emissions Industries to Achieve the Carbon Peak Target under Energy Shortage—A Case Study of Guangdong Province

Abstract

In recent years, due to the rise in energy prices and the impact of COVID-19, energy shortages have led to unsafe power supply environments. High emissions industries which account for more than 58% of the carbon emissions of Guangdong Province have played an important role in achieving the carbon peak goal, alleviating social energy shortage and promoting economic growth. Controlling high emissions industries will help to adjust the industrial structure and increase renewable energy investment. Therefore, it is necessary to comprehensively evaluate the policies of energy security and the investments of high emission industries. This paper builds the ICEEH-GD (comprehensive assessment model of climate, economy, environment and health of Guangdong Province) model, designs the Energy Security scenario (ES), the Restrict High Carbon Emission Sector scenario (RHS) and the Comprehensive Policy scenario (CP), and studies the impact of limiting high emissions industries and renewable energy policies on the transformation of investment structure, macro-economy and society. The results show that under the Energy Security scenario (ES), carbon emissions will peak in 2029, with a peak of 681 million tons. Under the condition of ensuring energy security, the installed capacity of coal-fired power generation will remain unchanged from 2025 to 2035. Under the Restrict High Carbon Emission Sector scenario (RHS), the GDP will increase by 8 billion yuan compared with the ES scenario by 2035. At the same time, it can promote the whole society to increase 10,500 employment opportunities, and more investment will flow to the low emissions industries. In the Comprehensive Policy scenario (CP), although the GDP loss will reach 33 billion yuan by 2035 compared with the Energy Security scenario (ES), the transportation and service industries will participate in carbon trading by optimizing the distribution of carbon restrictions in the whole society, which will reduce the carbon cost of the whole society by more than 48%, and promote the employment growth of 104,000 people through industrial structure optimization. Therefore, the power sector should increase investment in renewable energy to ensure energy security, limit the new production capacity of high emissions industries such as cement, steel and ceramics, and increase the green transition and efficiency improvement of existing high emissions industries.