Is the price elasticity of demand for coal in China increasing?

Paul Burke, Hua Liao

    Research output: Contribution to journalArticle

    Abstract

    China's dependence on coal is a major contributor to local and global environmental problems. In this paper we estimate the price elasticity of demand for coal in China using a panel of province-level data for 1998-2012. We find that provincial coal demand has become increasingly price elastic. As of 2012 we estimate that this elasticity was in the range -0.3 to -0.7 in point estimate terms when responses over two years are considered. The results imply that China's coal market is becoming more suited to price-based approaches to reducing emissions. The elimination of coal consumption subsidies could reduce national coal use and related emissions by around 2%.
    Original languageEnglish
    Pages (from-to)309-322
    JournalChina Economic Review
    Volume36
    DOIs
    Publication statusPublished - 2015

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