EfD Discussion Paper,
Environment for Development, University of Gothenburg

Abstract: To alleviate environmental problems and accelerate households’ energy transition to cleaner fuel, the Chinese government has enforced a household heating energy transition program in the Jing-Jin-Ji Region. Through subsidies and mandates, the program substitutes household heating coal with electricity, natural gas, or cleaner coal. The program has effectively decreased the emission of air pollutants; however, it also has led to a sharp increase in household heating costs. Through a large-scale household survey in Beijing and Hebei, we find that coal to electricity and coal to gas significantly increased energy poverty (high ratios of energy expenditure to income), while clean coal replacement reduced energy poverty. The extent of energy poverty in Beijing remained stable, but it increased in Hebei by fifteen percentage points, which is a 70 percent increase. We also find that households with lower income, lower education, smaller household size and larger housing area are more likely to have high ratios of energy expenditure to income, and therefore are more likely to experience energy poverty. Furthermore, households with lower income are negatively affected by the program to a larger degree in terms of the increase in the ratio of energy expenditure to income and the likelihood of being pushed into energy poverty. These findings call the attention of policy makers to low-income households when designing and implementing policies.

Keywords: coal to electricity; coal to gas; clean coal replacement; energy poverty; heating; energy transition

JEL-codes: D63; Q48

Language: English

31 pages, May 1, 2020

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