ABSTRACT
To achieve the ambitious pledge of being a carbon-neutral country before 2060, it is crucial for China to change the power source from thermal power to low-carbon energy to achieve this CO2 reduction target. Such structural change in power sources, however, may have negative economic effects, especially on thermal power and related industries. This chapter estimates an input-output table with renewable-energy power generation sectors in China to implement a scenario input-output analysis that evaluates economic and environmental effects by different power supply configurations. The estimated results show that the replacement of thermal power generation with renewable energies will greatly reduce CO2 emissions. Economic impacts will be marginal at the national macroeconomic level, but the replacement will reduce the outputs and labor demands of thermal power and its related industries such as mining, coal products, and transportation. Replacement with wind power aggravates the negative economic impacts in coal power and related industries because it decreases the total output and the number of employees, while that with solar power will mitigate them.
