Energy quota trading and energy vulnerability: China's energy quota trading pilot
Li Liu, Jichuan Sheng
Abstract
Energy vulnerability has received sustained attention in global energy research related to energy security and poverty. However, energy quota trading (EQT), which aims to reduce energy consumption and intensity, has the potential to impact energy vulnerability substantially. This study scrutinizes the effect of EQT on energy vulnerability using a difference-in-difference model, relying on a quasi-natural experiment of China's EQT pilot. The findings show that EQT can significantly reduce energy vulnerability by 4.2%, which helps improve energy resilience. In addition, EQT can reduce the proportion of coal in energy consumption, thus reducing energy vulnerability. Finally, the ameliorating effect of EQT on energy vulnerability is particularly pronounced in areas with high resource dependence and low marketization. This research not only expands the understanding of the relationship between EQT and energy vulnerability, but also provides valuable assistance for future EQT policies from pilot to full-scale implementation.