The Potential Impact Of Carbon Prices On Chinese Industrial Energy Structure

China pays much attention to energy structure and environmental pollution continuously.In 2019,the Report on the Work of the Government stresses that China should improve the reform of energy structure and promote the green development.Energy substitution helps break through the bottlenecks of sustainable economic development,under the conditions of existing energy supply and consumer demand.The unified national carbon emission trading market is under construction in 2017.The carbon price is equivalent to an exogenous increase in energy prices,which will increase the energy cost of the industrial sector.Therefore,how does carbon price affect industrial energy costs and the price relationships between different types of energy? Through what channels will carbon price affect Chinese industrial energy structure?This paper is an empirical study driven by the two issues above.For the first question,in the second chapter,the energy consumption and the price data of coal,oil(gasoline and diesel)and electricity in the industrial sub-sector in 2016 are used to construct a mapping between carbon price and overall energy cost and price ratios.For the second question,two main channels,total effect and structural effect are discussed in this paper.In the third chapter,the panel data of 36 industries in China from 2000 to 2016 is applied to calculate the price elasticity of energy demand.Based on this simulation,the total effect of carbon price on industrial energy demand is analyzed under the carbon prices' scenario of 0-300 yuan.In the fourth chapter,the Translog cost function is used to measure the substitution elasticity between the main energy varieties in the industrial sector.Based on the results,the scenario simulation is used to analyze the structural effect of carbon price on energy demand.The main conclusions of the paper are shown as follows:Firstly,there is an industrial heterogeneity in the impact of the same carbon price on the overall cost of energy consumption.Carbon price has the greatest impact on the high energy-consuming industry,particularly in the petroleum processing coking and nuclear fuel processing industry,as well as in the power and heat production and supply industry.At the same carbon price level,the price ratios between different energy sources depend on the carbon dioxide emission coefficient and the current energy price.Under the impact of carbon price,oil will be cheaper than coal,electricity will be cheaper than coal and oil.Secondly,the carbon price has a negative effect on the industrial energy demand.Also,there is an industrial heterogeneity.In general,the energy demand of the petroleum processing coking and nuclear fuel processing industry are most affected by carbon prices.The electricity and heat production and supply industries are secondarily affected by carbon prices.And the transportation equipment manufacturing industry is least affected by carbon prices.Specifically,when the carbon price is 50 yuan / ton,the industrial energy consumption cumulatively declines 12.04%.When the carbon price is 300 yuan / ton,the industrial cumulatively declines 42.19%.Thirdly,there are substitution relations between coal,oil and electricity.The order of substitution between energy sources is that oil replaces coal and electricity replaces coal and oil.In the long run,carbon prices will lead to a decline in the consumption of three types of energy,especially coal consumption.What's more,carbon price will increase the substitution of clean energy for fossil energy.Therefore,the carbon market will not only help reduce emissions,but also optimize energy consumption structure.Government should consider ensuring a certain carbon price level in the design of the mechanism.