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State versus Market in China’s Low-Carbon Energy Transition

Publish Date: 2019/09/19 08:44:04    Hits:

TitleState versus Market in China’s Low-Carbon Energy Transition

Philip Andrews-Speed, Energy Studies Institute,National University of Singapore

Time:9.20 16:00-18:00



China’s efforts to constrain the carbon emissions from its energy sector to date have relied largely on transitional administrative measures backed by generous financial support. However, this approach is encountering ever-diminishing returns. In response, the government has been introducing a series of market reforms to improve economic efficiency and constrain carbon emissions. These include competitive tenders for shale gas acreage, emissions trading pilot markets, competition in electricity markets, third-party access to pipelines, renewable energy reverse auctions and green certificate trading. However, the energy sector remains dominated by state through central and local government agencies and state-owned enterprises whose priorities and behaviours are changing only slowly.The paper applies neo-institutionalist concepts to examine the challenge of introducing market mechanisms into China’s energy sector, drawing on both rational choice and organisational institutionalism. It draws on evidence of actor behaviours during current and past efforts to introduce market forces into the state-dominated energy sector. In institutional terms, the

result has been incompatibility between, on the one hand, the formal rules that govern market transactions and, on the other hand, the wider institutional environment and the informal rules that govern behaviours. State actors of different types and those with connections with the state are able to take advantage of their status to gain economic benefit and undermine the operation of the market mechanisms. Consequently, progress in implementing these market reforms will be slow and the outcomes uncertain.

Dr Philip Andrews-Speedis a Senior Principal Fellow at the Energy Studies Institute, National University of Singapore.He has nearly 40 years in the field of energy and resources, starting his career as a mineral and oil exploration geologist before moving into the field of energy and resource governance.Until 2010, he was Professor of Energy Policy at the University of Dundee and Director of the Centre of Energy, Petroleum and Mineral Law and Policy.His main research interest has been the political economy of the low-carbon energy transition. China has been a particular focus for his research, but in recent years he has been more deeply engaged with energy challenges in Southeast Asia. His latest book (co-authored with Professor Zhang Sufang)China as a Global Clean Energy Champion:Lifting the Veilappeared early in 2019.