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By Zhang Shiguo, Management World Magazine; Fan Ying & Yi Bowen, School of Economics and Management, Beijing University of Aeronautics and Astronautics

Research Report, No.219, 2021 (Total 6284) 2021-8-13

Abstract: Energy transition is an important measure for China to deal with the contradiction between its economic growth and the deteriorating environment and climate, and to achieve its goal of carbon neutrality. For a long time, the Chinese government has always attached great importance to energy transition and has continued to promote energy transition through dual control of energy intensity and carbon intensity binding targets. This paper sorts through the evolution of China’s energy transition since the “11th Five-Year Plan” period and summarizes its main driving forces. Based on the practice of China’s energy transition, the paper analyzes challenges faced by China’s energy transition from the perspectives of energy system and mechanism and new energy market competition. Besides, it also puts forward corresponding policy options for promoting China’s energy transition as follows. First, China need to accelerate reforms of its energy system and mechanism, break the monopoly of a few enterprises, and rationalize energy prices Second, China need to gradually improve the carbon market and green certificate market to give full play to their external pricing and incentive roles Third, China needs to innovate key technologies and relevant supportive business models and system operation models. Last but not least, China need to strengthen the guidance of green behaviors and ideas in the whole society.

Keywords: energy transition, carbon neutrality, measures and policy options