This paper proposes a scenario analysis to address whether the national and provincial CO 2 emissions intensity reduction target during 2016-2020 would be achievable for China's power industry with the identification of change on carbon productivity. This productivity indicator is further decomposed to investigate contributions of different sources to productivity growth when there exists technological heterogeneity. Evaluation results show that even if all electricity-generating units in each region were able to adopt the best practice, the nationwide 18% intensity reduction target is not feasible through improving technical efficiency or upgrading technology on electricity generation and carbon abatement in a short or medium term. The existence of regional technological heterogeneity in power generation and associated CO 2 emissions reduction processes implies the necessity of more differentiated regulations and policies for emission reduction across China's regions and interregional technology transfer. The emerging national emission trading scheme could easy some challenges in formulating emission policy for heterogeneous regions.

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China's power industry benefit from nationwide carbon emission permit trading? An optimization model-based ex post analysis on abatement cost savings. CEEP-BIT Working Paper.