Power Rationing econ6313 (Cecilia)Ziyan liu z5382514
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Power Rationing ECON6313 (Cecilia)Ziyan LIU z5382514 Recently，China’s government has implemented the power rationing policy which caused a lot of controversies. Thus, this report will analyse the impact of the policy and evaluate the proposal that could improve the power system in China. Introduction As economies grow, the demand for electrical energy significantly grows in lined with rising populations, industrialization, and rising incomes. On the other hand, excessive use of coal power leads to serious environmental pollution. Therefore, to deal with the power shortage and environmental problem, China introduced the Dual control of energy consumption policy in 2015. To be specific, according to actual conditions, each local government curbs the pell-mell development of high-energy intensity and highly pollutive projects through power rationing and forced cuts to factory production. Furthermore, theoretically, power rationing can be implemented as two models: rolling blackouts and quota system. Chinese policy is implemented as rolling blackouts. For example, international energy website (2021) reported that for the high energy-consuming enterprise including ceramics, chemical, non-ferrous metals etc. in the Guangdong province, since September 16 these firms have implemented the power rationing policy: "run for 2 days and stop 5 days" Negative impact There are 4 potential impacts caused by the policy. In the first place, power rationing might cause the output of major industrial products decreases. Firstly, blackouts caused the output of major industrial products decreases. As can be seen from Figure 1 (National Bureau of Statistics 2021), the production of cement, pig-iron and crude steel keep decreasing compared with the same period last year. This would appear to indicate that rolling blackouts make high-energy factories have to decrease production.
What’s more. The decrease of raw material caused the price of material increased. As a result, the cost of firms increased. Furthermore, rolling blackouts is unfair to everyone who is rich or poor. As this policy does not give people the possibility to choose and allocate their resources where they think that the energy will give them greater wealth or will-being. Moreover, the policy could also influence residents’ utility. For instance, rolling blacks in Liao Ning provenience contributed to no traffic lights which caused many traffic accidents. It also leads to no internet for long time so that many workers and students had to work and study inefficiently. Download 374.48 Kb. Share with your friends:
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