Optimizing the Chinese Electricity Mix for CO₂ Emission Reduction: An Input–Output Linear Programming Model with Endogenous Capital

This study develops an input–output linear programming (IO-LP) model to identify a cost-effective strategy to reduce the economy-wide carbon dioxide (CO 2 ) emissions in China from 2020 to 2050 through a shift in the electricity generation mix. In particular, the fixed capital formation of electricity technologies (FCFE) is endogenized so that the capital-related CO 2 emissions of various generation technologies can be captured in the model. The modeling results show that low-carbon electricity, e.g., hydro, nuclear, wind, and solar, is associated with lower operation-related CO 2 emissions but higher capital-related CO 2 emissions compared to coal-fired electricity. A scenario analysis further reveals that a shift in the electricity generation mix could reduce the accumulated economy-wide CO 2 emissions in China by 20% compared to the business-as-usual (BAU) level and could help peak China’s CO 2 emissions by 2030. The emission reduction is mainly due to a drop in operation-related CO 2 emissions of electricity, contributing to a decrease in accumulated economy-wide emissions by 21.4%. The infrastructure expansion of electricity, on the other hand, causes a rise in the accumulated emissions by 1.4%. The proposed model serves as an effective tool to identify the optimal technology choice in the electricity system with the consideration of both direct and indirect CO 2 emissions in the economy.