Can electrification mitigate the marginal cost of carbon emission abatement? Evidence from China

Our study assesses the impact of China's electrification rate on the marginal cost of carbon emission abatement. Employing the linear econometric model with squared terms and the spatial Durbin model, we reveal an inverted U-shaped non-linear relationship between electrification and marginal abatement costs of the local and neighboring areas, with the turning point corresponding to an electrification rate of 31.34% and 19.60% respectively. In short, increased electrification helps mitigate marginal abatement costs. Moreover, we also observed that the differences in electricity supply and demand significantly affect the causal relationship between electrification and marginal abatement costs. • Electrification and abatement cost in China form an inverted-U link. • Electrification has spatial spillover effects on regional abatement costs. • Low-priced electricity-exporting regions show greater abatement cost reduction. • Emphasized clean energy transition and efficient thermal power generation. • Proposed policies to boost electrification and reduce abatement costs.