Subsidies to Coal and Renewable Energy in China
The cost to society of coal use includes the financial cost of providing subsidies to the coal industry in addition to the cost of externalities. Coal and Renewables in China explores the cost of coal in terms of subsidies and externalities and discusses the extent to which coal subsidies act as a barrier to the development of renewable energy. It finds that China is supporting the coal industry through the provision of billions of dollars’ worth of subsidies to consumers and producers. In addition to the financial cost, these subsidies increase the consumption of coal, producing externalities including air pollution and greenhouse gas emissions.
Subsidies to Coal Production in China provides the accompanying detailed inventory of coal subsidies, identifying an estimated CNY 35.7 billion (USD 5.8 billion) in 2013. A further subsidy in the form of credit support was estimated to be between CNY 3.5 and 35.7 billion (USD 0.57 billion and USD 5.8 billion). The major subsidies include tax relief, investment in assets, compensation for mine closures and direct payments. The report finds that more transparency is needed to aid the process of subsidy reform in line with the government policy to reduce coal consumption.