The effects of energy-related policies on energy consumption in China

This paper examines the effects of different types of energy-related policies on different types of energy consumption in China. We collect and construct a novel, comprehensive, and detailed data set on province-level energy-related policies that includes specific types of energy-related command and control policies; financial incentives; awards; intellectual property rights; and education and information policies. Our econometric method employs instruments to address the potential endogeneity of the policies. According to our results, some types of energy-related policies have been effective in reducing energy consumption. However, many other policies have the possibly unintended or even perverse consequence of increasing rather than decreasing energy consumption. Our results on the mixed effectiveness of energy-related policies in China in reducing energy consumption have important implications for the design of energy-related policies in China and elsewhere. •Some energy-related policies have been effective in reducing energy consumption.•Many other policies increase rather than decrease energy consumption.•Policies may have possibly unintended or even perverse consequences.