| Summary/Abstract |
China's dependence on coal is a major contributor to local and global environmental problems. In this paper we estimate the price elasticity of demand for coal in China using a panel of province-level data for 1998–2012. We find that provincial coal demand has become increasingly price elastic. As of 2012 we estimate that this elasticity was in the range − 0.3 to − 0.7 in point estimate terms when responses over two years are considered. The results imply that China's coal market is becoming more suited to price-based approaches to reducing emissions. The elimination of coal consumption subsidies could reduce national coal use and related emissions by around 2%.
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