Report Summary:
This paper examines the impact of high temperatures on power shortages and government power rationing policies in an electricity system lacking market mechanisms and price signals, and explores the underlying economic logic. By combining Chinese firm panel data with high-precision meteorological data, we find that high temperatures significantly reduce firm electricity consumption and operational performance. The decline in electricity consumption on high-temperature days is primarily driven by administrative power rationing policies. Furthermore, we construct a theoretical framework to quantitatively analyse how social planners optimise the interdepartmental allocation of electricity resources and assess the welfare effects of prioritising residential electricity use. The results indicate that intensified interdepartmental competition for electricity due to climate change and the absence of market mechanisms jointly constitute the underlying drivers of China's power rationing policies.
Speaker Profile:
Dr. Zhang Lin is a professor at City University of Hong Kong, Deputy Director of the Institute for Global Governance and Innovation, and doctoral supervisor. He is a council member of the International Association for Energy Economics (IAEE), a visiting scholar at the U.S. Department of State's Economic and Sustainable Development SUSI program, an international conference ambassador for the Hong Kong Tourism Board, a researcher at the Hong Kong Clean Energy Research Institute, editor-in-chief of The Energy Journal, invited executive editor of Energy Policy, and chief expert of the NSFC/RGC Regional Joint Project. Dr. Zhang Lin has long focused on theoretical and quantitative research in climate change, energy transition, environmental governance, and economic sustainability. He has published over 80 papers in top-tier academic journals such as PNAS, JEEM, and Economic Research. His research has been cited in policy reports by organizations including the United Nations, the European Union, and the OECD. He has been selected for the Stanford Top 2% Global Scientists list.
