A research team led by Professor Zhou Peng has made notable progress in exploring the socio-economic impacts of China’s energy transition. Their study, titled “Evaluating socio-economic and subjective well-being impacts of coal power phaseout in China” has been published in Nature Communications, a leading international journal.
The paper was authored by Gao Shuaizhi, a Ph.D. student at SEM, with Professor Zhou Peng and Associate Professor Zhang Hongyan as co-corresponding authors. Yang Shuo, also a Ph.D. student at SEM, contributed as a co-author. The university is listed as the sole institutional affiliation. The research was supported by the National Natural Science Foundation of China.
Transitioning from coal-based power to cleaner energy sources is vital for achieving global climate goals and implementing China’s “dual carbon” strategy. In recent years, China has actively pursued the restructuring of its coal power sector, phasing out over 100 million kilowatts of outdated capacity. While this shift has brought clear environmental and public health benefits, its broader socio-economic implications—particularly on income levels, employment, and individual well-being—remain underexplored, creating uncertainty in coal retirement policymaking.
To address this gap, Zhou’s team utilized macroeconomic data and longitudinal individual-level survey data from Chinese counties and districts between 2010 and 2020. Using a quasi-natural experiment framework with a difference-in-differences (DID) methodology, the study quantitatively assessed how coal plant closures affect both regional household income and individual subjective well-being. The researchers also estimated the economic value generated by improved well-being, offering new insights into the risks and opportunities of coal phaseout in China.
Figure 1: Geographic distribution of coal-fired power plant retirements and their socio-economic effects
Figure 2: Mechanisms through which coal power retirement impacts well-being
The findings highlight a dual impact: while coal plant retirements may challenge local economies, they can significantly enhance individuals’ subjective well-being (Figure 1). Further analysis reveals that improvements in environmental quality and health are key mechanisms driving these well-being gains (Figure 2). Subgroup analysis shows that populations in coal-dependent areas, rural regions, or areas with higher decommissioning volumes, as well as older adults and those with poorer health, are particularly sensitive to both the benefits and challenges of coal phaseout.
The study identifies three key avenues for maximizing the socio-economic benefits of energy transition: leveraging environmental gains, enhancing individual well-being, and accelerating clean energy deployment. It emphasises the importance of integrating economic and social considerations into energy transition policies and calls for a just and inclusive approach.
According to peer reviewers, the study addresses “a novel and crucial topic,” providing “an innovative analysis of how supply-side decarbonization strategies—particularly the phaseout of coal-fired power—impact economic and social outcomes, especially individual well-being.” Reviewers also noted that the findings “offer a critical new perspective for accelerating energy transition and achieving climate objectives.”
