Impacts of Clean Energy Substitution for Polluting Fossil-Fuels in Terminal Energy Consumption on the Economy and Environment in China
Round 1
Reviewer 1 Report
The article "Impacts of Clean Energy Substitution for Pollutant Fossil-Fuels in Terminal Energy Consumption on the Economy and Environment in China" forecasts the energy consumption and the environmental impact for different sectors in China up to the year 2030. Overall, the article is of excellent quality, very significant at the present moment and I recommend it for publication in Sustainability. The authors show their deep and comprehensive knowledge: there is a clear statement of the research problem, a clear description of the methodology and a well discussed results section. The methodology is complex but the results seem realistic. The authors decided to include a lengthy appendix containing the database, additional results, statistical tests and validation of the chosen models but I suggest to leave it as it is since these information enables other research groups to verify, continue and upgrade the present research. I have a few minor comments that I would like the authors take into account before publication:
Comment on the dual line of energy development in China with a view on the three analysed scenarios. On the one hand, China revised the energy plan for 2030, by increasing the renewable electricity target from 20% up to 35% (NDRC draft plan). On the other hand, new coal fired power plant are still being built to meet the increasing electricity demand, with some reports estimating around 200-300 GW of new coal power plants to enter operation by 2030. Which among the three scenarios presented in section 2.2.3. is closest to this reality?
In section 2.2.3. you introduce three scenarios. It is unclear how should the policy be to effectively carry out scenarios 2 and 3. What mechanism should the country implement in order to realize the targets of scenario 2 or 3? Some of these mechanisms are discussed at the end of the Conclusion (lines 461-471) but should also be mentioned in section 2.2.3. where describing the scenarios.
Please discuss on the prediction capabilities of the ARIMA model in the case of unexpected future global economic crises. Specifically, by looking at figure 2, the official data shows that the previous financial crisis increased the coal consumption in some panels: for example Panel A (2012-2013), Panel B (2008-2009), Panel G (2008-2009). This can be rephrased into the following question: how much would the clean energy policy in China be resistant and persistent in the case of an eventual financial crisis in the 2020s?
Comment on how could the energy rebound effect reduce the expected gains from clean energy substitutes. Is it possible for clean energy substitutes to increase the lifestyle standard, improve the energy availability, boost the production sectors, and eventually increase the energy consumption in China? Then, the energy rebound effect would reduce the expected benefits from energy reduction and environmental conservation because of the increased consumption of energy. Is it possible for the ARIMA model to predict future rebound effects from past occurrences? Later, reading the article, I realizer this matter is well discussed in section 3.2.2. and in the last paragraph of section 3 (lines 411-419). Is it possible to estimate the magnitude of this energy rebound effect caused by the substitution of fossil fuels by clean energy alternatives?
Figure 1: two typos - Panel A, it says "fossi-fuell energy". Figure label: "CHIANGEM".
Author Response
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Author Response File: 
Author Response.docx
Reviewer 2 Report
The paper is an interesting study but would benefit from a number of improvements before publication:
1) Gas and electricity are per se not clean energy sources.
The GHG content of electricity depends strongly on the sources used to produce it. In China a large proportion of the primary energy used for electricity generation is coal. Therefore, it should be pointed out that electricity from renewable energy sources and probably nuclear is meant.
Concerning gas there is a wide spread of GHG emissions, but it is true that it is cleaner at the point of use. Have a look at the "Life Cycle Assessment Harmonisation" project by NREL (https://www.nrel.gov/analysis/life-cycle-assessment.html), which is also used by IPCC.
2) Figure 3: the unit for the y axis is missing.
3) Figure 3: the % increase or decrease of the different sources is relative to their current use or their shares in the overall system?
4)page 10, last paragraph: The assumption for the negative impact on those sectors is that electricity prices would rise due to higher demand. Why is there no discussion about the possible decrease of electricity prices if cheap renewable energy sources are implemented in scale? Such effects can be observed in Australia, Europe and the USA (e.g.http://www.rie.it/the-merit-order-effect-in-the-italian-power-market-the-impact-of-solar-and-wind-generation-on-national-wholesale-electricity-prices/), where wholesale prices for electricity on windy or sunny days have decreased significantly and price spikes have become less pronounced.
How would your Table 1 change if such effects are taken into account?
Author Response
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Author Response File: Author Response.docx
Reviewer 3 Report
Research description: The paper deal with the actual issue of replacing pollutant fossil fuels with clean energy. In particular, the authors study empirically the impacts that the future clean energy substitution will generate on the economy and the environment in China. In order to achieve this objective, initially the authors project the substituting potentials of pollutant fossil-fuels (i.e. coal and oil) with clean energy for different production sectors in China. This using the Autoregressive Integrated Moving Average (ARIMA) regression. Then, based on estimated projections, a dynamic multi-sectoral Computable General Equilibrium (CGE) model is employed to study the impacts of future clean energy substitution on: (1) energy production, (2) output of non-energy sectors, (3) macro-economy, (4) CO2 emissions.
The study is organized into three sections. Section 2 introduces the methodology and simulation model. Section 3 discusses the estimation results deriving by the ARIMA regression and the simulation results deriving by the CGE model for the impacts of clean energy on the Chinese economy and environment. In the last section the policy implications are explained.
Comments: The work appears to be well structured and the topic of interest, given the ever increasing environmental pressures and the consequent need to have recourse to clean energy. Therefore, I believe that work is worthy of being published. However, it is necessary to explain some issues and solve some doubts:
The authors make it clear that: “The data of 1991–2016 are used for ARIMA parameter estimation, and the data of 2017 are used 141 to validate the projection accuracy of the ARIMA regression” (lines 141-142). Why the authors did chose these data? Is this range of data enough to make a long-term prediction? It should be justified the choice of data used for the projection. In Section 2.2 the theoretical framework of CHINAGEM model used by the authors is not clear. I think that this part should be deepened in order to clarify how the implemented dynamic model allows analysing the economic and environmental impacts of clean energy substitution. The article deals with a theme that has not only economic, but also environmental effects. These topics are often examined through multi-criteria evaluation models. On this question it is important to give at least one reference and to introduce some literature references. So, I suggest extending the bibliography. Then, I suggest considering for references: Nesticò A., Sica F., The sustainability of urban renewal projects: a model for economic multi-criteria analysis. Journal of Property Investment and Finance, Vol. 35, Issue 4, pp. 397-409, 2017, doi: 10.1108/JPIF-01-2017-0003. Emerald Group Publishing Ltd. At lines 213-215 the authors write: “The Armington elasticities of commodities are transferred from the GTAP V9 database by mapping the CHINAGEM 146 sectors to GTAP 57 sectors.” The sentence is unclear. Please explain it better as well as the meaning of the acronym GTAP.I also recommend carefully reviewing the English and the manuscript in general because some typing errors have been found. For example:
Abstract: “CO2” should be CO2.
Check Figure 1, for example “Fossi-fuel” or “CHIANGEM model”.
Author Response
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Author Response File: Author Response.docx
Round 2
Reviewer 2 Report
The authors have responded in an appropriate way to my comments and the paper could be published.
A disclaimer about GHG emissions of gas has been added, but it is still my opinion that a stronger statement about the spread of GHG emissions from gas and a reference to the"Life Cycle Assessment Harmonisation" project would be beneficial for the quality of the paper.
Reviewer 3 Report
The authors have made all the necessary modifications and additions. So the work has improved in content and it is easier to read.
