The impact of climate policy on energy equity: effect, mechanism, and spatial analysis – Nature

Report on the Impact of China’s Climate Policy on Energy Equity and Sustainable Development Goals

Abstract

This report analyzes the effect of China’s Action Plan for the Prevention and Control of Air Pollution (APPCAP) on urban energy equity, a critical component for achieving the United Nations Sustainable Development Goals (SDGs). Based on panel data from 286 Chinese cities from 2005 to 2022, this study finds that the APPCAP significantly promotes urban energy equity, directly contributing to SDG 7 (Affordable and Clean Energy) and SDG 10 (Reduced Inequalities). The policy’s effectiveness is driven by mechanisms of energy diversification, improved energy consumption structure, and strengthened regulatory constraints. Notably, the positive impacts are more pronounced in specific urban contexts, highlighting the need for tailored approaches to ensure inclusive progress toward SDG 11 (Sustainable Cities and Communities). The analysis also reveals a significant spatial spillover effect, indicating that improvements in local energy equity benefit neighboring regions, reinforcing the importance of inter-regional cooperation for sustainable development.

1. Introduction: Climate Policy and the Sustainable Development Agenda

The pursuit of energy equity is central to the United Nations’ 2030 Agenda for Sustainable Development. SDG 7 explicitly calls for ensuring universal access to affordable, reliable, sustainable, and modern energy. In China, historical challenges of uneven energy distribution and consumption have created disparities that hinder progress toward this goal and SDG 10 (Reduced Inequalities). In response to severe air pollution and as part of its commitment to SDG 13 (Climate Action), the Chinese government implemented the Action Plan for the Prevention and Control of Air Pollution (APPCAP) in 2013. This report assesses the APPCAP’s role not only as an environmental regulation but also as a crucial policy instrument for advancing energy equity and creating socially inclusive, sustainable urban environments as envisioned in SDG 11.

2. Research Methodology

2.1 Model Construction

A quasi-natural experiment framework was employed to assess the policy’s impact. The primary models included:

• Difference-in-Differences (DID) Model: To identify the causal effect of the APPCAP on urban energy equity.
• Spatial Durbin Model (SDM): To analyze the spatial spillover effects of energy equity across different cities, utilizing an endogenous spatiotemporal weight matrix.

2.2 Variable Definitions

1. Explained Variable (Energy Equity): A comprehensive index was constructed to measure urban energy equity, reflecting the core tenets of SDG 7. It incorporates three key dimensions:
   • Energy Accessibility
   • Energy Affordability
   • Energy Sustainability
2. Explanatory Variable (APPCAP Policy): A dummy variable indicating the implementation of the APPCAP in a given city and year.
3. Mechanism Variables: To understand the pathways of impact, three variables were analyzed: Energy Diversification, Energy Consumption Structure, and Regulatory Constraint.

2.3 Data and Scope

The study utilizes panel data from 286 prefecture-level cities in China covering the period from 2005 to 2022. Data were sourced from official Chinese statistical yearbooks and government reports.

3. Key Findings and Analysis

3.1 Baseline Results

The implementation of the APPCAP has a statistically significant and positive effect on urban energy equity. Pilot cities demonstrated an 11.8% higher level of energy equity compared to non-pilot cities. This finding confirms that climate policies designed for environmental improvement can yield substantial co-benefits for social equity, directly advancing SDG 7 and SDG 10. The result remains robust across various tests, including parallel trend tests, placebo tests, and Propensity Score Matching (PSM-DID).

3.2 Mechanism Analysis

The APPCAP enhances energy equity through three primary mechanisms, each contributing to different facets of the SDGs:

• Energy Diversification Effect: The policy promotes the development of renewable energy sources, reducing reliance on fossil fuels. This enhances the stability of the energy supply and narrows the energy gap between regions, fostering greater energy accessibility and contributing to SDG 7.
• Energy Consumption Structure Effect: By reducing the proportion of coal consumption and increasing the share of clean energy, the APPCAP improves environmental quality and public health. This transition lowers energy costs for vulnerable groups, promoting energy affordability and sustainability in line with SDG 7 and SDG 3 (Good Health and Well-being).
• Regulatory Constraint Effect: Strengthened government regulation under the APPCAP incentivizes high-pollution enterprises to improve energy efficiency and invest in green technology. This improves overall energy affordability and availability, supporting the objectives of SDG 7 and SDG 8 (Decent Work and Economic Growth) through green industrial transformation.

3.3 Heterogeneity Analysis

The positive impact of the APPCAP on energy equity is not uniform across all cities, revealing important considerations for achieving SDG 10 (Reduced Inequalities) and SDG 11 (Sustainable Cities and Communities).

• Strategic Position: The policy’s effect is more pronounced in cities within the Yangtze River Economic Belt, which benefit from greater policy support and industrial capacity.
• Resource Endowment: Resource-based cities, facing greater pressure to transition away from fossil fuels, show more significant improvements in energy equity.
• Fiscal Pressure: Cities with low fiscal pressure are better equipped to invest in clean energy projects, resulting in more substantial gains in energy equity compared to cities under high financial strain.

4. Spatial Analysis of Energy Equity

4.1 Regional Disparities

While the overall gap in energy equity across China has narrowed, significant regional disparities persist. The Gini coefficient analysis shows that inter-regional differences are the primary source of overall inequality, particularly between the eastern and western regions. This underscores the challenge of ensuring balanced development as required by SDG 10.

4.2 Spatial Spillover Effects

The study confirms a positive spatial spillover effect. An increase in energy equity in one city significantly enhances energy equity in geographically or economically linked regions. This finding highlights the interconnected nature of urban development and suggests that coordinated regional strategies are essential for maximizing the benefits of climate policies and advancing SDG 11 and SDG 17 (Partnerships for the Goals).

5. Conclusion and Policy Recommendations

China’s APPCAP serves as a powerful example of how climate policy can simultaneously advance environmental and social objectives aligned with the Sustainable Development Goals. The policy has significantly improved urban energy equity, contributing directly to SDG 7, SDG 10, SDG 11, and SDG 13.

Recommendations for Aligning with SDGs:

1. Integrate SDG Targets into Climate Policy: Future environmental policies should explicitly incorporate energy equity targets to ensure that the benefits of a green transition are shared by all, particularly vulnerable populations.
2. Promote Diversified and Clean Energy Structures: Governments should continue to support the transition to renewable energy by strengthening regulatory frameworks and providing incentives for clean technology, thereby ensuring progress on SDG 7 and SDG 13.
3. Implement Targeted Support for Disadvantaged Regions: To address the heterogeneity of policy impacts and advance SDG 10, tailored financial and technical support should be provided to non-strategic, non-resource-based, and high-fiscal-pressure cities to enhance their capacity for energy transition.
4. Foster Inter-Regional Cooperation: Establish formal mechanisms for regional collaboration to leverage the positive spatial spillover effects of energy equity. This includes creating platforms for sharing best practices, coordinating energy infrastructure projects, and promoting technology transfer, in the spirit of SDG 17.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 7: Affordable and Clean Energy

   The article explicitly mentions SDG 7, stating its call for “ensuring access to affordable, reliable and sustainable modern energy for all.” The core theme of the study is “energy equity,” which is analyzed through the dimensions of energy availability, affordability, and sustainability, directly aligning with the principles of SDG 7.

2. SDG 11: Sustainable Cities and Communities

   The focus of the article is on China’s “Action Plan for the Prevention and Control of Air Pollution (APPCAP)” and its impact at the city level. The policy aims to improve urban air quality by reducing pollutants like PM2.5 and PM10, which is central to making cities more sustainable and improving the urban environment.

3. SDG 13: Climate Action

   The article frames the APPCAP as a key “climate policy” and a critical step in China’s efforts to “combat climate change.” It discusses the policy’s role in “carbon emissions control” and advancing China’s “carbon peak and neutrality goals,” linking it directly to national climate action strategies.

4. SDG 3: Good Health and Well-being

   The article highlights the health benefits of the APPCAP, noting that research has shown the policy “has effectively reduced the incidence and mortality of air pollution-related diseases.” This connects the environmental policy directly to public health outcomes.

5. SDG 10: Reduced Inequalities

   The concept of “energy equity” is fundamentally about reducing inequality. The article discusses how the APPCAP aims to narrow the “regional energy consumption gap,” achieve “socially inclusive development,” and address the energy challenges faced by “underdeveloped areas and for low-income groups.”

2. What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 7: Affordable and Clean Energy

   • Target 7.1: Ensure universal access to affordable, reliable and modern energy services.

     The article’s central theme of “energy equity,” evaluated through “energy availability” and “energy affordability,” directly addresses this target. The policy’s goal is to provide “policy guarantees for achieving socially inclusive development” and improving welfare for all residents, including those in “underdeveloped areas.”

   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix.

     The APPCAP promotes the “development and utilisation of clean energy sources, including solar, wind, and hydropower.” The mechanism analysis shows the policy works by optimizing the “energy consumption structure” and increasing the “proportion of clean energy.”

   • Target 7.3: Double the global rate of improvement in energy efficiency.

     The article states that the APPCAP enforces “stringent energy efficiency and environmental protection standards” and that strengthened government regulation “enhances energy utilisation efficiency.”

2. SDG 11: Sustainable Cities and Communities

   • Target 11.6: Reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality.

     This is the primary objective of the APPCAP discussed in the article. The plan was created to “cope with increasingly severe air pollution” and set specific “PM2.5 and PM10 concentration reduction targets for different regions.”

3. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies and planning.

     The article describes the APPCAP as a “cornerstone policy instrument for air pollution control in China” and a key part of the country’s “overall climate governance system,” demonstrating the integration of climate goals into national strategy.

4. SDG 3: Good Health and Well-being

   • Target 3.9: Substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination.

     The article cites research finding that the APPCAP has “effectively reduced the incidence and mortality of air pollution-related diseases,” directly linking the air pollution control policy to the reduction of illness and death.

5. SDG 10: Reduced Inequalities

   • Target 10.2: Empower and promote the social, economic and political inclusion of all.

     The article states that the APPCAP provides “policy guarantees for achieving socially inclusive development and improving all residents’ welfare.” It aims to narrow the “regional energy consumption gap” and reduce “vulnerable groups’ energy access inequality.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 7 (Affordable and Clean Energy)

   • Urban Energy Equity Index (Target 7.1):

     The study constructs a “comprehensive evaluation system of energy equity at the urban level in China across three dimensions: energy accessibility, energy affordability, and energy sustainability equity.” This composite index serves as a direct measure of progress towards equitable energy access.

   • Share of Clean Energy in Total Consumption (Target 7.2):

     The article measures the “energy consumption structure” by using the “ratio of total clean energy consumption to total energy consumption” and the “ratio of total coal consumption to total energy consumption.”

   • Energy Diversification Index (Target 7.2):

     The study uses the “Herfindahl-Hirschman Index (HHI) to quantify urban energy diversification levels,” which measures the variety and balance of energy sources.

   • Energy Efficiency (Target 7.3):

     While not a direct numerical indicator, the article implies that “energy utilisation efficiency” is a key outcome of the policy’s regulatory effects and technological upgrades.

2. Indicators for SDG 11 (Sustainable Cities and Communities)

   • Concentration of Air Pollutants (Target 11.6):

     The article explicitly mentions “PM2.5 and PM10 concentration reduction targets” and reports on the “decline in average PM10 concentrations” and “reduction in annual average PM2.5 concentrations” as key metrics for the policy’s success.

3. Indicators for SDG 3 (Good Health and Well-being)

   • Incidence and Mortality of Air Pollution-Related Diseases (Target 3.9):

     The article refers to studies that measure the “incidence and mortality of air pollution-related diseases” to demonstrate the positive health impacts of the APPCAP.

4. Table of SDGs, Targets, and Indicators

Source: nature.com