The Impact of Energy Crisis and Covid-19 Recovery on Carbon Efficiency in China

The energy crisis is seeing its wave in Europe, with anomalous energy prices and electricity shortages. China is also experiencing a similar situation. As the primary energy source of China’s electricity generation, with its sky-high prices, coal put factories and households under pressure. The Chinese government announced electricity rationing, which can significantly affect carbon efficiency, to lessen the impact of international energy crises. However, no researches focus on carbon efficiency during the crises in 2021. Therefore, this paper uses the fuzzy regression discontinuity design to estimate the treatment effect of the energy crisis and COVID-19 recovery on carbon efficiency. The results show that the relationship between coal prices and carbon efficiency at cutoff 1 (1950 yuan) and cutoff 2 (2870 yuan) have changed. The positive treatment effect at cutoff 1 proves that the “zero-tolerance” policy effectively promote carbon efficiency. The negative treatment effect at cutoff 2 proves that electricity rationing has not always improved carbon efficiency during the energy crisis