Abstract EN:

China uses more than 60 percent of coal in its energy mix. This heavy reliance has strong environmental consequences notably with SO2 and CO2 emissions for which China is the world first emitter. This already has tremendous implications on a local, regional and global scale. Therefore, there is an urgent need for decisive actions bringing the energy sector back on sustainable tracks. Indeed, pollution is a great concern. Not only does it hamper agricultural productivity (regional pollution) or does it increase asthma or cancer (local one) but now, it can change the climate and so, the conditions in which and the way people live. This dissertation aims at describing the environmental impact of the rising energy use in China and most importantly endeavours at answering the question: what solutions could be implemented now to achieve an environmentally sustainable development? In this essay, we intend to show that the window of opportunity is not closed yet and that, thanks to a negative price elasticity of noxious emissions, price instruments could work in China. First of all, through a subsidy removal, the government would enable the energy prices to give correct signals to the consumers that would therefore reduce the quantity of fossil fuels consumed and to producers that would go for better technologies or less polluting fuels. Then, by making the producers pay for the externalities they create through for example carbon emissions fees, the government would also reduce pollution. Overall, implementing an energy price increase would increase energy intensity, help reduce the consumption of polluting fuels and so carbon and sulphur emissions, and improve public finance