Despite pessimism in the progress of global climate change negotiations, efficiency improvements at industry and national levels are quietly contributing to a slower growth in CO2 emission. In this study we investigated the case of coal using efficiency in coal-fired electricity generation in China. We found that investment in improving coal-using efficiency in coal-fired electricity generation leads to both a faster growth in real GDP and a slower growth in the ratio of CO2 emission to GDP. However, as China is rapidly closing the efficiency gap with international best practice, this instrument alone will not be sufficient for China to achieve its emission reduction target.
