The Impact of Carbon Pricing Mechanisms on Regional Power Sector Emissions: Evidence From Guangdong, China

ABSTRACT This study investigates low‐carbon transition pathways and carbon neutrality planning in Guangdong Province, China's largest energy consumer. Using integrated regression analysis, electricity demand is projected to increase from 850 TWh in 2023 to 1580 TWh by 2060. A coupled LEAP‐NEMO modeling framework assesses the impacts of key policies including carbon pricing, renewable energy expansion, and energy storage deployment. Five scenarios are evaluated: Baseline (BAS), Renewable Energy Promotion (REP), High Carbon Price (HCP), Advanced Storage Technology Breakthrough (ASP), and Comprehensive Policy Mix (COM). Results show that single policies reduce emissions but are insufficient for carbon neutrality. The ASP and COM scenarios, combining multiple technologies and policies, achieve substantial decarbonization. Under the COM scenario, carbon emissions decline by 93% relative to the baseline, reaching 47.6 Mt by 2060, with renewables accounting for 88% of generation and coal power phased out under strict carbon pricing. Economic analysis reveals that despite higher initial investments, the COM scenario lowers long‐term operational costs by approximately 12% compared to the baseline, demonstrating the economic benefits of policy synergy. Based on Guangdong's energy profile and policy outcomes, key recommendations include developing differentiated carbon market mechanisms to align carbon and electricity prices, enhancing cross‐regional energy coordination within the Guangdong‐Hong Kong‐Macao Greater Bay Area, and optimizing energy storage deployment to support high renewable integration.