A research team led by Associate Professor Cai Wenjia from the Department of Earth System Science at Tsinghua University and the Joint Pollution Control and Carbon Reduction Research Center at the Institute for Carbon Neutrality has published a cover article in Nexus, an interdisciplinary journal by Cell Press. Titled “Multidimensional inequality embedded in the gains and losses from China's coal phasedown,” the study focuses on the coal exit transition under China's 2060 carbon neutrality goal. By constructing a plant-level, outcome-oriented framework, the team systematically evaluated the distributional impacts of five distinct exit strategies across four key dimensions: stranded asset losses, profit losses, job losses, and health benefits. The findings reveal that a “Health-First” strategy yields the highest net social benefit—24% higher than the average—while also highlighting the risk that coal exit could exacerbate regional inequalities. This research provides critical insights for formulating just transition policies that balance climate goals with social equity.

Background: The Complex Trade-offs of Coal Exit

Achieving carbon neutrality by 2060 is a strategic priority for China, with the large-scale phasedown of coal serving as a core measure. As a cornerstone of China’s traditional energy structure, the retreat of coal involves complex trade-offs beyond carbon reduction, impacting economics, employment, and public health.

Existing research often focuses on single-dimensional impacts, overlooking the differential shocks various strategies impose on different regions. Given China’s significant regional development disparities, provinces with high dependence on the coal industry—often less developed ones—face a heavier transition burden. This could widen the development gap if not managed carefully. Furthermore, while coal phase-out brings substantial health benefits by reducing air pollution, it simultaneously triggers challenges such as stranded assets and job losses. Balancing these factors to mitigate regional inequality is the central challenge of a “just transition” and the primary motivation for this study.

Core Findings

1. A Novel Plant-Level Framework

The study developed an outcome-oriented analysis framework at the power plant level to evaluate five coal exit strategies: Health-First, Economy-First, Job-First, Oldest-First, and Smallest-First. The assessment covers four core dimensions:

Stranded Asset Losses: The loss of existing asset value due to early retirement.

Profit Losses: The reduction in economic revenue from electricity generation.

Job Losses: The scale of employment displacement in coal-related sectors.

Health Benefits: The quantified improvements in public health resulting from better air quality.

2. Comparative Analysis of Five Strategies

Between 2025 and 2060, the cumulative impacts of the five strategies vary significantly:

Stranded Asset Losses: $161 billion to $199 billion.

Profit Losses: $112 billion to $156 billion.

Job Losses: $19 billion to $38 billion.

Health Benefits: 5 million to 25 million life-years gained.

The Health-First strategy stands out, delivering the largest health benefits while maintaining relatively low socio-economic losses. Its net social benefit is 24% higher than the average of all strategies. In contrast, other strategies show clear shortcomings; for instance, the Economy-First strategy reduces some financial losses but fails to maximize health co-benefits and does not mitigate the risk of worsening regional imbalance.

3. Risks of Exacerbating Regional Inequality

The study explicitly warns that coal phasedown could intensify inequality at the provincial level. Due to differences in coal dependence, economic development, and industrial structure, provinces face vastly different shocks. Less developed regions, heavily reliant on coal, bear a disproportionate burden of stranded assets and job losses. Without synchronized health gains and economic compensation to cover transition costs, the development gap between regions risks widening further.

4. The Superiority of the Health-First Strategy

Comprehensive comparison confirms the distinct advantages of the Health-First approach. By prioritizing the retirement of plants with the highest health impacts, this strategy significantly improves public health while effectively controlling socio-economic costs. It offers a viable path to reconcile “emission reduction” with “equity,” achieving superior net social benefits compared to other options.

5. Global Implications

The framework and conclusions hold broad global relevance. For other coal-dependent nations undergoing energy transitions, this model provides a scalable tool to balance climate targets with social fairness. The study emphasizes the need for region-specific support, multi-dimensional trade-off analysis, and targeted measures—such as compensation schemes, job retraining programs, and grid infrastructure upgrades—to minimize inequality risks and ensure a smoother, fairer transition.

Conclusion

This study systematically dissects the multidimensional trade-offs and regional inequalities inherent in China's coal phasedown. By verifying that the Health-First strategy is the optimal choice for balancing efficiency and equity, and by identifying the specific risks to less developed provinces, the research offers a scientific basis for China's just transition policies. Moreover, it provides a valuable analytical framework for coal-dependent countries worldwide, aiding in the pursuit of climate goals while promoting social sustainability.

Publication Details

Title: Multidimensional inequality embedded in the gains and losses from China's coal phasedown

DOI: https://doi.org/10.1016/j.ynexs.2025.100098

Authors: The paper was authored by a multidisciplinary team including Li Ruiyao, Wang Rui, Zhang Shihui, Wang Can, and Cai Wenjia. The team, comprising experts in energy policy, environmental science, and economics, is dedicated to solving complex socio-economic and environmental challenges in the energy transition through interdisciplinary research.