Drivers of environmental externality reduction in China's electric power industry: A spatial-temporal analysis

China's electric power industry has made significant efforts to reduce environmental externality in the past two decades. However, the extent of the reduction, the driving factors behind it, and the regional performance are not well clarified. This study constructs a comprehensive framework that integrates the impact pathway approach with index decomposition analysis to explore the driving factors behind the reduction of environmental externality from a spatial-temporal perspective. First, the Greenhouse Gas–Air Pollution Interactions and Synergies (GAINS) model is adopted in the impact pathway approach to assess the environmental losses in China's electric power industry. Second, the temporal index decomposition analysis is used to explore the driving factors behind the reduction in environmental losses during 2005–2020. Third, the spatial index decomposition analysis is employed to investigate the differences in environmental performance across regions and the driving forces behind these differences. The results show that the environmental losses caused by China's electric power industry have been significantly reduced from 3082.1 thousand years of life lost (YLL) in 2005 to 892.3 thousand YLL in 2020, mainly due to the reduction in air pollutant emissions, followed by the cleaner power structure and the adjustment of the spatial layout of electricity. While, increases in power generation scale, population size, and aging have played a negative role in reducing environmental losses. The gaps in environmental losses per unit of electricity between different provinces can be tens or even hundreds of times. The primary drivers of these gaps, apart from the power structure, are atmospheric dispersion conditions and population density. While, the differences in emission intensity effects among provinces are relatively small. Thus, the orientation of policy design needs to shift from setting stricter emission concentration limits to adjusting energy structure and enhancing the construction of electricity transfer channels. Government departments should consider the implicit environmental externality from a more macro perspective when conducting power planning and management.