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Quantifying Regional Economic Impacts of CO2 Intensity Targets in China

Research and Teaching Output of the MIT Community

Show simple item record Zhang, Da Rausch, Sebastian Karplus, Valerie Zhang, Xiliang 2012-09-17T17:19:59Z 2012-09-17T17:19:59Z 2012-09-01
dc.description.abstract To address rising energy use and CO2 emissions, China’s leadership has enacted energy and CO2 intensity targets under the Twelfth Five-Year Plan (2011–2015), which are defined at both the national and provincial levels. We develop a computable general equilibrium (CGE) model with global coverage that disaggregates China’s 30 provinces and includes energy system detail, and apply it to assess the impact of provincial CO2 emissions intensity targets. We compare the impact of the provincial targets approach to a single national target for China that achieves the same reduction in CO2 emissions intensity at the national level. We find that at the national level, the national target results in 25% lower welfare loss relative to the provincial targets approach. Given that the regional distribution of impacts has been an important consideration in the target-setting process, we focus on the changes in provincial level CO2 emissions intensity, CO2 emissions, energy consumption, and economic welfare. We observe significant heterogeneity across provinces in terms of the energy system response as well as the magnitude and sometimes sign of welfare impacts. We further model the current policy of fixed end-use electricity prices in China and find that national welfare losses increase. Assumptions about capital mobility have a substantial impact on national welfare loss, while assumptions about natural gas resource potential does not have a large effect. en_US
dc.description.sponsorship We acknowledge the support of the Ministry of Science and Technology of China through the Institute for Energy, Environment, and Economy at Tsinghua University, and the support from Graduate School of Tsinghua University, which is supporting Zhang Da’s doctoral research as a 22 visiting scholar at the Massachusetts Institute of Technology. We are also grateful for the support provided by Rio Tinto China and Social Science Key Research Program from National Social Science Foundation, China of Grant no. 09&ZD029. We further acknowledge the support of Eni S.p.A., ICF International, and Shell, founding sponsors of the China Energy and Climate Project, for supporting this model development work. We would further like to thank Dr. John Reilly, Dr. Sergey Paltsev, Dr. Kyung-min Nam, Dr. Henry Chen, Paul Kishimoto and Tianyu Qi at Joint Program on the Science and Policy of Global Change, and participants in the annual meeting of China Energy and Climate Project and EcoMod 2012 Conference for helpful comments and discussion. 23 en_US
dc.language.iso en_US en_US
dc.publisher MIT Joint Program on the Science and Policy of Global Change en_US
dc.relation.ispartofseries Joint Program Reports;230
dc.rights An error occurred on the license name. en
dc.rights.uri An error occurred getting the license - uri. en
dc.title Quantifying Regional Economic Impacts of CO2 Intensity Targets in China en_US
dc.type Technical Report en_US
dc.identifier.citation Report 230 en_US

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