The Future of Natural Gas in China: Effects of Pricing Reform and Climate Policy
Name
MITJPSPGC_Rpt294.pdf
Size
1.97 MB
Format
Adobe PDF
Checksum (MD5)
d065de0badc65a14b3684bfe7b1a0076
Author(s)
Zhang, Danwei
Paltsev, Sergey
Date Issued
March 2016
Publisher
MIT Joint Program on the Science and Policy of Global Change
Citation
Report 294
Series/Report no.
MIT Joint Program Report Series;294
Abstract
China is currently attempting to reduce greenhouse gas emissions and increase natural gas consumption as a part of broader national strategies to reduce the air pollution impacts of the nation’s energy system. To assess the scenarios of natural gas development up to 2050, we employ a global energy-economic model—the MIT Economic Projection and Policy Analysis (EPPA) model. The results show that a cap-and-trade policy will enable China to achieve its climate mitigation goals, but will also reduce natural gas consumption. An integrated policy that uses a part of the carbon revenue obtained from the cap-and-trade system to subsidize natural gas use promotes natural gas consumption, resulting in a further reduction in coal use relative to the cap-and-trade policy case. The integrated policy has a very moderate welfare cost; however, it reduces air pollution and allows China to achieve both the climate objective and the natural gas promotion objective.
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