Quantifying Regional Economic Impacts of CO2 Intensity Targets in China
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MITJPSPGC_Rpt230.pdf
Description
main article
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2.21 MB
Format
Adobe PDF
Checksum (MD5)
28b5851ae2cae08466bec403c002fe56
Author(s)
Zhang, Da
Rausch, Sebastian
Karplus, Valerie
Zhang, Xiliang
Date Issued
September 1, 2012
Publisher
MIT Joint Program on the Science and Policy of Global Change
Citation
Report 230
Series/Report no.
Joint Program Reports;230
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.
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