• Energy Research

Abstract It is necessary to measure the economic impacts of the attempts to achieve China’s carbon emission intensity reduction target. Consequently, this study analyzes the economic impacts of the differentiated CO2 intensity targets between Guangxi Province and the rest of China. An improved two-region computable general equilibrium model with eight scenarios is used. Our results show that different CO2 intensity targets in different regions will affect Guangxi’s GDP, carbon price, welfare, and output. The highest reduction target of 75% in the P75C65 scenario in Guangxi will lead to a cost of 0.42% in per capita GDP loss, 0.51% of welfare loss, and a carbon price of 49.4 USD/t. In addition, the output of the energy-intensive sectors is most vulnerable to carbon mitigation policy. The two mechanisms that affect economic indicators are price and scale effects. Under the P75C65 scenario, sectors such as vehicle manufacturing are winners and are affected by both price and scale effects in Guangxi, with export, provincial outflow, domestic supply, and output decreasing by 1.64%, 0.88%, 0.93%, and 0.93%, respectively. In contrast, sectors such as agriculture are losers and are affected by the scale effect, with these four indicators increasing by 1.25%, 0.97%, 0.59%, and 0.73%, respectively. These findings provide valuable insights for policy makers who wish to allocate provincial reduction targets and achieve co-benefits between the economy and the environment.

Abstract Renewable energy has a critical role in limiting the greenhouse gas (GHG) emissions. This paper assesses the implication of aligning renewable energy deployment target with national emission reduction target for mitigation cost. The assessment methodology uses Asia-Pacific Integrated Assessment/computable general equilibrium (AIM/CGE) model to determine the mitigation cost in terms of GDP and welfare loss under alternative renewable targets in different climate-constrained scenarios. A range of country-specific emission constraints is taken to address the uncertainties related to global emission pathway and emission entitlement scheme. Comparative results show that China needs to increase its share of non-fossil fuel significantly in the primary energy mix to achieve the stringent emission reduction target compared to India. The mitigation cost in terms of economic and welfare loss can be reduced by increasing the penetration of the renewable energy to achieve the same emission reduction target. The modeling results show that coordinated national climate and renewable energy policies help to achieve the GHG emission reduction target in an efficient and cost-effective manner.

In the global effort to mitigate climate change, the cement sector remains highly emission-intensive and hard-to-decarbonize. Previous research has highlighted material efficiency strategies─including more intensive use, lifetime extension, material-efficient design, and end-of-life processes, as demand-side options for reducing emissions. However, unintended effects and supply side responses, such as shifts in technological portfolios and investment trends, remain underexplored. This study develops a framework that couples detailed stock-flow modeling and a bottom-up energy system optimization model, a subcategory of integrated assessment models. Taking China's cement sector as a pilot case, our framework projects comprehensive decarbonization pathways for cement-based materials. The results show that material efficiency strategies could reduce cement demand by 57%, significantly decreasing reliance on supply side technologies required for net-zero emissions, with these strategies contributing nearly 50% of the cumulative decarbonization effort. The material efficiency strategies also reduce the incremental total production costs associated with low-carbon technologies in upstream sectors. When combined with CO2 uptake from cement-based materials, this study offers a cost-effective pathway for achieving net-zero emissions in the cement sector, lowering both costs and CO2 emissions without heavy dependence on carbon capture and storage.

Based on the Computable General Equilibrium (CGE) model and scenario analysis, the impacts of the U.S. withdrawal from the Paris Agreement on the carbon emission space and mitigation cost in China, European Union (EU), and Japan are assessed under Nationally Determined Contributions (NDCs) and 2 °C scenarios due to the changed emission pathway of the U.S. The results show that, under the condition of constant global cumulative carbon emissions and a fixed burden-sharing scheme among countries, the failure of the U.S. to honor its NDC commitment to different degrees will increase the U.S. carbon emission space and decrease its mitigation cost. However, the carbon emission space of other parties, including China, EU, and Japan, will be reduced and their mitigation costs will be increased. In 2030, under the 2 °C target, the carbon price will increase by 4.4–14.6 US$ t−1 in China, by 9.7–35.4 US$ t−1 in the EU, and by 16.0–53.5 US$ t−1 in Japan. In addition, China, EU, and Japan will incur additional Gross Domestic Production (GDP) loss. Under the 2 °C target, the GDP loss of China would increase by US$22.0–71.1 billion (equivalent to 16.4–53.1 US$ per capita), the EU's GDP loss would increase by US$9.4–32.1 billion (equivalent to 20.7–71.1 US$ per capita), and Japan's GDP loss will increase by US$4.1–13.5 billion (equivalent to 34.3–111.6 US$ per capita).

Climate change mitigation involves reducing fossil fuel consumption and greenhouse gas emissions, which is expensive, particularly under stringent mitigation targets. The co-benefits of reducing air pollutants and improving human health are often ignored, but can play significant roles in decision-making. In this study, we quantified the co-benefits of climate change mitigation on ambient air quality and human health in both physical and monetary terms with a particular focus on Asia, where air quality will likely be degraded in the next few decades if mitigation measures are not undertaken. We used an integrated assessment framework that incorporated economic, air chemistry transport, and health assessment models. Air pollution reduction through climate change mitigation under the 2 °C goal could reduce premature deaths in Asia by 0.79 million (95% confidence interval: 0.75-1.8 million) by 2050. This co-benefit is equivalent to a life value savings of approximately 2.8 trillion United States dollars (USD) (6% of the gross domestic product [GDP]), which is decidedly more than the climate mitigation cost (840 billion USD, 2% of GDP). At the national level, India has the highest potential net benefit of 1.4 trillion USD, followed by China (330 billion USD) and Japan (68 billion USD). Furthermore, in most Asian countries, per capita GDP gain and life value savings would increase with per capita GDP increasing. We robustly confirmed this qualitative conclusion under several socioeconomic and exposure-response function assumptions.

Abstract Private passenger vehicles, with its high emissions of CO2 and air pollutants, poses a severe threat to global climate and human health, particularly for a large developing country like China. Although both energy efficiency improvement of internal combustion engine vehicles (ICEVs) and the wide adoption of electric vehicles (EVs) could contribute to reducing emissions, how they should be jointly implemented in provinces with a heterogeneous context to maximize their net benefits remains insufficiently explored. Here, based on an integrated modeling framework associated with one factual (REF) and four counterfactual scenarios to explore the priority and best-ranked ordering of both EVs’ penetration and high energy-efficient ICEVs in 31 Chinese provinces to achieve the most environmental and human health benefits from 2011 to 2018. The results demonstrate that electrification of the passenger fleet, which is charged by a slightly cleaner power source relative to 2011, yields significant co-benefits of CO2 reduction and air quality improvement. Compared with REF, the fleet electrification scenario would lead to 3167 cases of avoided mortality and attain US$4.269 billion of health benefits in 2018, accounting for 0.03% of China’s gross domestic product. Nonetheless, highly efficient ICEVs are found to harbor decarbonization potential and health benefits in northern China. Based on these results, Sichuan, Hebei and seven other provinces in east China should promote EVs imminently; conversely, eight provinces with a high share of thermal power must continually advance their implementation of ICEVs in the near future. Such prioritization of EVs and ICEV development at the provincial level provides timely insights for devising tailored policies regarding passenger car transition and for maximizing climate and health benefits based on regional heterogeneity.

Abstract Emission trading scheme (ETS) is considered as a cost-effective way to cut emissions. This study evaluates the economic impacts of ETS policy by using a static computable general equilibrium (CGE) model in Shanghai, one of China’s seven ETS pilots. Three scenarios are set considering the target of Intended Nationally Determined Contributions (INDC) by 2030, including a reference scenario, carbon cap without ETS scenario and with ETS scenario. This study shows that ETS would reduce GDP loss due to carbon mitigation from 1.3% to 1.1% relative to baseline level in 2020 and 2.3% to 2.2% in 2030. The trading carbon price in 2020 and 2030 would be 38 and 69 USD/ton and the trade volume would be 4.9 and 6.2 million ton carbon dioxide, respectively. Air transport sector would be the major buyer of emissions credit due to its comparatively higher carbon abatement cost whereas iron & steel, electricity sectors would be the main sellers. However, the above findings are sensitive to various policy arrangements such as renewable energy development and carbon allowance allocation method. This study concludes that carbon cap-and-trade could reduce adverse economic output and employment impact. Policy makers should carefully design the cap allocation scheme since it is a key factor that determines carbon trading price and trade volume.

Abstract This study investigates the impacts of launching a national carbon trade market through the IMED|CGE (Integrated Model of Energy, Environment and Economy for Sustainable Development|Computable General Equilibrium) model, between Shanghai and the Rest of China (ROC). Five scenarios are established by considering China’s Nationally Determined Contributions (NDC) targets, including a baseline scenario (BaU scenario), a carbon cap on ETS participating sectors scenario (CAPsec scenario), a carbon cap on Shanghai and ROC regions scenario (CAPreg scenario), a carbon cap scenario with local carbon emissions trading among ETS participating sectors (ETsec scenario) and a carbon cap scenario with inter-regional carbon emissions trading (ETreg scenario). The results under the ETreg scenario predict a carbon price of 164.64 USD/tCO2 and a total carbon trade volume of 189.91 Mt by 2030. The metal smelting sector will be the largest seller of emissions quotas in Shanghai, whereas the power generation sector will be the largest buyer. Due to its higher carbon mitigation cost and increasing autonomous carbon intensity, the aviation sector will face more challenges to reduce emissions among ETS participating sectors in Shanghai. The results indicate that launching a national carbon trade market could generate both economic and environmental benefits and help China achieve its NDC targets.