Implications for Provincial Economies of Meeting China's NDC through an Emission Trading Scheme : A Regional CGE Modeling Analysis
This study analyzes the potential impacts of a national emission trading scheme on provincial economies in China of meeting China's emission reduction pledges, the Nationally Determined Contributions announced under the Paris Agreement. The st...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/936771561121209039/Implications-for-Provincial-Economies-of-Meeting-Chinas-NDC-through-an-Emission-Trading-Scheme-A-Regional-CGE-Modeling-Analysis http://hdl.handle.net/10986/31974 |
| Summary: | This study analyzes the potential
impacts of a national emission trading scheme on provincial
economies in China of meeting China's emission
reduction pledges, the Nationally Determined Contributions
announced under the Paris Agreement. The study developed a
multiregional, multisectoral, recursive-dynamic computable
general equilibrium model and calibrated it with the latest
provincial-level social accounting matrices (2012). The
study shows that meeting China's Nationally Determined
Contributions through an emission trading scheme would
reduce almost 30 percent of the emission reduction from the
business as usual scenario in 2030. If the baseline is
corrected based on information from a bottom-up energy
sector model, TIMES, the required reduction of emissions
from the baseline in 2030 drops by half, to 15 percent. At
the national level, the emission trading scheme would cause
a 1.2 to 1.5 percent reduction in gross domestic product
from the business as usual scenario in 2030. If the baseline
is corrected, the impact on gross domestic product drops by
two-thirds. The emission trading scheme would cause some
provincial economies to gain and others to lose. The
economic impacts are highly sensitive to the allowance
allocation rules. Not only the magnitudes, but also the
directions of the economic impacts alter when the allocation
rules change. The provinces that rely on coal mining or
coal-intensive manufacturing industries are found to
experience relatively larger economic losses irrespective of
the allowance allocation rules. |
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