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Benefits and costs to China of a climate policy

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  • AUNAN, KRISTIN
  • BERNTSEN, TERJE
  • O'CONNOR, DAVID
  • PERSSON, THERESE HINDMAN
  • VENNEMO, HAAKON
  • ZHAI, FAN

Abstract

In future agreements to cut greenhouse gases, a Chinese commitment will probably be essential. Committing for China is easier if the cost is low and the benefit to China is high. Using a new CGE-model of the Chinese economy we discuss the cost and benefit to China of taking on a climate commitment. We argue that a climate commitment gives significant ancillary benefits to China since associated particle and NOx-reductions improve public health and increase agricultural yields. The model of impact on agricultural yields is a novel feature of CGE-models. Comparing benefits to economic costs produces striking results. We find that China may reduce its CO2-emissions by 17.5 per cent without suffering a welfare loss. Half of the benefit originates in the novel agricultural model. We also discuss the distributional impact of a climate commitment. In general the distributional impact is not averse.

Suggested Citation

  • Aunan, Kristin & Berntsen, Terje & O'Connor, David & Persson, Therese Hindman & Vennemo, Haakon & Zhai, Fan, 2007. "Benefits and costs to China of a climate policy," Environment and Development Economics, Cambridge University Press, vol. 12(3), pages 471-497, June.
    • Handle: RePEc:cup:endeec:v:12:y:2007:i:03:p:471-497_00
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    Cited by:

    1. Ikefuji, M. & Magnus, J.R. & Sakamoto, H., 2010. "Climate Change, Economic Growth, and Health," Other publications TiSEM 324fcdfb-279a-45b2-91e9-d, Tilburg University, School of Economics and Management.
    2. Michael Finus & Dirk T.G. Rübbelke, 2008. "Coalition Formation and the Ancillary Benefits of Climate Policy," Working Papers 2008.62, Fondazione Eni Enrico Mattei.
    3. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.
    4. Yang, Xi & Teng, Fei & Xi, Xiaoqian & Khayrullin, Egor & Zhang, Qi, 2018. "Cost–benefit analysis of China’s Intended Nationally Determined Contributions based on carbon marginal cost curves," Applied Energy, Elsevier, vol. 227(C), pages 415-425.
    5. Vennemo, Haakon & Aunan, Kristin & Jianwu, He & Tao, Hu & Shantong, Li, 2009. "Benefits and costs to China of three different climate treaties," Resource and Energy Economics, Elsevier, vol. 31(3), pages 139-160, August.
    6. Wagner, Ulrich J. & De Preux, Laure, 2016. "The Co-Benefits Of Climate Policy: Evidence From The Eu Emissions Trading Scheme," VfS Annual Conference 2016 (Augsburg): Demographic Change 145800, Verein für Socialpolitik / German Economic Association.
    7. Anping Chen & Nicolaas Groenewold, 2014. "The regional economic effects of a reduction in carbon emissions and an evaluation of offsetting policies in China," Papers in Regional Science, Wiley Blackwell, vol. 93(2), pages 429-453, June.
    8. Haakon Vennemo & Jianwu He & Shantong Li, 2014. "Macroeconomic Impacts of Carbon Capture and Storage in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(3), pages 455-477, November.
    9. Takashima, Nobuyuki, 2017. "International environmental agreements with ancillary benefits: Repeated games analysis," Economic Modelling, Elsevier, vol. 61(C), pages 312-320.
    10. Dirk T.G. Rübbelke & Nathan Rive, 2008. "Effects of the CDM on Poverty Eradication and Global Climate Protection," Working Papers 2008.93, Fondazione Eni Enrico Mattei.
    11. Michael Finus & Dirk Rübbelke, 2013. "Public Good Provision and Ancillary Benefits: The Case of Climate Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 211-226, October.
    12. Pittel, Karen & Rübbelke, Dirk T.G., 2008. "Climate policy and ancillary benefits: A survey and integration into the modelling of international negotiations on climate change," Ecological Economics, Elsevier, vol. 68(1-2), pages 210-220, December.
    13. Elizabeth A. Stanton & Frank Ackerman, 2009. "Climate and development economics: Balancing science, politics and equity," Natural Resources Forum, Blackwell Publishing, vol. 33(4), pages 262-273, November.
    14. Vennemo, Haakon & Aunan, Kristin & He, Jianwu & Hu, Tao & Li, Shantong & Rypd3al, Kristin, 2008. "Environmental impacts of China's WTO-accession," Ecological Economics, Elsevier, vol. 64(4), pages 893-911, February.
    15. Anping Chen & Nicolaas Groenewold, 2013. "Regional Effects in China of an Emissions-Reduction Policy: Tax v. Subsidy," ERSA conference papers ersa13p1275, European Regional Science Association.
    16. Pedro Antonio Martín Cervantes & Nuria Rueda López & Salvador Cruz Rambaud, 2020. "Life Expectancy at Birth in Europe: An Econometric Approach Based on Random Forests Methodology," Sustainability, MDPI, vol. 12(1), pages 1-17, January.
    17. Bingbing, Jiang & Zhaohua, Lee, 2010. "The measurement of barriers to services trade and its impact on Chinese services export," Conference papers 332002, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Ho, Mun & Wang, Zhongmin, 2014. "Green Growth (for China): A Literature Review," RFF Working Paper Series dp-14-22, Resources for the Future.

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