Emission patterns and marginal abatement cost of CO2 of world's largest pulp and paper production sector: An enterprise based estimation of China

As the world's leading paper producer and consumer, China's pulp and paper production sector poised to significantly contribute to global carbon emissions reduction in this sector. To assess the economic feasibility of CO2 reduction measures, this study estimated the least CO2 emission marginal abatement costs for 217 pulp production enterprises and 3817 paper production enterprises in China from 2008 to 2015. The estimation used a developed parametric directional distance function, considering various production and emission reduction strategies aligned with China's emission intensity reduction target. The estimation of marginal abatement costs incorporates emission abatement levels ranging from 1 to 100 % to facilitate the creation of marginal abatement cost curves. This study applied four specific emission reduction measures (i.e., expanding intermediate inputs, downsizing production, augmenting labor inputs, and enhancing capital investment) to identify the lowest marginal abatement cost. Additionally, we further explore the emission patterns among different enterprise sizes. Key findings include: i) The average annual marginal abatement costs for China's pulp and paper production sectors are 2059 CNY/tCO2 and 3908 CNY/tCO2 in this study during 2008–2015, respectively. ii) When the emission abatement levels of the pulp and paper production sectors exceed 35 % and 50 % respectively, the escalation in the CO2 emission marginal abatement costs becomes more pronounced. iii) Over 80 % of pulp and paper production enterprises opt for expanding intermediate inputs to achieve the least marginal abatement costs. iv) Compared to medium enterprises and small and micro enterprises, large pulp and paper production enterprises exhibit lower annual average marginal abatement costs, at 1162 CNY/tCO2 and 1840 CNY/tCO2 respectively, which are primarily located in the high-emission and low-abatement-cost pattern.