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Estimation of CO 2 shadow price in Chinese provinces: an output distance function approach

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  • Yongrok Choi

Abstract

As the low-carbon issue become increasingly critical in the world. The marginal abatement cost (shadow price) of CO2 emission is a determinant in the carbon emissions trading market. This paper estimates the CO2 shadow price of different Chinese provinces based on the parametric approach: the output distance function. The results show that the average CO2 marginal abatement cost is 1.8 Y/T (0.28 $/T), much lower than the world carbon market price. If a regional carbon Emission Trading Scheme (ETS) is introduced in China, the market price of CO2 emission will be 0∼12 Y/T.

Suggested Citation

  • Yongrok Choi, 2012. "Estimation of CO 2 shadow price in Chinese provinces: an output distance function approach," International Journal of Innovation and Sustainable Development, Inderscience Enterprises Ltd, vol. 6(3), pages 281-289.
    • Handle: RePEc:ids:ijisde:v:6:y:2012:i:3:p:281-289
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    Cited by:

    1. Lin, Jing & Lin, Boqiang, 2018. "Heat tariff and subsidy in China based on heat cost analysis," Energy Economics, Elsevier, vol. 71(C), pages 411-420.

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