China Can Grow And Still Help Prevent The Tragedy Of The Co2 Commons
Under reasonable assumptions, China could achieve parity in living standard with Western Europe by 2100, and India by 2150. Climate change, however, may be a key obstacle preventing such a convergence. The business-as-usual (BAU) growth path of the world might increase concentration of atmospheric to unsafe levels and cause significant negative environmental feedback before China achieves parity in living standards with the OECD countries. We use a dynamic multi-country general equilibrium model (the G-Cubed Model) to project a realistic BAU trajectory of CO2 emissions, and we find it to be even above the CO2 emissions from the high-growth scenario estimated by the Energy Information Agency in 2007. This outcome is a reminder that it has been usual so far to underestimate the growth in China energy consumption. We compare the merits of the different market-based CO2 reduction mechanisms like a carbon tax, a cap-and-trade scheme, and the McKibbin-Wilcoxen Hybrid (MWH) approach. Unexpected developments cause the different CO2 reduction mechanisms to create very different costs. Both the international carbon tax and the MWH approach are more economically efficient responses to uncertainty than the cap-and-trade scheme of the Kyoto Protocol. We use the G-Cubed Model to study the economic outcomes under each CO2 reduction mechanism, and under the deployment of advanced green energy. The reduction of CO2 emissions would only delay, not stop, the increase in CO2 concentrations toward the “danger level”. As the only long-term solution is likely to be shifting to non-fossil emitting energy, it is important to combine a market-based CO2 reduction mechanism with an ambitious program to accelerate the development of green technology. Such a program would probably have a higher chance of success if some important parts of it were based on international collaboration. We conclude the paper with recommendations about the form of future international climate agreements and how China could be encouraged to participate.
|Date of creation:||Jun 2008|
|Contact details of provider:|| Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 2601|
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: http://cama.crawford.anu.edu.au
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McKibbin, Warwick J. & Pearce, David & Stegman, Alison, 2007. "Long term projections of carbon emissions," International Journal of Forecasting, Elsevier, vol. 23(4), pages 637-653.
- Ross Garnaut & Stephen Howes & Frank Jotzo & Peter Sheehan, 2008. "Emissions in the Platinum Age: the implications of rapid development for climate-change mitigation," Oxford Review of Economic Policy, Oxford University Press, vol. 24(2), pages 377-401, Summer.
- Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, December.
When requesting a correction, please mention this item's handle: RePEc:een:camaaa:2008-14. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cama Admin)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.