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Reaping the Economic Benefits of Decarbonization for China

Author

Listed:
  • Fei Teng

    () (Institute of Energy, Environment and Economy, Research Center for Contemporary Management, Tsinghua University)

  • Frank Jotzo

    () (Crawford School of Public Policy, The Australian National University)

Abstract

China needs to reduce its carbon emissions if global climate change mitigation is to succeed. Conventional economic analysis views cutting emissions as a cost, creating a collective action problem. However, decarbonization can improve productivity and provide co-benefits that accord with multiple national policy objectives. We track China's progress in reducing the emissions intensity of the economy, and construct a macro scenario with China's carbon emissions peaking in the 2020s. Investment in greater energy productivity and economic restructuring away from heavy industries can bring productivity gains, and decarbonization of energy supply has important co-benefits for air pollution and energy security. Combined with lower climate change risks and the likelihood that China's actions will influence other countries, this suggests that cutting carbon emissions is not only in China's self-interest but also in the global interest. To properly identify the true costs and benefits of climate change action requires new thinking in economic analysis.

Suggested Citation

  • Fei Teng & Frank Jotzo, 2014. "Reaping the Economic Benefits of Decarbonization for China," CCEP Working Papers 1413, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:ccepwp:1413
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    File URL: https://ccep.crawford.anu.edu.au/sites/default/files/publication/ccep_crawford_anu_edu_au/2015-07/ccep1413.pdf
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    References listed on IDEAS

    as
    1. Thomas B. Johansson & Nebojsa Nakicenovic, 2012. "The Global Energy Assessment," Review of Environment, Energy and Economics - Re3, Fondazione Eni Enrico Mattei, October.
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    4. Jotzo, Frank, 2013. "Emissions trading in China: Principles, design options and lessons from international practice," Working Papers 249405, Australian National University, Centre for Climate Economics & Policy.
    5. Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 157-183, August.
    6. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
    7. Stern, David I. & Jotzo, Frank, 2010. "How ambitious are China and India's emissions intensity targets?," Energy Policy, Elsevier, vol. 38(11), pages 6776-6783, November.
    8. Zhang, Da & Karplus, Valerie J. & Cassisa, Cyril & Zhang, Xiliang, 2014. "Emissions trading in China: Progress and prospects," Energy Policy, Elsevier, vol. 75(C), pages 9-16.
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    11. Richard Baron & André Aasrud & Jonathan Sinton & Nina Campbell & Kejun Jiang & Xing Zhuang, 2012. "Policy Options for Low‐Carbon Power Generation in China: Designing an Emissions Trading System for China's Electricity Sector," IEA Energy Papers 2012/12, OECD Publishing.
    12. Jotzo, Frank, 2012. "Australia’s carbon price," Working Papers 249401, Australian National University, Centre for Climate Economics & Policy.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. China heads for a price on carbon amid an energy market overhaul
      by Frank Jotzo, Director, Centre for Climate Economics and Policy at Australian National University in The Conversation on 2014-09-19 08:59:13
    2. China heads for a price on carbon amid an energy market overhaul
      by ? in ANU News on 2014-09-19 11:27:00
    3. Energy market reform needed as China heads for national emissions trading
      by Frank Jotzo in East Asia Forum on 2014-09-23 17:00:10

    Citations

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    Cited by:

    1. Zhang, ZhongXiang, 2016. "Are China’s Climate Commitments in a Post-Paris Agreement Sufficiently Ambitious?," MITP: Mitigation, Innovation and Transformation Pathways 249785, Fondazione Eni Enrico Mattei (FEEM).
    2. Sam Fankhauser & Frank Jotzo, 2017. "Economic growth and development with low-carbon energy," CCEP Working Papers 1705, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
    3. Zhang, ZhongXiang, "undated". "Making China the transition to a low-carbon economy: Key challenges and responses," Working Papers 249516, Australian National University, Centre for Climate Economics & Policy.

    More about this item

    Keywords

    China; climate change mitigation; co-benefits;

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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