Achieving Copenhagen target through carbon emission trading: Economic impacts assessment in Guangdong Province of China. (1st January 2015)

• Record Type: Journal Article
• Authors: Wang, Peng; Dai, Han-cheng; Ren, Song-yan; Zhao, Dai-qing; Masui, Toshihiko
• Is Part Of: Energy. Volume 79:(2015)
• Page Start: 212
• Page End: 227
• Publication Date: 2015-01-01
• Subjects: Carbon emission trading -- General equilibrium model -- Carbon trading price; Power resources -- Periodicals; Power (Mechanics) -- Periodicals; Energy consumption -- Periodicals; 333.7905
• DOI: 10.1016/j.energy.2014.11.009
• Languages: English
• ISSNs: 0360-5442

Abstract

Abstract: This study analyzed the economic impacts of carbon ETS (emission trading scheme) policy among four energy intensive sectors in Guangdong province with a two-region dynamic CGE model. Five cases are considered to achieve Copenhagen target towards 2020 in Guangdong, including a reference case, two cases under different carbon emission constraints without carbon ETS, and two cases with ETS. The simulation results show that carbon price and economic impacts are closely related to both emission constraints and ETS. In the scenario that overshoots Copenhagen target and does not consider ETS, carbon mitigation cost of refinery and iron & steel sectors would be relatively higher whereas that of power and cement sectors would be lower, and the GDP (gross domestic production) loss would be 1.4%. On the contrary, with ETS implemented, the trading carbon price would be 38 USD (US Dollar)/ton-CO2, creating a carbon market of around 1 billion USD. Furthermore, ETS could significantly reduce the mitigation cost for the whole economy. The GDP of Guangdong province would recover by 2.6 billion USD. In addition, the economic output and employment of sectors with would be affected compared to the scenario without ETS. Highlights: We assessed emission trading policy among four sectors at provincial level in China. We assessed the economic impacts of carbon emission trading. Power and cement sectors have lower mitigation cost and could be sellers of carbon credit. Refinery and iron and steel sectors have higher mitigation cost and could be carbon buyer. Emission trading could reduce the economic costs of achieving Copenhagen commitment.