Emissions Intensity Targeting: From China's 12th Five Year Plan to its Copenhagen Commitment

CAMA Working Paper 37/2012

35 Pages Posted: 17 Jul 2013

See all articles by Yingying Lu

Yingying Lu

Australian National University

Alison Stegman

Australian National University (ANU)

Yiyong Cai

Government of the Commonwealth of Australia - CSIRO (Commonwealth Scientific and Industrial Research Organisation); Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA)

Date Written: October 1, 2012

Abstract

China is currently the world’s largest single source of fossil fuel related CO2 emissions. In response to pressure from the international community, and in recognition of its role in global climate change mitigation, the Chinese government has announced a series of climate policy commitments, in both the Copenhagen Accord and its domestic 12th 5 Year Plan, to gradually reduce emissions intensity by 2020. Emissions intensity reduction commitments differ significantly from emission level reduction commitments that are commonly adopted by developed economies. In this paper, we investigate the economic implications of China’s recent commitments to reduce emissions intensity, and highlight the complexities involved in modelling intensity targets under uncertainty. Using G-Cubed, an intertemporal, computable general equilibrium model of the world economy, we show that China’s emissions intensity targets could be achieved with a range of low and high growth emissions level trajectories corresponding to low and high growth GDP scenarios, which lead to different welfare consequences.

Keywords: China, Emissions intensity targeting, Climate policy, G-Cubed model

JEL Classification: C68, D58, E37, Q43, Q54, Q58

Suggested Citation

Lu, Yingying and Stegman, Alison and Cai, Yiyong, Emissions Intensity Targeting: From China's 12th Five Year Plan to its Copenhagen Commitment (October 1, 2012). CAMA Working Paper 37/2012, Available at SSRN: https://ssrn.com/abstract=2294769 or http://dx.doi.org/10.2139/ssrn.2294769

Yingying Lu (Contact Author)

Australian National University ( email )

Canberra, Australian Capital Territory 2601
Australia

Alison Stegman

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Yiyong Cai

Government of the Commonwealth of Australia - CSIRO (Commonwealth Scientific and Industrial Research Organisation) ( email )

41 Boggo Rd
Dutton Park, Queensland
Australia

Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA) ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

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