Reaping the Economic Benefits of Decarbonization for China

18 Pages Posted: 16 Sep 2014

See all articles by Teng Fei

Teng Fei

Tsinghua University

Frank Jotzo

Australian National University (ANU) - Crawford School of Public Policy

Multiple version iconThere are 2 versions of this paper

Date Written: September–October 2014

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.

Keywords: China, climate change mitigation, co‐benefits

JEL Classification: O44, Q48, Q54

Suggested Citation

Fei, Teng and Jotzo, Frank, Reaping the Economic Benefits of Decarbonization for China (September–October 2014). China & World Economy, Vol. 22, Issue 5, pp. 37-54, 2014, Available at SSRN: https://ssrn.com/abstract=2496676 or http://dx.doi.org/10.1111/j.1749-124X.2014.12083.x

Teng Fei (Contact Author)

Tsinghua University ( email )

Beijing, 100084
China

Frank Jotzo

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

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