Reaping the Economic Benefits of Decarbonization for China

17 Pages Posted: 20 Feb 2016

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: August 15, 2014


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 (August 15, 2014). Crawford School of Public Policy, The Australian National University. CCEP Working Paper No. 1413, Available at SSRN:

Teng Fei

Tsinghua University ( email )

Beijing, 100084

Frank Jotzo (Contact Author)

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

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