China’s Carbon Future: A Model-based Analysis

Brookings Institution / by Warwick J. McKibbin, Adele Morris, Peter J. Wilcoxen and Weifeng Liu
http://brook.gs/1kwHFZt

…[Findings] The results of the authors’ analysis show that illustrative policies to achieve China’s commitment to cause its [greenhouse gas] emissions to peak in 2030 imply a substantial departure from baseline emissions, even after accounting for large baseline reductions in China’s emissions intensity.

In the scenarios, Chinese emissions are 6 percent lower than baseline in 2020, 26 percent lower in 2040 and 33 percent lower by 2050. The reductions come at a cost; in 2030 in the policy scenarios, China’s real GDP would be about 1.5 percent lower than baseline, and real wages would grow less rapidly than they otherwise would have. At the same time, the target appears quite credible: the changes to peak emissions in 2030 are manageable for a country that will be growing rapidly in the coming decades and do not involve disruptions that would be likely to cause the commitment to be abandoned.

The authors also find that China’s policies to control emissions have little effect on emissions elsewhere; there is almost no shift in emissions from China to its trade partners. There are, however, small reductions in real GDP in other countries as China’s economy grows more slowly than under the baseline. Those changes are most important for Eastern Europe and the Former Soviet Union and OPEC, and are very small for Europe and the United States. Thus the authors find that countries that import energy-intensive goods from China would bear little of the burden of Chinese emissions control efforts.

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