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GTAP Resource #5579

"The Impact of China’s Carbon Trading Scheme"
by He, Jianwu and Shantong Li

To achieve the goal of controlling greenhouse gas emissions, the Chinese government has released the National Emission Trading Scheme (Power Sector) at the end of 2017. The Scheme pointed out that China’s will start the nationwide carbon emission trading system in the power generation industry (including combined heat and power) firstly and then cover more and more sectors in the carbon market.
However, the current carbon emissions trading system only involves the power industry, and power is still priced by government. It’s not clear whether the carbon emissions trading system can achieve the expected target. This paper attempts to construct a multi-regional (31 provinces) computable general equilibrium model to evaluate the impact of the current carbon trading scheme. In order to model the impacts of carbon trading scheme it is essential to include different power generation technologies in the model. There are five main power technologies operating in model: coal, natural gas, hydro, new renewables, and nuclear.
With multi-regional CGE model, this study will apply the method of scenario analysis to study the effects of China’s carbon trading system (CTS). The study will design a baseline scenario is prospect China’s economic development without carbon trading system. Based on baseline scenario, three contrasting scenarios are designed to capture the effects of CTS. First one is trading with fixed power price. In this scenario, China’s will implement carbon trading system and the emissions trading scheme will cover only the power sector. However the power is priced not by market, but government. Second is trading with free power price. In contrast with first one, this scenario will eliminate pricing restriction. Third is trading with all sectors. In this scenario, China’s will implement carbon trading scheme covering all sectors. Comparing the contrasting scenarios with baseline scenario, this study will analyze the effect China’s carbon trading scheme.

Resource Details (Export Citation) GTAP Keywords
Category: 2018 Conference Paper
Status: Published
By/In: Presented at the 21st Annual Conference on Global Economic Analysis, Cartagena, Colombia
Date: 2018
Created: He, J. (4/15/2018)
Updated: He, J. (4/15/2018)
Visits: 1,970
- Climate change policy
- Asia (East)

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