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GTAP Resource #6853

"China’s Nationwide CO2 Emissions Trading System: A General Equilibrium Assessment"
by Goulder, Lawrence, Xianling Long, Chenfei Qu and Da Zhang

China has launched an ambitious nationwide program to reduce emissions of CO2 and address climate change. Introduced in 2021, the program has already become the world’s largest emissions trading system. It is expected to make a major contribution toward meeting China’s pledge to peak its emissions before 2030 and achieve net-zero CO2 emissions before 2060. The new system is a tradable performance standard (TPS), a rate-based system under which each covered facility receives from the government in each compliance period a certain number of emissions allowances based on its output and the government’s assigned “benchmark” ratio of emissions per unit of output. In general, the benchmarks are set below the average initial emissions intensities across the covered facilities, which implies that the TPS will require an overall reduction in the emissions- output ratio. China’s TPS is an example of an output-oriented emissions intensity standard, as it imposes a ceiling on the ratio of emissions to output.¹ It can be contrasted with input- oriented rate-based standards, which impose floors on the ratio of “clean” (low-polluting) to “dirty” (high-polluting) inputs to production. Examples include low-carbon fuel standards, which have been introduced in several US states, and renewable portfolio standards, which establish a floor on the ratio of renewables-generated to fossil-generated electricity purchased by electric utilities. These standards implicitly subsidize the cleaner inputs and tax the dirtier ones.

Resource Details (Export Citation) GTAP Keywords
Category: 2023 Conference Paper
Status: Published
By/In: Presented during the 26th Annual Conference on Global Economic Analysis (Bordeaux, France)
Date: 2023
Created: Goulder, L. (4/11/2023)
Updated: Goulder, L. (4/11/2023)
Visits: 558
- Advances in quantitative methods
- Model extension/development
- Climate change policy
- Climate impacts
- GTAP Data Base and extensions
- Other data bases and data issues
- Domestic policy analysis
- Asia (East)

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