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GTAP Resource #7265

"Economic and Environmental Impacts of Phasing Out Coal Power Generation in East Asia"
by Peng, Xiujian, Xunpeng Shi and Janine Dixon

As major coal users, phasing our coal in China, Japan and Korea will be crucial for them to achieve carbon neutrality. However, a substantial reduction in coal usage will necessitate a dramatic change in the energy structure, which will have significant implications for a country's economy as well as its trading partners' economies. Using a global computable general equilibrium model - GTAP_E, this paper explores the economic implications of phasing out coal use in power generation in China, Japan and Korea. Specifically, this paper investigates the effects of this action on various economic indicators such as real GDP, capital stock, trade and industrial output in these three counties, ASEAN and other regions, along with carbon emissions repercussions.

Our findings reveal that in scenarios where renewable energy costs are equivalent to coal, phasing out coal power in China, Japan, and Korea slightly benefits their economies, with slight GDP increases observed. However, when renewable energies are presumed to be 50% more expensive, a notable economic downturn is predicted for these countries, negatively impacting other regions except for India and the European Union. This transition is also expected to significantly lower global CO2 emissions by over 12% in cost-neutral scenarios and 13% in scenarios with higher renewable costs.

We also notice that countries reliant on coal exports, such as Mongolia, Australia, Russia, and Indonesia, will inevitably face challenges regardless of whether phasing out coal power proves to be cost-neutral or costly. These nations must proactively seek avenues to diversify their economic structures and mitigate the adverse effects of the energy transition on greenhouse gas emission reduction efforts.

Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Created: Peng, X. (4/14/2024)
Updated: Peng, X. (4/14/2024)
Visits: 26
- Climate change policy
- Economic growth
- Asia (East)

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