Yinying PhD Conference 2012

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Yinying PhD Conference 2012

  1. 1. Emissions  Intensity  Targe0ng:   From  China's  12th  Five  Year  Plan  to  its   Copenhagen  Commitment Yingying  Lu   Centre  for  Applied  Macroeconomic  Analysis   Crawford  School  of  Public  Policy   2012  Crawford  PhD  conference,  November  27,  2012
  2. 2. Mo?va?on In  2010,  energy   related  CO2   emissions  from   China,  accounted   for  a  quarter  of  the   world  total. China  is  currently  the   world’s  largest  single   source  of  fossil  fuel   related  CO2  emissions. Source:  EIA  staDsDcs.
  3. 3. Mo?va?on •  China’s  Response   –  Interna?onal  commitment:  the  Copenhagen  Commitment   •  By  2020,  emissions  intensity  reduced  by  40%-­‐45%  rela0ve  to  2005   –  Domes?c  commitment:  the  12th  Five-­‐Year-­‐Plan   •  By  2015,  emissions  intensity  reduced  by  17%  rela0ve  to  2010  
  4. 4. Mo?va?on 2010 2015 2020 Start  of   12-­‐5YP End  of   12-­‐5YP 12-­‐5YP  emissions  intensity   reduc0on  target Copenhagen  emissions   intensity  reduc0on  target Cut-­‐off  of   Copenhagen  Accord  If  both  targets  are  just  met….    Emissions  intensity  VS.   emissions  level    Future  uncertain?es   2012 Regime  transi0on Mr.  Hu Mr.  Xi
  5. 5. Research  Ques?ons •  How  stringent  are  the  two  targets  in  terms  of  absolute   emissions  reduc?ons?   •  What  is  the  rela?onship  between  China’s  2015  domes?c   commitment  and  its  2020  Copenhagen  commitment?   •   What  are  the  policy  implica?ons  of  targe?ng  emissions   intensity?  How  do  these  differ  from  emissions  level  targe?ng?   •  How  to  appropriately  model  intensity  targets,  par?cularly   when  future  uncertainDes  are  important?
  6. 6. Modelling  Approach •  G-­‐Cubed  model  (developed  by  McKibbin  &  Wilcoxen)   –  Version  108E:  9  regions,  12  sectors  (6  energy  sectors)   •  Assump?ons  about  climate  policy   –  In  the  form  of  carbon  tax   –  A  par?cular  rule  of  carbon  tax  path:  increase  by  4%  each  year   –  Recycling  of  carbon  tax  revenues     •  Policy  simula?on  algorithm  
  7. 7. Baseline  Projec?on-­‐-­‐China Real  GDP  projec?ons CO2  emissions  projec?ons CO2  emissions  intensity  projec?ons
  8. 8. Policy  Scenarios 2013 Scenario   CH20 2013 Scenario   CH1520_Q 2015 2020 Tax  path  from   CH1520  ?ll  2015 Cumula?ve  emissions  over   2013-­‐2020  from  CH20 Just  hit! Just  hit! Just  hit! 2020   Intensity   Target 2015   Intensity   Target 2013 Scenario   CH1520 2020   Intensity   Target
  9. 9. Results:  Carbon  Tax  Path Source: Policy simulations from G-Cubed (version 108E). Carbon  tax  paths  from  all  the  policy  scenarios  under  baseline A  tax  rate  jump  under  the   par0cular  policy  rule!
  10. 10. Results:  GDP  and  Emissions   Devia?ons  of  real  GDP   rela?ve  to  baseline Devia?ons  of  emissions   rela?ve  to  baseline Source: Policy simulations from G-Cubed (version 108E).  Less  cumula?ve  emissions   reduced  in  CH1520    Less  cumula?ve  GDP  loss   in  CH1520    But  targe?ng  cumula?ve   emissions  (CH1520_Q)  will   incur  more  GDP  loss.
  11. 11. Sensi?vity  Analysis:  Baseline  Assump?ons Emissions  intensi?es  based   on  different  baseline   assump?ons CH1520  scenarios  based  on   different  baselines Source: Policy simulations from G-Cubed (version 108E). The  results  are  qualita?vely   robust  with  different   baseline  assump?ons.
  12. 12. Sensi?vity  Analysis:  Unexpected  shocks Source: Policy simulations from G-Cubed (version 108E). In  high-­‐growth  periods,  the  policy  is  eased  under  emissions  intensity  targe?ng.   In  low-­‐growth  periods,  an  intensity  target  further  restricts  the  emissions   growth.
  13. 13. Thank you for your attention!
  14. 14. Policy  simula?on  algorithm  

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