11.4.3.5 Policy studies for China

The ERI (2003) report on three alternatives for China’s development to 2020 presents effects of policies that reduce CO₂ emissions in a ‘green growth’ scenario. For the same GDP growth of 7% per year, policies of accelerated economic reform, increased energy efficiency standards, higher taxes on vehicle fuels and more use of low-carbon technologies in power generation reduce the growth of CO₂ to 1.7% per year compared to 3.6% per year in an ‘ordinary effort’ scenario.

Chen (2005) presents a comparison of assumed marginal abatement cost curves and GDP costs associated with various reduction efforts in China in different models (see Figure 11.6 and Table 11.12 below). Chen (p. 891) discusses the reasons for the differences, which are largely due to differences in baselines and assumptions about available technologies and substitution between fossil and non-fossil energy. GDP costs for 2010 vary: 0.2 and 1.5% reduction compared to baseline, associated with a 20% reduction in CO₂ compared to baseline. Garbaccio et al. (1999) consider smaller CO₂ reductions – between 5 and 15% – and find not only lower costs, but potentially positive GDP effects after only a few years owing to a double-dividend effect.

Figure 11.6: A comparison of Marginal Abatement Curves for China in 2010 from different models

Source: adapted from Chen (2005, p. 891)