The impacts of economic structure on China’s carbon dioxide emissions: an analysis with reference to other East Asian economies

A change in economic structure influences the total energy consumption as well as CO₂ emissions of a country, given the inherent difference in levels of energy intensity and energy fuel mix of different economic sectors. Its significance has been recognized in recent literature on China’s emission mitigation which could arguably raise China’s mitigation potential and thus the possibility of keeping the 2-degree trajectory on track. This article utilizes the past trend of economic structural change of five East Asian developed economies to project the energy consumption and CO₂ emissions of China in the coming decades. A special delineation of the economic sector is made, putting private consumption together with the three typical economic production sectors, to resolve the mismatch between the statistical data of energy consumption and economic production, in that residential energy consumption is typically merged into the tertiary sector, although it does not directly correspond to gross domestic product (GDP) output. Results suggest that the level of CO₂ emissions would be lower if China followed a development pathway emphasizing the development of the tertiary sector and continuously shrinking her secondary sector, making it possible for China to contribute more to global carbon mitigation. The impact from the rise of private consumption would be relatively insignificant compared to deindustrialization. In addition to continuous improvement in technology, economic structural change, which reduces carbon emission intensity, would be essential for China to be able to achieve the carbon emission level pledged in the Paris Agreement.

Key policy insights

• For China, significant economic structural reform, particularly deindustrialization, is necessary to achieve the goal of ‘peak emission by 2030’.

• Any additional contribution from China to the global effort to maintain a 2-degree trajectory would be limited – from a ‘fair-contribution’ perspective based on share of population or GDP – because the implied mitigation targets would be almost impossible to achieve.

• If developing countries follow the pathway of developed economies, particularly in developing energy-intensive industries, energy consumption and CO₂ emissions would significantly increase, reducing the possibility of keeping global temperature rise within the 2-degree Celsius benchmark.

     

Trends in CO2 emissions in Israel—an international perspective

As a Party to the United Nations Framework Convention on Climate Change, Israel conducts a periodical inventory of greenhouse gases emissions. These data allowed the generation of time series of CO₂ emissions per capita and per GDP for the period 1990–2004. It was found that CO₂ emissions per capita increased dramatically from 1990 to 2000, reflecting the rapid economic growth that was initiated by the massive immigration wave at the beginning of the nineties. These emissions remained stable between 2000 and 2004, reflecting the economic stagnation caused by the uprising in the Palestinian Territories, as well as stagnation in the global economy. CO₂ emissions per GDP (CO₂ intensity) remained stable along the whole reviewed period. This stability can be explained by a shift in electricity consumption from the industrial sector towards the commercial and the residential sectors, corresponding to an increase in the standard of living in the same period. A comparison was held with countries considered as developed for many years represented by the five largest economies (G-5) and recently developed countries (RDCs). Although Israel exhibits emission levels within the range of the G-5 countries, it does not fit the patterns demonstrated by these countries. Trends observed in Israel resemble these observed in other RDCs, such as Spain or Greece, confirming the classification of Israel in this category.     

Do recipient country characteristics affect international spillovers of CO<Subscript>2</Subscript>-efficiency via trade and foreign direct investment?

Although there is evidence that CO₂-efficiency enhancing innovations in one country diffuse into other countries to contribute to the goals of climate change mitigation, very little is known about the conditions under which such international spillovers are most likely to take place. Our contribution in the present article seeks to address this gap by examining whether the strength of cross-border CO₂-efficiency spatial dependence working through import ties and inward foreign direct investment (FDI) stocks is greater in (a) countries with lower existing levels of domestic CO₂-efficiency and (b) countries with greater social capabilities in terms of a better educated workforce and higher institutional quality. We find that less CO₂-efficient countries and countries with higher institutional quality experience stronger FDI-weighted CO₂-efficiency spillovers, whereas a higher level of human capital increases receptivity to import-weighted international spillovers.     

Russia at GHG Market

In the first Kyoto commitment period Russia could be the major supplier for the greenhouse gases (GHG) emissions market. Potential Russian supply depends on the ability of Russia to keep GHG emissions lower than the Kyoto target. In the literature there is no common understanding of the total trading potential of Russia at the international carbon market. In this paper we focus on CO₂ emission, which constituted nearly 80%of Russian GHG emission. We compare different projections of Russian CO₂emission and analyze the most important factors, which predetermine the CO₂emission growth. In a transition economy these factors are: Gross Domestic Product(GDP) dynamic, changes of GDP structure, innovation activity, transformation of export-import flows and response to the market signals. The input-output macroeconomic model with the two different input-output tables representing old and new production technologies has been applied for the analysis to simulate technological innovations and structural changes in the Russian economy during transition period. The Russian supply at the international GHG market without forest sector may be up to 3 billion metric ton of CO₂ equivalent. Earlier actions to reduce CO₂ emission are critical to insure theRussiansupply at the international carbon market. With regard to the current status of the Russian capital market, the forward trading with OECD countries is only the possibility to raise initial investments to roll no-regret and low-cost GHG reduction. This paper discusses uncertainties of RussianCO₂emission dynamics and analyzes the different incentives to lower the emission pathway.     

Changes in European greenhouse gas and air pollutant emissions 1960–2010: decomposition of determining factors

This paper analyses factors that contributed to the evolution of SO₂, NO_x and CO₂ emissions in Europe from 1960 to 2010. Historical energy balances, along with population and economic growth data, are used to quantify the impacts of major determinants of changing emission levels, including energy intensity, conversion efficiency, fuel mix, and pollution control. Time series of emission levels are compared for countries in Western and Eastern Europe, throwing light on differences in the importance of particular emission-driving forces. Three quarters of the decline in SO₂ emissions in Western Europe resulted from a combination of reduced energy intensity and improved fuel mix, while dedicated end-of-pipe abatement measures played a dominant role in the reduction of NO_x emissions. The increase in atmospheric emissions in Eastern Europe through the mid-1990s was associated with the growth of energy-intensive industries, which off-setted the positive impact of better fuel quality and changes in fuel mix. A continuous decrease in energy intensity and higher conversion efficiencies have been the main factors responsible for the moderate rate of growth of European CO₂ emissions.     

基于生产与消费视角的CO2环境库茨涅兹曲线的实证研究

基于生产和消费视角,对人均GDP和单位GDP的CO₂排放之间的内在关系进行了实证分析。对1990-2004年44个国家的人均GDP与生产型和消费型的单位GDP的CO₂排放进行面板数据的单位根检验和协整分析,在此基础上,对CO₂环境库茨涅兹曲线（EKC）进行模拟。结果显示：无论是从生产视角还是从消费视角,单位GDP的CO₂排放量都具有显著的倒"U"形状,符合环境库茨涅兹曲线特征。但对于多数发展中国家,消费型单位GDP的CO₂排放量总是低于生产型单位GDP的CO₂排放量,表明多数发展中国家在国际贸易中存在着内涵CO₂排放的净出口,这对从生产角度核算国家温室气体排放体系提出了挑战。最后,分析了CO₂环境库茨涅兹曲线对中国应对气候变化的启示。     

基于生产与消费视角的CO2环境库茨涅兹曲线的实证研究

 基于生产和消费视角,对人均GDP和单位GDP的CO₂排放之间的内在关系进行了实证分析。对1990-2004年44个国家的人均GDP与生产型和消费型的单位GDP的CO₂排放进行面板数据的单位根检验和协整分析,在此基础上,对CO₂环境库茨涅兹曲线（EKC）进行模拟。结果显示：无论是从生产视角还是从消费视角,单位GDP的CO₂排放量都具有显著的倒"U"形状,符合环境库茨涅兹曲线特征。但对于多数发展中国家,消费型单位GDP的CO₂排放量总是低于生产型单位GDP的CO₂排放量,表明多数发展中国家在国际贸易中存在着内涵CO₂排放的净出口,这对从生产角度核算国家温室气体排放体系提出了挑战。最后,分析了CO₂环境库茨涅兹曲线对中国应对气候变化的启示。     

Economics of the Kyoto Protocol for Russia

Abstract

In this article we propose a careful analysis of the economic consequences of the Kyoto Protocol for Russia, taking into account the most recently available data and the latest developments in the trends regarding Russian economic recovery. We present a review of different GHG forecasts for Russia and develop a new forecast for uncertain GDP growth and changing elasticity of GHG emission per GDP. Since the rate of growth remains uncertain, elasticity could change over time, as well as the fuel mix. We apply the Monte-Carlo method to simulate these uncertainties and to produce a reasonable interval for CO₂ emissions in 2010. The probability of Russia exceeding its Kyoto emissions budget is essentially zero. Further, we discuss the benefits for Russia from the Kyoto Protocol, and more generally from implementation of GHG mitigation policy. Ancillary benefits from Kyoto Protocol implementation will bring essential reductions in risk to human health. On the other hand, potential negative changes in the fuel mix and GDP structure, as well as a slowing of the innovation process, could exacerbate existing health problems. Alternatives to the Kyoto Protocol may bring much tougher commitments to Russia. We conclude that the Kyoto Protocol is the best possible deal for Russia. Therefore, Russia most will ratify it.     

The population structural transition effect on rising per capita CO2 emissions: evidence from China

ABSTRACT

The per capita CO₂ emissions (PCCE) of many developing countries like China have been rising faster than total CO₂ emissions, and display spatial divergence. Such temporal growth and spatial divergence will have a significant influence on efforts to mitigate CO₂ emissions. Given the research gap on the impact of the structural transition in population on PCCE, we constructed an econometric model using the dynamic panel method. The results reveal that the population structural transition has a significant nonlinear impact on PCCE, as the rate of population growth in China decelerates. Both demographic ageing and urban-rural migration have a stronger impact on PCCE than other factors. This effect, however, decreases beyond a certain threshold. An increase in the number of households due to urbanization and family downsizing has resulted in a positive effect on PCCE, without a threshold turning point. The research also finds that an increased share of the service sector in employment can reduce PCCE only if the sector employs more than 31.56% of the total employed population. Overall, these findings indicate that policymakers should pay attention to the prominence of the demographic structural transition for effective climate policy.

Key policy insights

• Policymakers should address rising per capita carbon emissions (PCCE) and their spatial divergence in future climate policies, not just total CO₂ emissions.

• The transitioning demographics of ageing and urbanization in China show a nonlinear, inverted U-shaped effect on PCCE instead of a continuously positive effect.

• Based on the nonlinear effect of employment structure on PCCE, policymakers should focus on the relationship between the structural transition of the economy and PCCE in future climate mitigation policies.

     

Global impact of a climate treaty if the Human Development Index replaces GDP as a welfare proxy

This study explores the implications of shifting the narrative of climate policy evaluation from one of costs/benefits or economic growth to a message of improving social welfare. Focusing on the costs of mitigation and the associated impacts on gross domestic product (GDP) may translate into a widespread concern that a climate agreement will be very costly. This article considers the well-known Human Development Index (HDI) as an alternative criterion for judging the welfare effects of climate policy. We estimate what the maximum possible annual average increase in HDI welfare per tons of CO₂ would be within the carbon budget associated with limiting warming to 2°C over the period 2015–2050. Emission pathways are determined by a policy that allows the HDI of poor countries and their emissions to increase under a business-as-usual development path, while countries with a high HDI value (>0.8) have to restrain their emissions to ensure that the global temperature rise does not exceed 2°C. For comparison, the well-known multi-regional RICE model is used to assess GDP growth under the same climate change policy goals.

Policy relevance

This is the first study that shifts the narrative of climate policy evaluation from one of GDP growth to a message of improving social welfare, as captured by the HDI. This could make it easier for political leaders and climate negotiators to publicly commit themselves to ambitious carbon emission reduction goals, such as limiting global warming to 2°C, as in the (non-binding) agreement made at COP 21 in Paris in 2015. We find that if impacts are framed in terms of growth in HDI per t CO₂ emission per capita instead of in GDP, the HDI of poor countries and their emissions are allowed to increase under a business-as-usual development path, whereas countries with a high HDI (>0.8) must control emissions so that global temperature rise remains within 2°C. Importantly, a climate agreement is more attractive for rich countries under the HDI than the GDP frame. This is good news, as these countries have to make the major contribution to emissions reductions.     

Transnational linkages and the spillover of environment-efficiency into developing countries

Arguments about the “positive” influence of growing transnational linkages have typically focused on their role in diffusing environmentally superior innovations which help to raise countries’ environment-efficiency. The present article empirically tests these claims by examining whether developing countries’ linkages with more CO₂- and SO₂-efficient economies contribute to domestic improvements in CO₂- and SO₂-efficiency. Our large-N, statistical findings caution against some of the efficiency-oriented optimism voiced by supporters of globalization. Although imports ties with more pollution-efficient countries are found to spillover into improved domestic CO₂- and SO₂-efficiency, neither transnational linkages via exports, inward foreign direct investment (FDI) nor telephone calls appear to have any influence on domestic pollution-efficiency.     

Economic impacts of climate change in Europe: sea-level rise

This paper uses two models to examine the direct and indirect costs of sea-level rise for Europe for a range of sea-level rise scenarios for the 2020s and 2080s: (1) the DIVA model to estimate the physical impacts of sea-level rise and the direct economic cost, including adaptation, and (2) the GTAP-EF model to assess the indirect economic implications. Without adaptation, impacts are quite significant with a large land loss and increase in the incidence of coastal flooding. By the end of the century Malta has the largest relative land loss at 12% of its total surface area, followed by Greece at 3.5% land loss. Economic losses are however larger in Poland and Germany (483 and483 and 391 million, respectively). Coastal protection is very effective in reducing these impacts and optimally undertaken leads to protection levels that are higher than 85% in the majority of European states. While the direct economic impact of sea-level rise is always negative, the final impact on countries’ economic performances estimated with the GTAP-EF model may be positive or negative. This is because factor substitution, international trade, and changes in investment patterns interact with possible positive implications. The policy insights are (1) while sea-level rise has negative and huge direct economic effects, overall effects on GDP are quite small (max −0.046% in Poland); (2) the impact of sea-level rise is not confined to the coastal zone and sea-level rise indirectly affects landlocked countries as well (Austria for instance loses −0.003% of its GDP); and (3) adaptation is crucial to keep the negative impacts of sea-level rise at an acceptable level.     

Climate change and mid-latitudes agriculture: Perspectives on consequences and policy responses

Because of population growth, economic development, and technological change, world and mid-latitudes agriculture will look very different than they do today by the time 2 × CO₂ climate change begins to have major impact. It does not appear that that impact would seriously restrain the growth of world agricultural capacity. However, significant shifts in regional comparative advantage in agriculture would be likely. Because the consequences of 2 × CO₂ climate change for agriculture would vary among countries - some suffering losses, others seeing themselves as potential winners - these consequences could impede international agreements to control climate change. However, even countries gaining agricultural advantage from climate change will need changes in policy to capture the gains. And policies to lessen the costs to the losers will be essential. If global warming continues beyond that associated with 2 × CO₂, all countries in time would be losers.     

The drivers of Chinese CO2 emissions from 1980 to 2030

China's energy consumption doubled within the first 25 years of economic reforms initiated at the end of the 1970s, and doubled again in the past 5 years. It has resulted of a threefold CO₂ emissions increase since early of 1980s. China's heavy reliance on coal will make it the largest emitter of CO₂ in the world. By combining structural decomposition and input–output analysis we seek to assess the driving forces of China's CO₂ emissions from 1980 to 2030. In our reference scenario, production-related CO₂ emissions will increase another three times by 2030. Household consumption, capital investment and growth in exports will largely drive the increase in CO₂ emissions. Efficiency gains will be partially offset the projected increases in consumption, but our scenarios show that this will not be sufficient if China's consumption patterns converge to current US levels. Relying on efficiency improvements alone will not stabilize China's future emissions. Our scenarios show that even extremely optimistic assumptions of widespread installation of carbon dioxide capture and storage will only slow the increase in CO₂ emissions.     

Climate mitigation finance across developing countries: what are the major determinants?

This empirical study assesses the relationship between the characteristics of developing countries and the amount of official climate mitigation finance inflow. A two-part model and robustness checks were used to analyse 1998–2010 Rio Marker data on 180 developing countries. The results show that developing countries with higher CO₂ intensity, larger carbon sinks, lower per capita gross domestic product (GDP) and good governance tend to be selected as recipients of climate mitigation finance, and receive more of it. CO₂ emission is not used as a determinant of mitigation finance until the actual financial disbursement. Poverty aid tends to be allocated to countries with low CO₂ emissions, possibly to avoid diverting aid from poorer developing countries. However, such a diversion is unavoidable if the share of mitigation finance in climate finance and in overall official development assistance (ODA) continues to escalate. This study calls for an equitable allocation of total ODA mitigation and adaptation finance in addition to the 0.7% ODA/gross national income target, and for transparent criteria and the verification of reporting on the allocation of mitigation finance.     

Assessment of greenhouse gases emission from civil aviation in Russia

The greenhouse gases emission (CO₂, CH₄, and N₂O) from domestic and international aviation in the Russian Federation is assessed. In 2007, the total emission of CO₂, CH₄, and N₂O amounted to 18.4 million tons of CO₂-equivalent, which is 21% below the 1990 level. Carbon dioxide dominates in the component composition of the emissions, its part in 2007 accounted for 99.1% of the emission. Taking into account the tendency towards increasing fuel consumption due to intense aircraft traffic it can be expected that compared to the present level the greenhouse gases emissions in 2012 and 2020 will increase by 15 and 45%, respectively. Accounting for the increased aircraft emissions as well as plans of foreign countries to include the international aviation into the scheme of greenhouse gases emission allowance (trade credits) it is expedient to make more precise the greenhouse gases emissions from the Russian aviation based on the detailed flight data for all types of the aircraft.     

Cost and Co<Subscript>2</Subscript>-Emission Reduction of Biomass Cascading: Methodological Aspects and Case Study of SRF Poplar

This study presents and applies a coherent methodological framework to compare biomass cascading chains, i.e. the subsequent use of biomass for materials, recycling and energy recovery, considering land use, CO₂ emission reduction and economic performance. Example cascading chains of short rotation poplar wood are compared with each other on the basis of literature data. Results for these chains vary strongly, namely, from CO₂ mitigation benefits of 200 /Mg CO₂ to CO₂ mitigation costs of 2200 /Mg CO₂, and from net CO₂ emission reductions per hectare of biomass production of 28 Mg CO₂/(ha yr) to net CO₂ emissions of 8 Mg CO₂/(ha yr). Using a present-value approach to determine CO₂ emissions and costs affects the performance of long-term cascading chains significantly, i.e. cost and CO₂ emission reduction are decreased. In general, cascading has the potential to improve both CO₂ emission reduction per hectare and CO₂ mitigation costs of biomass usage. However, this strongly depends on the biomass applications combined in the cascading chain. Parameters that significantly influence the results are market prices and gross energy requirements of substituted materials and energy carriers, and the efficiency of biomass production. The method presented in this study is suitable to quantify land use, CO₂ emission reduction and economic performance of biomass cascading systems, and highlights the possible impact of time on the attractiveness of specific cascading chains.     

Carbon dioxide sequestration: how much and when?

Carbon dioxide (CO₂) sequestration has been proposed as a key component in technological portfolios for managing anthropogenic climate change, since it may provide a faster and cheaper route to significant reductions in atmospheric CO₂ concentrations than abating CO₂ production. However, CO₂ sequestration is not a perfect substitute for CO₂ abatement because CO₂ may leak back into the atmosphere (thus imposing future climate change impacts) and because CO₂ sequestration requires energy (thus producing more CO₂ and depleting fossil fuel resources earlier). Here we use analytical and numerical models to assess the economic efficiency of CO₂ sequestration and analyze the optimal timing and extent of CO₂ sequestration. The economic efficiency factor of CO₂ sequestration can be expressed as the ratio of the marginal net benefits of sequestering CO₂ and avoiding CO₂ emissions. We derive an analytical solution for this efficiency factor for a simplified case in which we account for CO₂ leakage, discounting, the additional fossil fuel requirement of CO₂ sequestration, and the growth rate of carbon taxes. In this analytical model, the economic efficiency of CO₂ sequestration decreases as the CO₂ tax growth rate, leakage rates and energy requirements for CO₂ sequestration increase. Increasing discount rates increases the economic efficiency factor. In this simple model, short-term sequestration methods, such as afforestation, can even have negative economic efficiencies. We use a more realistic integrated-assessment model to additionally account for potentially important effects such as learning-by-doing and socio-economic inertia on optimal strategies. We measure the economic efficiency of CO₂ sequestration by the ratio of the marginal costs of CO₂ sequestration and CO₂ abatement along optimal trajectories. We show that the positive impacts of investments in CO₂ sequestration through the reduction of future marginal CO₂ sequestration costs and the alleviation of future inertia constraints can initially exceed the marginal sequestration costs. As a result, the economic efficiencies of CO₂ sequestration can exceed 100% and an optimal strategy will subsidize CO₂ sequestration that is initially more expensive than CO₂ abatement. The potential economic value of a feasible and acceptable CO₂ sequestration technology is equivalent – in the adopted utilitarian model – to a one-time investment of several percent of present gross world product. It is optimal in the chosen economic framework to sequester substantial CO₂ quantities into reservoirs with small or zero leakage, given published estimates of marginal costs and climate change impacts. The optimal CO₂ trajectories in the case of sequestration from air can approach the pre-industrial level, constituting geoengineering. Our analysis is silent on important questions (e.g., the effects of model and parametric uncertainty, the potential learning about these uncertainties, or ethical dimension of such geoengineering strategies), which need to be addressed before our findings can be translated into policy-relevant recommendations.     

Optimal production resource reallocation for CO2 emissions reduction in manufacturing sectors

To mitigate the effects of climate change, countries worldwide are advancing technologies to reduce greenhouse gas emissions. This paper proposes and measures optimal production resource reallocation using data envelopment analysis. This research attempts to clarify the effect of optimal production resource reallocation on CO₂ emissions reduction, focusing on regional and industrial characteristics. We use finance, energy, and CO₂ emissions data from 13 industrial sectors in 39 countries from 1995 to 2009. The resulting emissions reduction potential is 2.54 Gt-CO₂ in the year 2009, with former communist countries having the largest potential to reduce CO₂ emissions in the manufacturing sectors. In particular, basic material industry including chemical and steel sectors has a lot of potential to reduce CO₂ emissions.     

Vehicle tax policies and new passenger car CO2 performance in EU member states

This article explores the causes for differences in the average CO₂ emissions intensity of the new passenger car (NPC) fleet in member states (MS) across Europe. Although EU policies mitigating CO₂ emissions from NPCs have been in place since 1999, MS strongly diverge in the absolute amount and relative change in emissions over the last decade. The authors employ a qualitative approach to analyse the factors, in particular national vehicle taxes, contributing to this divergence and the relative contribution of national and European policies in reducing national CO₂ emissions from NPCs. The analysis shows that there has been a significant reduction in CO₂ emissions intensity of NPCs since 2007 across most MS, compared with the six years previous to that date. This would indicate that EU-wide policies, such as the CO₂ vehicles regulation, along with the economic recession in 2008, have influenced national NPC CO₂ emissions. Generally, countries with CO₂-differentiated vehicle taxes are observed as more likely to have achieved greater reductions in CO₂ emissions. However, over the same period there have been many confounding factors, such as economic instability in the EU, that also influence NPC emissions. Using more detailed case study analyses of six countries, the authors find that there is scope for well-designed national vehicle tax policies to drive NPC emissions down further than the EU average. In countries with the highest success rate, such as the Netherlands, the design of the vehicle tax, as part of a well-aligned policy package, has been very important in delivering the biggest reductions in CO₂ emissions from NPCs.

POLICY RELEVANCE

The transport sector continues to be an intractable source of CO₂ emissions. Governments around the world are seeking effective policies to deal with the increase in passenger car CO₂ emissions appropriate to their own circumstances. This article examines the experience of EU MS with CO₂-differentiated vehicle taxes in reducing CO₂ emissions in the context of other national and international contributing factors. It should therefore both be useful to policy makers and contribute to climate policy research in general.