Yinying PhD Conference 2012

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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

Transcript of Yinying PhD Conference 2012

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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�

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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. �

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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  

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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�

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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? �

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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  

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Baseline  Projec?on-­‐-­‐China�

Real  GDP  projec?ons� CO2  emissions  projec?ons �

CO2  emissions  intensity  projec?ons �

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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 �

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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!�

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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.�

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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. �

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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. �

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Thank you for your attention!�

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Policy  simula?on  algorithm  

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