Template-Type: ReDIF-Article 1.0
Author-Name:  Hongbo Duan, Lei Zhu, Gürkan Kumbaroglu, and Ying Fan
Title:  Regional Opportunities for China To Go Low-Carbon: Results from the REEC Model
Classification-JEL: F0
Volume:  Volume 37
Issue:  China Special Issue
Year:  2016
Abstract:  The intention of this paper is to (i) introduce a multi-regional dynamic emissions trading model and (ii) examine the potential impact of an emissions trading scheme (ETS) on the long-term evolution of energy technologies from national and regional perspectives in China. The establishment of this model is a salutary attempt to Sinicize the global integrated assessment model that combines economy, energy, and environment systems. The simulation results indicate that: (1) for majority of regions, ETS is more effective in cutting CO2 emissions than a harmonized carbon tax (HCT), but this might not be true for the entire country, which means that these two options have little difference in overall carbon reduction; (2) carbon tax policy is a more cost-effective option in curbing CO2 with respect to ETS in the long run; (3) neither ETS nor pure carbon tax provide enough incentives for the breakthrough of carbon-free energy technologies, which illustrates that matching with some other support policies, such as subsidies and R&D investment, is essential to extend the niche market; and (4) In the context of ETS, the diffusion of non-fossil technologies in regions that act as sellers performs much better than this diffusion in the buyer regions. 
Handle: RePEc:aen:journl:ej37-si1-Lei
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