Economic implications of carbon neutrality in China: A dynamic general equilibrium analysis

Shenghao Feng, Xiujian Peng, Philip Adams, Dalin Jiang and Robert Waschik

Economic Modelling, 2024, vol. 135, issue C

Abstract: We utilize a dynamic computable general equilibrium model to analyze the economic implications of carbon neutrality for China. Novel treatments of power generation and carbon capture and storage (CCS) possibilities are a feature of the analysis. We calculate the impact of carbon neutrality by comparing a business-as-usual base-case scenario with results from an alternative carbon neutrality scenario. We discuss the assumptions used in these scenarios and shocks relating to energy efficiency, energy preferences, and the implementation of CCS. Our simulation results show that macroeconomic (especially employment) setbacks are minor, suggesting that China should be able to achieve the joint policy goals of both net carbon neutrality by 2060 and doubling real gross domestic product by 2035. We also test the sensitivity of our core results to changes in key underlying assumptions.

Keywords: Carbon neutrality; China; Computable general equilibrium; Carbon capture and storage; Power generation nesting; Carbon price (search for similar items in EconPapers)
JEL-codes: C68 E17 Q43 Q47 Q48 Q54 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:135:y:2024:i:c:s026499932400083x

DOI: 10.1016/j.econmod.2024.106727

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