The Way to CO2 Emission Reduction and the Co-benefits of Local Air Pollution Control in China's Transportation Sector: A Policy and Economic Analysis

Mao Xianqiang (), Yang Shuqian and Liu Qin
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Mao Xianqiang: Institute of Environmental Sciences, Beijing Normal University
Yang Shuqian: Institute of Environmental Sciences, Beijing Normal University
Liu Qin: Institute of Environmental Sciences, Beijing Normal University

No rr2013036, EEPSEA Research Report from Economy and Environment Program for Southeast Asia (EEPSEA)

Abstract: The transportation sector in China has joined the power generation and the steel and iron industries as a major CO2emission contributor. To determine which policy instrument(s) would be effective in reducing CO2emissions, various policy instruments which have been or are likely to be implemented in the near future in China are examined and compared in this study. These instruments include carbon tax, energy tax, fuel tax, clean energy vehicle subsidy, and a reduction on ticket prices. The CIMS model system is employed as the simulation vehicle to predict the emission dynamics of CO2and local air pollutants under business-as-usual and policy scenarios for the transportation sector of China from 2008 to 2050. The 2020 CO2 reduction target is also set according to the national carbon intensity reduction pledge of China. The policy instruments proposed in this research study can all help mitigate the CO2emission intensity of the Chinese transportation industry to different extents and bring about the co- benefits of local air pollutant reduction. Among these policy instruments,energy and fuel taxes, with the tax rates set, are the two most promising instruments for CO2emission intensity reduction to reach the 2020 carbon intensity reduction targets while subsidies are the least promising options. CO2tax could be an effective policy tool, but with the low tax rate considered in China, there is no way that the transportation sector would significantly contribute to achieving a desirable carbon intensity reduction. The CIMS model is applied to simulate and determine how CO2, energy, and fuel taxation can stimulate technology competition and substitution in the transportation sector of China and to ascertain how these taxes will influence energy consumption and pollutant emissions reduction.

Keywords: pollution; CO2 emission; China (search for similar items in EconPapers)
Date: 2013-03, Revised 2013-03
New Economics Papers: this item is included in nep-ene, nep-env, nep-tra and nep-tre
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