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The impacts of policy mix for resolving overcapacity in heavy chemical industry and operating national carbon emission trading market in China

Wei Li, Can Lu, Yi Ding and Yan-Wu Zhang

Applied Energy, 2017, vol. 204, issue C, 509-524

Abstract: In place to reduce greenhouse gas emission efficiently and accomplish carbon emission peak destination ahead of 2030, a variety of policy-based interventions grounded in optimizing energy structure and boosting emission mitigation have been put forward to target carbon-and resource-intensive enterprises across China. Both defusing overcapacity in heavy chemical industry and constructing national carbon trading market are recently attached with a stronger significant importance. A STIRPAT (Stochastic Impacts by Regression on Population, Affluence, and Technology) embed dynamic CGE (computable general equilibrium) model is applied in this study to evaluate the simulation effects focusing on China’s economy, energy, and household lifestyle. We devise nine scenarios in terms of the two aforementioned mitigation strategies. The results indicate that, the optimal policy mix, balancing economic improvement, energy mix readjustment, and emission reduction to the maximize value, is founded to be declining the proportion of heavy chemical industry capacity with an annual average level of 3%, 1%, 1%, stipulating carbon price in 5.8 dollar/ton, 11.6 dollar/ton, 14.5 dollar/ton, and distributing annual carbon allowance as 3.5 billion ton, 7 billion ton, 9 billion ton during 2017–2020, 2021–2025, and 2026–2030 respectively.

Keywords: Overcapacity; Carbon price; Carbon allowance; Computable general equilibrium; China (search for similar items in EconPapers)
Date: 2017
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