Marginal Abatement Costs of Carbon Dioxide Emissions in China: A Parametric Analysis

Limin Du (), Aoife Hanley and Chu Wei ()

Environmental & Resource Economics, 2015, vol. 61, issue 2, 191-216

Abstract: This paper investigates the technical inefficiency, shadow price and substitution elasticity of $$\hbox {CO}_{2}$$ CO 2 emissions of China based on a provincial panel for 2001–2010. Using linear programming to calculate a quadratic parameterized directional output distance function, we show that China’s technical inefficiency increases over the period implying further scope for $$\hbox {CO}_{2}$$ CO 2 emissions reduction in the medium and longer term at best by 4.5 and 4.9 % respectively. Our results (notwithstanding regional differences) highlight increases in the shadow price of $$\hbox {CO}_{2}$$ CO 2 abatement (1,000 Yuan/ton in 2001 to 2,100 Yuan/ton in 2010). Additionally, increasingly steep substitution elasticity highlights the difficult reality of reducing China’s $$\hbox {CO}_{2}$$ CO 2 emissions. Copyright Springer Science+Business Media Dordrecht 2015

Keywords: $$\hbox {CO}_{2}$$ CO 2 emissions; Shadow price; Parametric estimation; China (search for similar items in EconPapers)
Date: 2015
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