Estimating the marginal abatement cost curve of CO₂ emissions in China: Provincial panel data analysis

Limin Du, Aoife Hanley and Chu Wei

No 1985, Kiel Working Papers from Kiel Institute for the World Economy

Abstract: This paper estimates the Marginal Abatement Cost Curve (MACC) of CO2 emissions in China based on a provincial panel for the period of 2001-2010. The provincial marginal abatement cost (MAC) of CO2 emissions is estimated using a parameterized directional output distance function. Four types of model specifications are applied to fit the MAC-carbon intensity pairs. The optimal specification controlling for various covariates is identified econometrically. A scenario simulation of China's 40-45 percent carbon intensity reduction based on our MACC is illustrated. Our simulation results show that China would incur a 559-623 Yuan/ton (roughly 51-57 percent) increase in marginal abatement cost to achieve a corresponding 40-45 percent reduction in carbon intensity compared to its 2005 level.

Keywords: CO2 Emissions; Marginal Abatement Cost Curve; Model Selection; China (search for similar items in EconPapers)
JEL-codes: Q52 Q54 Q58 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cmp, nep-cna, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1985

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