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Scenario of China Reaching Carbon Peaking ahead of Schedule and Its Effect on Macro Economy

Author

Listed:
  • LU Chuanyi

    (Institute of Nuclear and New Energy Technology, Tsinghua University, Beijing 100084, China)

  • CHEN Wenying

    (Institute of Economics, Energy and Environment, Tsinghua University, Beijing 100084, China)

Abstract

At the 75th session of the United Nations General Assembly (UNGA) in 2020, China put forward the goal of peaking carbon dioxide emissions by 2030 and achieving carbon neutrality by 2060, a move to lead global response to climate change that has attracted wide attention and hot comments at home and abroad. Therefore, it is of great practical significance and academic value to explore ways of achieving carbon peaking ahead of schedule and study the macroeconomic effect. This paper, based on Energy, Environment and Economy recursive dynamic computable general equilibrium model (TECGE), a dynamic computable general equilibrium model, carries out a quantitative analysis of the effect of strengthening carbon peaking commitment on China's future macro economy. By setting up four scenarios, namely carbon peaking of 10.8 billion tons, 10.7 billion tons, 10.58 billion tons and 10.36 billion tons in 2030, 2027, 2025, and 2023, it examines the effects of carbon peaking ahead of schedule and carbon peaking in 2030 on macro economy. The findings show that, compared with the 2030 benchmark, the more ahead of schedule carbon peaking is achieved, the higher the carbon tax prices, and that though GDP and other macroeconomic variables, such as aggregate consumption, aggregate imports and exports decline, the share of the tertiary industry increases. That is, the more ahead of schedule carbon peaking is achieved, the more macroeconomic variables decline, and the more the share of the tertiary industry rises. This paper, using computable general equilibrium (CGE) model to conduct a quantitative analysis of the macroeconomic effect, makes policy recommendations for carbon peaking ahead of schedule and high-quality economic development.

Suggested Citation

  • LU Chuanyi & CHEN Wenying, 2022. "Scenario of China Reaching Carbon Peaking ahead of Schedule and Its Effect on Macro Economy," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 17(2), pages 212244-2122, June.
    • Handle: RePEc:fec:journl:v:17:y:2022:i:2:p:212-244
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    File URL: https://journal.hep.com.cn/fec/EN/10.3868/s060-015-022-0009-7
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    References listed on IDEAS

    as
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