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Permit sellers, permit buyers: China and Canada's roles in a global low-carbon society

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  • CHRIS BATAILLE
  • JIANJUN TU
  • MARK JACCARD

Abstract

The challenge of creating a global low-carbon society is examined from the perspectives of a slow-growing but highly developed economy (Canada) and a fast-growing developing economy (China). Both countries' responses are compared to a similar carbon price schedule (US$10/tCO 2 e in 2013 rising exponentially to $100 by 2050) using a hybrid technologically explicit and behaviourally realistic model with macroeconomic feedbacks (CIMS). Then additional measures are imposed based on the national circumstances of each country; for Canada we simulate a 50% reduction by 2050, and stabilization for China. The scale of the challenge in all cases requires that every available option be vigorously pursued, including energy efficiency, fuel switching, carbon capture and storage, and accelerated development of renewables; to compensate, there are significant co-reductions of local air pollutants such as SO x and NO x . Finally, the abatement cost schedules of China and Canada are compared, and implications considered for carbon permit flows if the cost schedule of the rest of the developed world is assumed to be similar to that of Canada. We found that the developed world and China could collectively reduce emissions by 50% in 2050 at a price of $175/tCO 2 e, with permits flowing from the developed countries to China; while abatement costs are lower in China up to $75/t, at higher prices reductions are less costly in the developed world. Our results indicate that a global low-carbon society is feasible, on condition that policy makers are willing and able to impose long-term, credible policy packages with carbon pricing policy as the core element, coupled with supplementary regulations to address market failures.

Suggested Citation

  • Chris Bataille & Jianjun Tu & Mark Jaccard, 2008. "Permit sellers, permit buyers: China and Canada's roles in a global low-carbon society," Climate Policy, Taylor & Francis Journals, vol. 8(sup1), pages 93-107, December.
  • Handle: RePEc:taf:tcpoxx:v:8:y:2008:i:sup1:p:s93-s107
    DOI: 10.3763/cpol.2007.0494
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    References listed on IDEAS

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    1. Robert Stavins & Judson Jaffe & Todd Schatzki, 2007. "Too Good to Be True? An Examination of Three Economic Assessments of California Climate Change Policy," NBER Working Papers 13587, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Taewook Huh, 2020. "Comparative and Relational Trajectory of Economic Growth and Greenhouse Gas Emission: Coupled or Decoupled?," Energies, MDPI, vol. 13(10), pages 1-13, May.
    2. Mao Xianqiang & Yang Shuqian & Liu Qin, 2013. "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," EEPSEA Research Report rr2013036, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2013.
    3. Steve Pye & Christophe McGlade & Chris Bataille & Gabrial Anandarajah & Amandine Denis-Ryan & Vladimir Potashnikov, 2016. "Exploring national decarbonization pathways and global energy trade flows: a multi-scale analysis," Climate Policy, Taylor & Francis Journals, vol. 16(sup1), pages 92-109, June.

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