China’s provincial energy consumption, emissions
and mitigation costs towards 2030
Hancheng DAI, Toshihiko MASUINational Institute for Environmental Studies (NIES), Japan
19th AIM International Workshop – Tsukuba, Japan, December 13-14, 2013

IntroductionMethods• Most existing integrated assessment models consider China asa homogenous region; however, in reality, China has hugeregional diversity in terms of per capita GDP and emissions,industry and energy structure , energy and carbon intensity etc.
• This study develops a multi-region CGE model which is used toassess low-carbon policies at more detailed provincial level.

Features of a new multi-region CGE model for China• General equilibrium model representing 22 economic sectors,
30 regions of China and several world regions.
• Provides the trajectory of economic development, energy
demand and supply structure, carbon emissions, carbon prices.
• Assessing the economic impacts of climate policy.

• BaU scenario has no carbon constraint and assumes future GDP
growth rate, energy efficiency improvement (EEI), total factor
productivity (TFP).
• CM scenario assumes carbon intensity target for each province.
Table 1 Scenario settings

BaUCMGDP grows at 6-8% per year from 2002-2030; no Carbon intensity reduces by 40% in 2020 and 60% incarbon cap; EEI: 3% for solid, liquid and electricity, 2030 against 2005 level.
-2% for gas fuel; TFP: 3-5% .

Technology• Renewable energy• Energy efficiency• CCS
Resource• Energy & Land & Water
Low-carbon policy• Emission trading• Carbon/Energy Cap/intensity• Carbon tax• Renewable• LifestyleEconomy• GDP• Industry structure• Household income• Carbon price &economic impacts

General equilibrium model• 30 provinces of China• Several world regions• Dynamic: 2002-2050• 22 Sectors• GHGsEnergy• Energy security• Energy mix• Renewable energy
Environment• GHGs• Air pollutants

Key policies

Low-carbon economy

Economic driving forces

Scenarios

Population• Labor & Investment

Mitigation
potential
Economic
impacts
Co-benefits
Low-carbon
roadmap

Figure 1 A multi-region CGE model for China.

Projection

Fossil Energy
CO2

25%
20%

SW

15%
10%
5%
S0%
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Mitigation costs among provinces (Figure 3b&c)• Different carbon prices. Provinces whose carbon intensity reduces
less in BaU scenario will face higher mitigation costs.
• Different impacts on GDP. Most provinces suffer GDP loss due tocarbon reduction, but some provinces gain due to less import ofenergy intensive products.

NWN

Carbon intensity reduction in 2030 (Figure 3a)• Intensity reduction is related to economic structure and energy
structure.
• Some regions reduce less: Xinjiang, Shanxi, Heilongjiang, as they
provides coal and oil to feed China’s demand.
• Some regions reduce more: Beijing, Jilin, Chongqing, Hunan, Gansu.

ECFigure 2 China’s share to the world: 1978-2030.

60% target in 2030

30%

History

NW

35%

Share (%)

China’s share to world:
2010->2030• GDP: 7%->14%;• Fossil energy: 24%->37%;• CO2 emissions: 20%->32%.

40%

OResultsWorld-29%
China-41%
ROW-37%
Xinjiang-19%
Ningxia-44%
Qinghai
-25%
Gansu
-51%
Shaanxi-38%
Yunnan-37%
Guizhou-25%
Sichuan-39%
Chongqing -61%
Hainan-27%
Guangxi-39%
Guangdong-31%
Hunan
-53%
Hubei
-48%
Henan
-45%
Shandong-36%
Jiangxi-46%
Fujian
-30%
Anhui
-42%
Zhejiang-38%
Jiangsu-37%
Shanghai-35%
Heilongjiang-14%
Jilin -65%
Liaoning-42%
InnerMong-36%
Shanxi
-23%
Hebei
-47%
Tianjin-30%
Beijing -62%-80% -60% -40% -20% 0%Carbon intensity reduction in 2030

aChinaXinjiang
Ningxia
Qinghai
Gansu
Shaanxi
YunnanGuizhou
SichuanChongqing
HainanGuangxi
Guangdong
Hunan
Hubei
Henan
Shandong
Jiangxi
FujianAnhui
Zhejiang
JiangsuShanghaiHeilongjiang
JilinLiaoning
InnerMong
Shanxi
Hebei
TianjinBeijing

60
106
1769
2666
4360
99
22102
76116
4750
6071
64
126
37100
9575
138
1758
38
46
3477
32050
100150Carbon price USD/ton-CO2b

China
-3.1%
Xinjiang-4.8%
Ningxia-2.8%
Qinghai
-5.3%
Gansu
-0.6%
Shaanxi-3.0%
Yunnan-2.8%
Guizhou
Sichuan-2.1%
Chongqing-0.3%
Hainan -8.9%
Guangxi-1.9%
Guangdong
-6.5%
Hunan
-0.5%
Hubei
-2.2%
Henan
Shandong-2.8%
Jiangxi-2.3%
Fujian
-2.7%
Anhui
-1.3%
Zhejiang-4.4%
Jiangsu-4.3%
Shanghai-6.2%
Heilongjiang
-5.3%
Jilin
Liaoning-2.8%
InnerMong
ShanxiHebei-1.1%
Tianjin-4.1%-1.0%
Beijing-12.0%

-7.0%

1.0%

0.1%

0.3%
0.5%
1.4%

-2.0%
3.0%
GDP loss (%)

c

Figure 3 Carbon intensity reduction in BaU scenario (2030 vs 2005) (a); carbon price (b)and GDP loss (c) in CM scenario. [N: North; NW: Northwest; E: East; C: Central; S:South; SW: Southwest; NW: Northwest; O: Other]Summary & Conclusion• This study assessed future trajectory of China’s provincial energy consumption, carbon emissions, carbon intensity and mitigation costs by using a
newly developed multi-region CGE model.
• Outcomes indicate that as China’s economy increases, its energy consumption and carbon emissions will continue to take a larger share in the world,
implying that China is increasingly important in determining whether global 2 degree target could be achieved or not.
• Diverse trends of carbon intensity and carbon mitigation costs are observed across China’s provinces. This study offers insights for regional climate
policy making. Such regional diversity needs to be taken into account, when the central government sets carbon intensity targets provinces, othermarket based policy instruments such as inter-provincial emission trade should be introduced.
Acknowledgment: This study was supported by the Environment Research and Technology Development Fund (A-1103) of the Ministry of the Environment, Government of Japan.