The economic impact of a deep decarbonisation pathway for China: a hybrid model analysis through bottom-up and top-down linking

Xin Su , Frédéric Ghersi (1) , Fei Teng , Gaëlle Le Treut (1) , Meicong Liang

1 CIRED - Centre International de Recherche sur l'Environnement et le Développement

The development of mid-century low-emission development strategies is critical to guiding national actions on long-term mitigation. One of the key concerns in developing mitigation strategies is the cost of low-carbon transition. In this study, we estimate the macroeconomic cost of a deep decarbonisation pathway for China, by integrating an energy-systems optimization model with an economic model through hard linking. Our results indicate that deep decarbonisation increases the energy expenses of Chinese households in the mid-run due to the higher cost of electricity. However, firms will benefit from moderate decarbonization through a reduction in coal and oil consumption. Energy-efficiency improvements lead to a reduction in firms' total energy costs, partially compensating the crowdingout effect of low-carbon investments on general productive capital. Our mitigation scenario has therefore a small macroeconomic cost compared to business as usual, equal to a lag in growth of less than one year in 2050.

Mots clés: Hybrid energy-economy model; China; deep decarbonisation pathways; mitigation

Domaines: Environnement et Société

Xin Su, Frédéric Ghersi, Fei Teng, Gaëlle Le Treut, Meicong Liang. The economic impact of a deep decarbonisation pathway for China: a hybrid model analysis through bottom-up and top-down linking. 2021. ⟨hal-03487333⟩