The static and dynamic heterogeneity and determinants of marginal abatement cost of CO 2 emissions in Chinese cities

Jianxin Wu, Chunbo Ma, Kai Tang

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

Using a newly constructed panel dataset of 286 Chinese cities for 2002–2013, we examine the static and dynamic distribution and determinants of marginal abatement cost (MAC) of CO 2 . We find that: 1) there has been a steady increase of the estimated mean MAC for CO 2 emissions over the studied period; 2) there is substantial heterogeneity in the estimated MAC across regions with eastern cities having the highest MAC and northeastern cities having the lowest; 3) the distribution dynamics analysis shows that there is no clear tendency of convergence in the steady state distribution of MAC in the long term. The findings provide strong support for a market-based policy instrument for CO 2 mitigation in China. Our regression model also reveals a U-shaped relationship between MAC and CO 2 emission intensity with most cities located to the left-hand side of the turning point by 2013. This also provides significant implications on the cost burden of complying with various intensity-based mitigation targets under China's current regulatory regime.

Original languageEnglish
Pages (from-to)685-694
Number of pages10
JournalEnergy
Volume178
DOIs
Publication statusPublished - 1 Jul 2019

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