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China’s commitment to the UNFCCC to peak its emissions by 2030, or sooner, signaled a long anticipated shift in China’s model of development with far reaching consequences. Cities in China, and particularly the residential sector in cities, will be charged with making significant reductions in emissions growth even as rates of urbanization continue to climb. Focusing on Beijing and Shanghai, this paper carries out a measures-based economic analysis of low carbon investment opportunities in the residential sector. Results find significant opportunity: between 2015 and 2030, BAU levels of CO 2 emissions could be reduced by 10.2% in Beijing and 6.8% in Shanghai with the adoption of economically attractive low carbon measures. While these headline results underline the case for low carbon investment in the residential sectors of these megacities in China, a closer analysis provides insights for understanding the economics of decarbonisation in cities more generally. [ABSTRACT FROM AUTHOR]

• Baseline scenarios are essential and important in forward-looking studies. • Carbon tax policy impacts are found to be highly diverse across baseline scenarios. • Output levels can change dramatically (e.g. −19% to −64% for power output in India). • Real GDP can also change significantly (e.g. −0.66% to 1.54% in China). • Baselines with honed renewable projections facilitates fewer economic trade-offs. As a result of statistical contingencies, research frequently employs aged databases to examine the impacts of energy and climate change policies in contemporary situations, or in forward timeframes out to 2050 or even 2100. These forward-looking studies require a base case scenario in order to assess the impacts of a policy. In this article, we hypothesise how a baseline is 'rolled forward', and specifically, how this process can materially alter the apparent performance of an energy or climate change policy. In the literature, we find a variety of methods are used to update databases and project forward base case scenarios, some which scale an entire economy to a general trend of growth, whereas others account for sectoral differences. We extend a global electricity-detailed model (GTAP-E-Power) to examine our hypothesis. We evaluate impacts of a world-wide carbon tax policy ($50/t of carbon dioxide equivalent) using three different baselines, with varying levels of specificity relating to macroeconomic projections and sectoral developments and constraints. Results show the impact on sectors and the overall economy in all countries are highly diverse when different baselines are used. For example, fossil-based power output in the United States declines between 36.7 and 65.5% while Real GDP in China declines between −0.66 and −1.54% for an identical policy, depending on which baseline methodology is used. Above all, we find that stronger development of renewable energy and technology in the baselines results in lower costs of a climate change mitigation policy. [ABSTRACT FROM AUTHOR]

• A multi-GCM ensemble simulation and optimization approach is developed. • The developed approach can effectively tackle multiple uncertainties. • The impact of climate change on energy-economy-carbon nexus system is investigated. • Renewable energy will gradually replace fossil fuel for mitigating climate change. • There is a tradeoff between carbon dioxide emission and system cost. Climate change mitigation by reducing carbon dioxide emission becomes one of the major challenges for energy systems. In this study, a multi-GCM ensemble simulation and optimization approach is developed for analyzing the impact of climate change on China's energy-economy-carbon nexus system under multiple uncertainties through integrating techniques of multiple global climate models, support-vector-regression, Monte Carlo simulation, and interval chance-constrained programming within a general framework. The developed approach can tackle multiple uncertainties existed in global climate models, random carbon dioxide emission and complex optimization process. Results disclose that (i) the national electricity demand would grow around 58.6% in the next 30 years under climate change; (ii) for climate change mitigation and sustainable development, fossil fuel would be gradually replaced by renewable energy (i.e. the share of fossil fuel to the total energy supply decreasing 22.5% and the share of electricity generated from renewable energy increasing 27.0% by 2050); (iii) compared to the peak value in 2030, carbon dioxide emission would reduce 15.1% by 2050, most reduction from coal-fired power generation; (iv) there is a tradeoff between carbon dioxide emission and system cost as p-level decreases from 0.15 to 0.01 (i.e. carbon dioxide emission can reduce 1.9% with 3.7% of raised system cost). It is desired for China to adjust its current energy supply structure for reducing carbon emission and seeking a low-carbon developmental path. The most effective way is to eliminate some small coal-fired units. A number of wind-power and solar-power projects are expected to be implemented due to their abundant potential markets. [ABSTRACT FROM AUTHOR]