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Highlights • The impact of the ETS on social equity is assessed. • A dynamic CGE model with disaggregated labor and household sectors is developed. • Employment in China's coal industry will decline by 75% in 2030 in the ETS scenario. • ETS revenue will peak at 2278 billion yuan in 2042 in our scenario. • ETS revenue redistribution can reduce the Gini coefficient by 10% compared to BAU. Abstract Carbon dioxide emissions trading systems (ETS) are an important market-based mitigation strategy and have been applied in many regions. This study evaluates the potential for a national ETS in China. Using a dynamic computable general equilibrium (CGE) model with detailed representations of economic activity, emissions, and income distribution, we examine alternative mitigation policies from now until 2050. Based on statistical and survey data, we disaggregate the labor and household sectors and simulate the impacts of ETS policies on the incomes of different household groups. We find that ETS has the potential to reconcile China's goals for sustained, inclusive, and low-carbon economic growth. Results show some key findings. First, the number of unemployed people in energy-intensive industries such as coal and construction will continue to increase; by 2050, employment in the coal industry will decline by 75%. Second, if the scope of the carbon market extends to all industries in China, carbon market revenues will continue to increase, reaching a maximum of 2278 billion yuan ($336 billion) in 2042 to become the world's largest carbon market. Third, the distribution of benefits from the national ETS can help achieve greater social equity. By comparing different distribution policies, we find that the combination of targeted subsidies for unemployed coal workers and direct household subsidies based on proportional per capita will reduce the social income gap to the greatest extent compared with other scenarios. By 2050, this distribution policy will reduce the Gini coefficient in China by 10% compared to the Business as Usual (BAU) scenario. [ABSTRACT FROM AUTHOR]

As China reaffirms its commitments to limit the climate change risk and improve air quality, a combination of new policy and technology opportunities is presenting itself. A national emission trading scheme (ETS) begun in 2017 and is showing great promise, creating decentralized incentives for cost effective pollution mitigation. At the same time, sustained energy sector innovation is driving the costs of renewable electric power generation below those of fossil fuel substitutes. Early economic evidence of ETS measured pollution reductions, but has not addressed important economy-wide net benefits. This paper focuses on technology and energy cost savings and is the first to account for three multiplier effects—shifting consumption patterns, job growth, and the benefits of induced productivity growth—that would result from accelerated renewable electricity deployment in China. Results from a dynamic recursive computable general equilibrium model for 2017 to 2030 show that expanding renewable deployment can interact with the ETS to slash GHG emissions, as well as energy costs, stimulating significant long-term economic growth. These results suggest that China should accelerate its clean energy transition, not only for the air-quality and climate benefits, but to fulfill the energy sector's potential to promote innovation, employment, and economic growth. [ABSTRACT FROM AUTHOR]

To achieve nationally determined contribution (NDC) targets, China has developed a series of low carbon development plans. Among them, the clean energy transformation is very crucial. This study evaluates the impact of a set of policies including the development of renewable energy, upgrading heavy industry, and energy efficiency improvement on China's income gap between 2012 and 2050. A dynamic computable general equilibrium (CGE) model with detailed representations of economic activity, an upgraded labor market and disaggregated labor types based on statistical and survey data is used. Our research provides support for the necessity of low-carbon policies to achieve NDC targets. Results show some key findings. First, low-carbon policies have the greatest impact on employment across all energy industries, with negative impacts in most traditional energy sectors and positive impacts in most renewable power sectors. Second, labor will continue to migrate from rural to urban areas with the transformation of the economic structure and the urbanization rate will further increase, reaching a maximum of around 70%. The reduction of the rural population will bring new opportunities for the modernization of agriculture, increasing the income of rural residents and realizing the equitable development between urban and rural areas. Third, the income gap among urban residents will widen due to the different level of labor demand for employees with different education levels. • The impact of low carbon policies on employment and income is assessed. • A dynamic CGE model with disaggregated labor types is developed. • Policies have the positive employment impact in the renewable energy industries. • The income gap will decline between urban and rural residents. • The income gap will widen among urban residents. [ABSTRACT FROM AUTHOR]

Highlights • We analyze interaction between China's national ETS and economic transition. • Economic transition alone will reduce emissions by 16% below baseline by 2050. • Economic transition lowers the cost of mitigation for firms under an ETS. • Increased consumption in less emissions-intensive sectors boosts economic growth. Abstract China's leaders are increasingly committed to low-carbon economic development. Although China's economy has dramatically transformed since the initiation of economic reforms in 1978, it is still structurally different from post-industrial, high-income countries, and economic reform is ongoing. At the same time, China is taking major steps towards regulating its carbon dioxide emissions. China is currently preparing to implement a national carbon dioxide emissions trading system (ETS), which will be the largest ETS in the world. Our analysis demonstrates how these major economic and emissions policies are linked in China's economy. We use a dynamic computable general equilibrium (CGE) model of China's economy to simulate the interaction between a structural transition policy and a national ETS. We demonstrate an important policy instrument – the household savings rate – for stimulating economic transition. We show that by increasing consumption in lower emissions-intensity sectors, China can sustain growth in its economy while reducing emissions and transitioning to a more OECD-like economic structure. In addition, emissions reductions from an ETS regulation can be achieved at a lower cost for regulated firms when taking into account the changing structure of the economy. [ABSTRACT FROM AUTHOR]

Employment impacts are one of the most important social impacts associated with the development of renewable energy, and are also one of the key concerns for policy makers designing renewable energy policies. Current studies tend to focus on the direct job changes in renewable sectors per se and on the indirect job changes along value chains of renewable energy, therefore depicting a picture of prosperity with large amounts of “green jobs”. However, the induced job changes in other sectors that are not directly in the value chains but are still influenced by electricity price changes and related financial resource transfers have usually been neglected, resulting in an incomplete and potentially biased understanding of this specific category of social impact. By using a computable general equilibrium (CGE) model of China that incorporates detailed renewable power generation technologies and considers labor market imperfections, our study tries to fill this gap and quantifies the full scope of job changes (direct, indirect and induced) brought by renewable energy development in China. Results show that per 1 TW h expansion of solar PV and wind power would create up to 45.1 thousand and 15.8 thousand, respectively, direct and indirect jobs in China. However, the scale of induced job changes is quite significant and may even lead to net job losses in the whole economy in some cases. We have further revealed the sectoral contributors to total job changes. In all, there are no assured conclusions on the occurrence of green jobs when developing renewable energy. The impacts are highly dependent on the species of renewable energy, the financing mechanisms for renewable subsidies, and the scopes of employment impacts. We suggest that full-scope employment impacts should be carefully considered and the detailed supporting policies should be carefully designed by decision makers when promoting renewable energy. [ABSTRACT FROM AUTHOR]

Jurisdictions throughout the world are contemplating greenhouse gas (GHG) mitigation strategies that will enable meeting long-term GHG targets. Many jurisdictions are now focusing on the 2020-2050 timeframe. We conduct an inter-model comparison of nine California statewide energy models with GHG mitigation scenarios to 2050 to better understand common insights across models, ranges of intermediate GHG targets (i.e., for 2030), necessary technology deployment rates, and future modeling needs for the state. The models are diverse in their representation of the California economy: across scenarios with deep reductions in GHGs, annual statewide GHG emissions are 8-46 % lower than 1990 levels by 2030 and 59-84 % lower by 2050 (not including the Wind-Water-Solar model); the largest cumulative reductions occur in scenarios that favor early mitigation; non-hydroelectric renewables account for 30-58 % of electricity generated for the state in 2030 and 30-89 % by 2050 (not including the Wind-Water-Solar model) ; the transportation sector is decarbonized using a mix of energy efficiency gains and alternative-fueled vehicles; and bioenergy is directed almost exclusively towards the transportation sector, accounting for a maximum of 40 % of transportation energy by 2050. Models suggest that without new policies, emissions from non-energy sectors and from high-global-warming-potential gases may alone exceed California's 2050 GHG goal. Finally, future modeling efforts should focus on the: economic impacts and logistical feasibility of given scenarios, interactive effects between two or more climate policies, role of uncertainty in the state's long-term energy planning, and identification of pathways that achieve the dual goals of criteria pollutant and GHG emission reduction. [ABSTRACT FROM AUTHOR]