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Based on Nordhaus’ classic marginal abatement cost form, and the marginal abatement cost curve (MACC) for China calculated by EPPA model, this paper obtains the optimal CO2 abatement allocation among different provinces in China with a minimum total abatement cost. In order to verify the effectiveness of the allocation scheme, we also consider the allocation program of carbon dioxide emissions reduction in population, GDP, and energy consumption, and the result shows that the optimal allocation we propose is the most cost-effective.

Manufacturing industry is developing fast in China, leading to a large amount of energy consumption and CO2 emission. This paper presents a decomposition analysis of energy-related CO2 emission in manufacturing industry in China for the period of 2001-2011. The complete decomposition method developed by Sun is used to analyze the effect of four factors: CO2 intensity, energy intensity, structure change and economy development. The results show that economy development has the largest positive effect and energy intensity has the most negative impact on CO2 emission of Chinas manufacture industry. While the structure change of manufacturing industrial decreases its CO2 emission to a certain extent and the CO2 intensity increases its CO2 emission slightly, but both of them have large potentials in CO2 reduction.

With the development of economy and technology, the world produces more and more greenhouse gases (GHGs), which result in global warming. The Kyoto Protocol signed in 1997, marked the resolution of human fighting global warming. The developed countries are committed to achieve their GHGs emission targets under the protocol, developing nations play similar roles on a voluntary way. However, recently Copenhagen, Cancun and Durban Climate Conference, didn’t reach an agreement of the post-Kyoto era, which cause an uncertain situation in the post-Kyoto era. Due to much of the GHGs come from energy sectors and China is the largest GHGs emission country in the world. It is worthwhile to review the Chinese energy situation. A carbon intensity decomposition model is used to analyze the influencing factors of the carbon intensity because the Chinese target is reducing 40%-45% carbon intensity in 2020 on the basis of 2005. Then this paper analyzes the potential of carbon trading potential in China. This paper comes to a conclusion that the influencing factors of the carbon intensity are mainly energy structure and energy intensity. Carbon trading market is a good choice for China because China has good potential in GHGs reduction in the energy sector and carbon trading market can help China realize the target in 2020.