Cross-regional economic impact of carbon emission regulations: A quantitative spatial equilibrium model for China.

• We develop a quantitative spatial equilibrium model with emissions regulation. • Counterfactual analyses of regional structural changes due to emissions regulation. • Emissions regulations impact regional GDP via regional-sectoral linkages. • Cross-regional impacts of emissions regulations have typical geographical characteristics. • Sectoral linkages widen variation in emissions regulations' impact on regional GDP. We develop and quantitatively evaluate a spatial general equilibrium model that incorporates carbon emission regulations. We study the impact of emission regulation on the economies of regions within a country under climate change mitigation goals, and how the impact of emission regulation in one region influences other regions through regional‒sectoral linkages. The model is calibrated using Chinese regional and sectoral data, and several counterfactual exercises are performed. The results indicate that undifferentiated increases in emission regulation across regions have resulted in inter-regional differences in real GDP changes; however, "equity-oriented" regionally differentiated emissions regulations reduce this imbalance. Regarding interactions between regions, negative impacts on the economy are characterized by geographical proximity, whereas positive impacts are not geographically constrained. Sectoral linkages exacerbate the negative economic impacts of emission regulations and widen regional disparities. Additionally, we demonstrate the extended application of our model through two case studies. [ABSTRACT FROM AUTHOR]