Impacts of China's Emissions Trading Scheme on the National and Hong Kong Economies: A Dynamic Computable General Equilibrium Analysis

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aut.relation.journalFrontiers in Environmental Scienceen_NZ
aut.relation.volume8en_NZ
aut.researcherWinchester, Niven
dc.contributor.authorWang, Yen_NZ
dc.contributor.authorWinchester, Nen_NZ
dc.contributor.authorWebster, CJen_NZ
dc.contributor.authorNam, K-Men_NZ
dc.date.accessioned2021-03-12T00:27:01Z
dc.date.available2021-03-12T00:27:01Z
dc.description.abstractIn this study, we estimate the economic impacts of China's official carbon-mitigation targets, in connection with Hong Kong's potential participation in a proposed national emissions trading scheme. We find that moderate intensity-reduction targets emulating China's pledged Paris Agreement commitment would incur much larger policy-compliance costs in Hong Kong (0.1–2.5% of baseline gross domestic product) than in Mainland China (0.1–0.7%) in each of the modeled years 2021 to 2030 when each economy operates its own independent carbon market. By comparison, an integrated carbon market enables Hong Kong to achieve the same reduction goal at up to 78% lower costs compared to an independent market, and this is achieved without significantly affecting the Mainland's economy. These savings in compliance costs for Hong Kong are greater when pre-integration local carbon prices in both economies are subject to a larger gap. Effectively, the cheaper pre-integration carbon prices in the Mainland indirectly subsidize the Hong Kong economy in the initial years of the integration scenario, buffering the policy shock. In sum, an integrated carbon market in China would improve overall efficiency at the national level, but the benefits are biased toward Hong Kong. This finding suggests that it is in the city's interest to play a more active role in cross-border collaboration on climate mitigation and emissions trading.en_NZ
dc.identifier.citationFrontiers in Environmental Science. 8:599231. doi: 10.3389/fenvs.2020.599231
dc.identifier.doi10.3389/fenvs.2020.599231en_NZ
dc.identifier.issn2296-665Xen_NZ
dc.identifier.urihttps://hdl.handle.net/10292/14047
dc.publisherFrontiers Media SAen_NZ
dc.relation.urihttps://www.frontiersin.org/articles/10.3389/fenvs.2020.599231/full
dc.rights© 2020 Wang, Winchester, Webster and Nam. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
dc.rights.accessrightsOpenAccessen_NZ
dc.subjectEmission trading scheme; Climate change; China; Hong Kong; Computable general equilibrium
dc.titleImpacts of China's Emissions Trading Scheme on the National and Hong Kong Economies: A Dynamic Computable General Equilibrium Analysisen_NZ
dc.typeJournal Article
pubs.elements-id398769
pubs.organisational-data/AUT
pubs.organisational-data/AUT/Faculty of Business, Economics and Law
pubs.organisational-data/AUT/Faculty of Business, Economics and Law/School of Economics
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