Closing the Gap between Carbon Neutrality Targets and Action: Technology Solutions for China's Key Energy-Intensive Sectors.

Facing significant carbon emissions annually, China requires a clear decarbonization strategy to meet its climate targets. This study presents a MESSAGEix-CAEP model to explore Chinese decarbonization pathways and their cost-benefit under two mitigation scenarios by establishing connections between five energy-intensive sectors based on energy and material flows. The results indicated the following: 1) Interaction and feedback between sectors should not be disregarded. The electrification process of the other four sectors was projected to increase electricity production by 206%, resulting in a higher power demand than current forecasts. 2) The marginal abatement cost to achieve carbon neutrality across all five sectors was 2189 CNY/tCO2, notably higher than current Chinese carbon emission trading prices. 3) The cost-benefit analysis indicates that a more ambitious abatement strategy would decrease the marginal abatement cost and result in a higher net carbon abatement benefit. The cumulative net benefit of carbon reduction was 7.8 trillion CNY under ambitious mitigation scenario, 1.3 trillion CNY higher than that under current Chinese mitigation scenario. These findings suggest that policy-makers should focus on the interaction effects of decarbonization pathways between sectors and strengthen their decarbonization efforts to motivate early carbon reduction.

Does China's Pilot Carbon Market Cause Carbon Leakage? New Evidence from the Chemical, Building Material, and Metal Industries.

The carbon market is an effective market for reducing greenhouse gas emissions; however, the existence of carbon leakage affects the emissions reduction effect of the carbon market. Using the multiregional input-output (MRIO) model and the difference-in-differences (DID) methodology, this study examined whether the chemical, building materials, or metals industries in China's pilot carbon market have caused carbon leakage, the extent of the carbon leakage, and the areas to which the industries with carbon leakage have transferred their carbon emissions. The results showed that the pilot carbon market caused carbon leakage in the chemical, building materials, and metal industries. The building materials industry had the most serious carbon leakage, followed by the chemical industry, and the metal industry was the weakest. In addition, regardless of the industry, most of the areas affected by carbon leakage were concentrated in regions with relatively backward economic development and weak in-place environmental regulations, such as in the central and western regions. Compared with the other pilot areas, Guangdong was the area most likely to be affected by carbon leakage from other pilot areas. This study provides new evidence for the existence of carbon leakage in China's pilot carbon market from an industrial perspective.