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Environmental and Resource Economics

, Volume 72, Issue 4, pp 1099–1119 | Cite as

The Convergence of China’s Marginal Abatement Cost of CO2: An Emission-Weighted Continuous State Space Approach

  • Jianxin Wu
  • Chunbo MaEmail author
Article

Abstract

This paper develops a weighted continuous state space approach to convergence analysis and makes a first empirical attempt at examining the heterogeneity and convergence of China’s marginal abatement cost (MAC) of CO2 using a dataset of 286 cities during the years 2002–2013. The results show clear patterns of convergence in China’s MAC but substantial heterogeneity remains in the long run. Both joint and conditional emission-weighted distributions suggest less heterogeneity in abatement cost but greater potential for low-cost abatement opportunities than it appears in the commonly-presented unweighted distributions. The findings provide strong scientific support for China to take more proactive and aggressive measures to mitigate CO2 emissions.

Keywords

Marginal abatement cost Carbon emissions Convergence State space approach Continuous dynamic distribution approach China 

JEL Codes

Q52 Q53 Q54 Q58 D24 D61 

Notes

Acknowledgements

The research received financial support under a number of funding schemes including the ECR Fellowship Support Award at the University of Western Australia, China National Social Science Foundation (No. 15ZDA054), Humanities and Social Sciences of Ministry of Education Planning Fund (No. 16YJA790050) and the National Natural Science Foundation (No. 71333007).

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Copyright information

© Springer Science+Business Media B.V., part of Springer Nature 2018

Authors and Affiliations

  1. 1.Institute of Resource, Environment and Sustainable Development Research, College of EconomicsJinan UniversityGuangzhouChina
  2. 2.Department of Economics, China Center for Economic Development and Innovation Strategy, College of EconomicsJinan UniversityGuangzhouChina
  3. 3.School of Agriculture and EnvironmentUniversity of Western AustraliaCrawleyAustralia

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