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Carbon tax scenarios for China and India: exploring politically feasible mitigation goals

  • Emanuele Massetti
Original Paper

Abstract

China and India are two Asian giants and global players. They both have large populations and booming economies hungry for energy. China and India will therefore play a major role in shaping future global emissions of greenhouse gases. This paper assesses emissions reductions targets that can be realistically adopted by China and India in the following rounds of climate negotiations. The analysis is based on a business-as-usual (BaU) scenario and on four carbon tax scenarios until 2050, developed using the WITCH model. Results show that the lowest level of taxation (starting at 10$ per tonne of CO2 in 2020) would reduce emissions in 2050 by 25% in China and by 30% in India, with respect to the BaU, at little cost. The marginal abatement cost curves are, however, steep and a higher level of taxation brings little emissions reductions at high costs. In China, only the two highest tax levels reduce emissions in 2050 below the 2005 level. In India, emissions in 2050 are higher than in 2005 even with the highest tax. Therefore, the pledge of the G8 and the MEF of reducing global emissions by 50% in 2050—with high-income countries cutting them by 80% and low-income ones by 25–30%—appears extremely costly and therefore unrealistic. A more sensible international climate architecture would push for the introduction of a moderate control of emissions in China and India and would avoid overly ambitious targets.

Keywords

Climate change mitigation China India Energy efficiency Energy and development 

Abbreviations

BaU

business-as-usual

COP

Conference of parties

EIA

Energy information administration

EU27

The 27 member countries of the European union

G8

The group of eight

GDP

Gross domestic product

GHG

Greenhouse gas

IAM

Integrated assessment model

IEA

International energy agency

MACCs

Marginal abatement cost curves

MEF

Major economies forum

OECD

Organization for economic cooperation and development

TPES

Total primary energy supply

Notes

Acknowledgments

This paper is part of the research work being carried out by the Sustainable Development Programme at the Fondazione Eni Enrico Mattei and by the Climate Impacts and Policy Division of the Euro-Mediterranean Centre on Climate Change. Financial support under the Climate Policy Outreach project, from the European Community’s Seventh Framework Programme (FP7/2007-2013) under grant agreement n° 244766 - PASHMINA (PAradigm SHifts Modelling and INnovative Approaches) and the EC2 Europe-China Clean Energy Centre is gratefully acknowledged. A previous version of this paper was published as FEEM Working Paper No. 24.2011 in March 2011, with the title ‘A Tale of Two Countries: Emissions Scenarios for China and India’.

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Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.Fondazione Eni Enrico Mattei and Euro-mediterranean Centre for Climate ChangeMilanItaly

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