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A Comprehensive Package of Macroeconomic Policy Measures for Implementing China’s Climate Mitigation Strategy
Author:
Jean Chateau
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Ms. Wenjie Chen null

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Ms. Florence Jaumotte null

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Karlygash Zhunussova
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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 142
Language:
English
Publication Date:
15 Jul 2022
DOI:
https://doi.org/10.5089/9798400215711.001
ISBN:
9798400215711
ISSN:
1018-5941
Pages:
44
Keywords:
Chinese economy; climate policy; carbon neutrality; rebalancing; Computable General Equilibrium model; mitigation strategy; E. Policy simulation; climate strategy; power market; climate mitigation initiative; Greenhouse gas emissions; Non-renewable resources; Consumption; Global; ETS trading price; carbon pricing scheme
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper presents ways for China to achieve its climate goals while also attain high-quality growth—growth that is balanced, inclusive, and green. Using a dynamic computable general equilibrium model that is calibrated to China, multiple scenarios are considered that incorporate a sequence of layered policies: (i) frontloading mitigation with an earlier emissions peak, (ii) power market reforms, and (iii) economic rebalancing. The results highlight that these policies can significantly contribute to the success of the climate strategy overall, including by lowering the shadow price of carbon as well as the associated mitigation costs. Distribution analysis offers proposals to lessen the impact on vulnerable households.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund