China and India are increasingly important for global climate policy and the literature show that if ambitious climate targets are to be met, mitigation effort in these large developing countries is necessary. This report presents a detailed overview of how different climate policy regimes may affect China and India. It compares the available scientific literature on burden sharing regimes, with respect to allowances, peaking year and macro‐economic impact or direct costs of mitigation.
We find that reductions for both China and India differ greatly between studies, and hence, not only across regimes but also within regimes.
Two indicators are important for allocation of emission allowances: emissions per capita and GDP per capita ("capability"). China is currently close to the global average CO2 emissions per capita, but its GDP per capita is still considerably below the global average. As a result, allocated allowances are below baseline expectations or even below 2005 emission levels in many studies and regimes. For China, Multi‐stage, Common but Differentiated Convergence, Triptych and Historic Responsibility show the highest emission allowances and lowest costs / economic impact of mitigation costs (net of abatement costs and allowance import/export). Grandfathering and C&C lead to large reductions in allocated emissions for China. For 2050, most low stabilisation scenarios (IPCC cat I) show that the allocated emission allowances to China would be 50‐80% below emissions levels prevailing in 2005 levels, with hardly any differentiation by regimes. Still, mitigation costs (net of abatement costs and allowance import/export) or macro‐economic impact in many regimes remains below the global average. Low stabilisation scenarios show emissions that peak relatively early. The mean peaking year of allowances in low stabilisation scenarios is before 2020.
India emissions and GDP per capita are currently far below the global average, and as a result its allocated allowances are mostly above baseline expectation and it can potentially have large revenues from excess allowances if regimes allow so. India can increase its emissions considerably and still emit below its allocated allowances, relative to 2005 – but the allocated allowances are below baseline emissions in a number of studies and regimes. Many regimes seem attractive: Equal per capita and Multi‐stage allow for small surpluses, whereas Common but Differentiated Convergence and the South‐North proposal contain slightly lower allowances than baseline. Grandfathering and a global carbon tax are clearly unattractive regimes. Due to revenues from excess allowances, climate policy seems beneficial for India, except in regimes that are clearly unattractive, like Grandfathering and taxation. Most regimes require Indian emissions to peak towards midcentury. In most low stabilisation scenarios, the peaking year is around 2030‐2040.