Journal Article

Estimating the Marginal Abatement Cost Curve of CO2 Abatement in China: Provincial Panel Data Analysis

Energy Economics, 48: 217-229

This paper estimates the Marginal Abatement Cost Curve (MACC) of CO2 emissions in China based on a provincial panel for the period of 2001-2010. The provincial marginal abatement cost (MAC) of CO2 emissions is estimated using a parameterized directional output distance function. Four types of model specifications are applied to fit the MAC-carbon intensity pairs. The optimal specification controlling for various covariates is identified econometrically. A scenario simulation of China’s 40-45 percent carbon intensity reduction based on our MACC is illustrated. Our simulation results show that China would incur a 51-57 percent marginal abatement cost increase to achieve a corresponding 40-45 percent reduction in carbon intensity compared to its 2005 level.


Limin DU


Publication Date
JEL Classification
Q52, Q54, Q58

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