Carbon emission control strategies for China: A comparative study with partial and general equilibrium versions of the China MARKAL model

Abstract

China's carbon dioxide emissions from fossil fuel combustion had increased with an annual growth rate of 4.36% since 1980, hitting 1 GtC in 2003. The global climate change issue is becoming more and more important and hence to be the fourth challenge for China's future energy development, following energy supply shortages, energy security, and local environmental protection. This paper used three MARKAL (MARKet ALlocation) family models, that is, MARKAL, MARKAL-ED (MARKAL with elastic demand), and MARKAL-MACRO, to study China energy system's carbon mitigation strategies and corresponding impacts on the economy. The models’ structures and the economic feedback formulations used in MARKAL-MACRO and MARKAL-ED are briefly described. The endogenous demands in MARKAL-MACRO and MARKAL-ED enable them to partly satisfy carbon abatement constraints via energy service demand reductions, and the reduction levels for the 30 demand sectors from these two kinds of models for given carbon emission constraints are presented and compared. The impact of carbon mitigation on social welfare from MARKAL and MARKAL-ED, and on GDP, investment and consumption from MARKAL-MACRO are evaluated. The changes in both final and primary energy mix, changes in technology development, as well as marginal abatement costs for given carbon constraints from the three models, are analyzed.