Reconciling Development and Decarbonization: An Examination of China's Policy Options for Curbing Emissions While Sustaining Supply Chains

Abstract

China faces the challenge of balancing economic growth while meeting carbon emission reduction targets. This essay analyzes current Chinese government policies aimed at reducing emissions, including supply-side reforms, renewable energy subsidies, and awareness campaigns. It argues these policies have limitations, such as only temporary emissions reductions from supply cuts, high costs of subsidies, and lack of infrastructure to support consumer adoption of electric vehicles. To improve outcomes, the essay recommends implementing a carbon tax or cap-and-trade system, choosing the optimal policy based on demand elasticities. It also suggests subsidizing a transition from coal to electricity for heating in rural areas. In conclusion, modifying existing policies and implementing new market-based and technological solutions can help China achieve its twin goals of reducing emissions while maintaining economic growth. The essay provides a thoughtful analysis of the issues and policy trade-offs China faces in balancing environmental sustainability and development.