The cost-benefit comparisons of China's and India's NDCs based on carbon marginal abatement cost curves

Abstract

Incorporating co-benefits of carbon abatement policies can offset costs and inspire greater and faster reductions in emissions in many cases. Most studies on co-benefits are carried out within a partial equilibrium framework and ignore the general equilibrium effects. Therefore, using a computable general equilibrium model, this study incorporated the co-benefits of carbon abatement policies into the carbon marginal abatement cost curves (MACCs), and evaluated the total abatement costs and cost-saving effects for China and India to achieve their Nationally Determined Contributions (NDC) target. The results indicate that the original carbon MACCs of India in any given year are generally higher than those of China; however, after considering the air pollution-related co-benefits, the overall level of the revised MACCs in China is slightly higher than that of India from 2020 to 2030. In the composition of total co-benefits in China and India, the co-benefits of SO2 reductions account for more than 80% of national total co-benefits, followed by the co-benefits of NOx and PM2.5 reductions. Furthermore, if co-benefits are considered, whether it is China or India, the marginal abatement costs and total abatement costs to achieve NDC targets can be effectively offset; but in comparison, India has more significant cost-saving effects, while for China it will be more difficult to reduce emissions in the latter half of the process of achieving NDC targets. These findings are helpful for developing countries in coordinating and strengthening their ability to tackle climate change and environmental protection.