The effect of technology adoption on CO2 abatement costs under uncertainty in China's passenger car sector

Abstract

With increasingly severe energy and environmental issues in China, it is essential to reduce energy consumption and CO2 emissions by promoting energy-saving technologies in vehicles. Combined with the 13th five-year CO2 abatement target in the passenger car sector, this study establishes the marginal abatement cost (MAC) curves of vehicle energy-saving technology bundles in China's passenger car sector during 2016–2020 under multiple uncertainties. The total cost to achieve the CO2 abatement target under uncertainties is investigated and the effect of technology adoption on reducing the CO2 abatement cost is estimated. Results show that the average MAC of the passenger car sector is relatively high (2347.21 RMB/t), with more obvious fluctuations compared to the reduction potential. Under integrated uncertainties, Hybrid Electric Vehicle (HEV)_path and Vehicle-technology could be preferentially promoted in the early stage of technology popularization in the passenger car sector, while Plug-in HEV_path and Hybrid-technology could be preferred in the later stage. The cumulative cost to achieve the 2020 fuel-economy target is about 33,150 million (M) RMB in the reference scenario. Compared to energy-substitution, the energy-efficiency paths or technologies have relative cost advantages and play a more important role in decreasing the CO2 abatement cost; of these, the HEV_path, Diesel_path, Transmission-technology and Vehicle-technology could be preferred.