Subnational Carbon Research Articles

An Inquiry into the Characteristics of Carbon Emissions in Inter-Provincial Transportation in China: Aiming to Typological Strategies for Carbon Reduction in Regional Transportation

The low-carbon development of the transportation sector is crucial for China to achieve its national goals of carbon peaking and carbon neutrality. Since China is a vast country with unbalanced regional development, there are considerable differences in the levels of carbon dioxide emissions from the transportation sector across regions. Therefore, revealing the influencing factors that shape the characteristics of transportation carbon dioxide emissions (TCO2) can inform tailored sub-national carbon reduction strategies based on local conditions, which is an important technical approach for achieving national goals. Based on an extended Kaya identity, we derived indicators of the impacts on provincial TCO2 from factors such as economic development, population density, energy structure, transportation efficiency, technology research and development (R&D), infrastructure construction, transportation operation conditions, and residents’ transportation behavior. Using a multi-indicator joint characterization method, we explored the characteristics of provincial TCO2 in China in 2019. By applying Ward’s method to hierarchical clustering, the thirty provinces of China were classified into six characteristic types (Types I to VI). Based on the total TCO2 (TC), the intensity of TCO2 (TI), and the per capita TCO2 (TP) calculated for each province in 2019, the priority control directions and indicators for carbon reduction in each type were obtained through relative relationships with provincial averages and correlation analysis with the indicators. Specifically, Type I and Type IV can be categorized as TP-controlled, Type II and Type III as TC-controlled, and Type V and Type VI as TI-controlled. Finally, we provided typological strategies and key performance indicators (KPIs) relevant to local governments to better achieve carbon reduction goals in each provincial type. It can promote cooperative development and collaborative governance in carbon reduction across regions and the unified implementation of China’s dual-carbon goals.

Carbon pricing and firms’ GHG emissions: Firm-level empirical evidence from East Asia

This study investigates the impacts of carbon pricing policies on firms' greenhouse gas (GHG) emissions. We include two carbon pricing policies: carbon tax and emission trading scheme (ETS) at national and sub-national (province) levels, measured as policy existence (binary variable) and carbon price (continuous variable). Firms' GHG emissions are measured as total emissions and emission intensity. Using unique recent firm-level data from 2010 to 2021 from three East Asia countries (Japan, the Republic of Korea (ROK), and the People's Republic of China (PRC)), we obtain the following key findings. First, the national carbon pricing policy significantly reduced firms' GHG emissions and GHG emission intensity in Japan and the ROK. The greater the carbon price, the greater the impact. Second, the subnational carbon pricing policies implemented in two provinces of Japan (Saitama and Tokyo) decreased firms' GHG emissions. Third, heavy industry sectors such as energy, utilities, and industrials experienced a substantial decrease in GHG emission intensity due to the carbon pricing policy. Finally, our main results are robust to different model specifications and various measures of firms' GHG emissions. Although literature studying the ex-post impact of carbon pricing on emissions at country and sector-level is abundant, this paper contributes to the existing literature providing empirical evidence of the impact of carbon pricing policies on firms' emissions using firm-level data, which is highly limited especially in Asia.

Use of nested multi-regional input–output analysis for the evaluation of subnational emission reduction policies: A case of Japanese prefectures

Many subnational regions around the world, in their own capacity for policy formulation and implementation, have set targets for net-zero carbon dioxide or greenhouse gas emissions. However, most targets do not consider consumption-based emissions, which include emissions generated outside their borders to produce the products they consume. It is partly due to methodological difficulties and data gaps that subnational governments often face but this situation could misguide their efforts in the face of the goal of reducing global emissions. To facilitate an understanding of consumption-based subnational carbon emissions and informed subnational policymaking, this study proposes a relatively simple and less data-intensive methodology for subnational consumption-based emission analysis. It uses a nested multi-regional input–output approach by combining a publicly available global multi-regional input–output table and a subnational input–output table, whose computation is repeated for multiple regions for comparison. A case study of three Japanese prefectures with different levels of renewable electricity consumption was conducted using the 2015 datasets. The results showed that two prefectures with similar socioeconomic conditions, except for their totally different renewable electricity ratios (90 % and 4.6 %), exhibited a 25 % difference (4.4- and 6.0-ton CO2) in per capita household consumption-based carbon dioxide emissions in 2015. Counterfactual policy scenarios were analyzed using the constructed models. Application of an increased renewable electricity scenario indicated that an approximate 10 % increase in the prefectural renewable electricity ratio could reduce household per capita consumption-based emissions by 151–179 kg CO2 in those prefectures. Consumption-based emissions disaggregated by product category indicated that increasing the renewable electricity ratio had significant consumption-based emission reduction effects on not only electricity itself but also on services, particularly commerce, hotel, and restaurant services. The potential impacts of changing renewable electricity ratios on consumption-based emissions were found to be high for products whose share in household spending on local products and electricity cost in their production was large. A scenario analysis of home electrification, assuming the total replacement of household fuel gases and kerosene with electricity, resulted in a modest consumption-based emission reduction potential of less than 10 % for a prefecture with a high renewable electricity ratio and even showed a slight emission increase for a prefecture with a low renewable electricity ratio. In using commonly available datasets without the need to model trade flows between subnational regions, this study's method could realistically be applied by subnational governments to estimate consumption-based emissions of their jurisdiction, compared with other regions, and analyze the potential effects of emission reduction policy scenarios.

How Does State-Level Carbon Pricing in the United States Affect Industrial Competitiveness?

Pricing carbon emissions from an individual jurisdiction may harm the competitiveness of local firms, causing the leakage of emissions and economic activity to other regions. Past research concentrates on national carbon prices, but the impacts of subnational carbon prices could be more severe due to the openness of regional economies. We specify a flexible model to capture competition between a plant in a state with electric sector carbon pricing and plants in other states or countries without such pricing. Treating energy prices as a proxy for carbon prices, we estimate model parameters using confidential plant-level Census data, 1982–2011. We simulate the effects on manufacturing output and employment of carbon prices covering the Regional Greenhouse Gas Initiative (RGGI) in the Northeast and Mid-Atlantic regions. A carbon price of $10 per metric ton on electricity output reduces employment in the regulated region by 2.1 percent, and raises employment in nearby states by 0.8 percent, although these estimates do not account for revenue recycling in the RGGI region that could mitigate these employment changes. The effects on output are broadly similar. National employment falls just 0.1 percent, suggesting that domestic plants in other states as opposed to foreign facilities gain the most jobs from state or regional carbon pricing.

Introduction

Introduction

The Potential of Co-benefits to Spur Subnational Carbon Pricing in North America: A Qualitative Comparative Analysis

Abstract We only partially understand the rise of subnational North American governments as carbon-pricing pioneers because fewer than half of the jurisdictions that consider a carbon-pricing policy (CPP) implement one. This article contributes to the literature on CPPs that relies on political economy dynamics and power relations to explain not only policy outcomes but also the lack thereof. Using a qualitative comparative analysis of fifty-four cases, the article shows that subnational governments that have officially considered a CPP tend to implement it if the visible and local co-benefits of mitigation help them bear the political and economic costs of pricing emissions. Findings also show that the regulation of industries with high risk of carbon leakage does not automatically preclude the enactment of CPPs and that the scope of the policy may be more decisive for implementation.

A framework for localizing global climate solutions and their carbon reduction potential

Localized carbon reduction strategies are especially critical in states and regions that lack top-down climate leadership. This paper illustrates the use of coupled systems in assessments of subnational climate solutions with a case study of Georgia, a state located in the southeastern United States that does not have statewide climate goals or plans. The paper illustrates how robust place-specific plans for climate action could be derived from foundational global and national work and by embedding that research into the context of socio-ecological-technological systems. Our replicable methodology advances the traditional additive sectoral wedge analysis of carbon abatement potential by incorporating solution interdependencies and by spanning both carbon sources and sinks. We estimate that a system of 20 solutions could cut Georgia's carbon footprint by 35% in 2030 relative to a business-as-usual forecast and by 50% relative to Georgia's emissions in 2005. We also produce a carbon abatement cost curve that aligns private and social costs as well as benefits with units of avoided CO2-e. The solutions are affiliated with various social co-costs and co-benefits that highlight societal concerns extending beyond climate impacts, including public health, environmental quality, employment, and equity.

A subnational carbon curse? Fossil fuel richness and carbon intensity among US states

The “carbon curse” theory proposes that fossil fuel richness leads countries to have more carbon intensive development trajectories than they would otherwise. This article tests this theory at the subnational level through an analysis of the 50 US states. Drawing on energy and emissions data from US government sources, descriptive statistics and regression analyses show clear correlations between states’ production of coal, oil, and gas and higher carbon intensities. Evidence is also provided for four carbon curse mechanisms that drive this: extractive emissions, fuel-related crowding out, weaker incentives to invest in energy efficiency, and pressure to subsidize fuel consumption. These mechanisms highlight both new avenues of impact for supply-side climate policy and the difficulty of implementing it. Overall, this article makes the case for further attention to the carbon curse, which could serve as an important analytical bridge between supply and demand-side approaches to climate and energy policy. By demonstrating the likelihood of a subnational carbon curse, it also greatly extends the scope of its potential applicability. Countries that are not fossil fuel rich at a national level but have fuel rich subnational regions should also take heed.

Subnational carbon flow pattern analysis using multi-scale input-output model

As the largest carbon emission country, China is struggling with the carbon outsourcing problem at inter-provincial and international scale. Identifying the role of each provincial region is helpful for mitigation adaptation policy by local government. Based on the Multi-Scale Input-Output model (MSIO), the characteristics of subnational carbon flow pattern embodied in domestic and international trade for China in 2010 are analyzed in a global economy system. Results show that the net export of emissions for the whole of China was 903.4 MtCO2e. Due to regional heterogeneity in economic development and natural resource endowments, different subnational regions present multi-carbon flow patterns categorized into resource supplier (where outflow is greater than inflow, such as Inner Mongolia), self-sufficient type (where local consumption ratio is greater than 50%, such as Qinghai), consumer (where inflow is greater than outflow, such as Beijing), as well as trade hub center and final producer (where both inflow and outflow are large, such as Jiangsu). This study lays a foundation for emission reduction responsibility division and regional mitigation cooperation at subnational scale. Targeted policies implications at subnational scale are recommended for each type accordingly.

Environmental impact of national and subnational carbon policies in China based on a multi-regional dynamic CGE model

Carbon policies are important not only for mitigating global climate change, but also for controlling local and regional air pollution. The large regional disparities in economic development and air pollution across China calls for regionally differentiated policies. Previous studies have not systematically investigated the environmental impacts of regional carbon policies in China covering different spatial scales. This study constructs a multi-regional dynamic computable general equilibrium (CGE) model covering 30 provinces of China to assess the impacts of national and subnational carbon polices on CO2 emissions and co-emitted air pollutants from 2020 to 2050. We consider one national carbon policy which aims to achieve China's 2030 national CO2 abatement target, as well as three regional policies with the same policy stringency as the national one but only applied to eastern China (EP), the Jiangsu-Shanghai-Zhejiang area (JSZP), and the Beijing-Tianjin-Hebei area (BTHP), respectively. We find that regional policies (EP, JSZP, and BTHP) are as effective in reducing CO2 emissions in their targeted regions as the national policy. However, they lead to an increase in CO2 emissions in untargeted regions (the so-called “emissions leakage”). The CO2 leakage rates, which depend on the policy spatial coverage, are 4%, 13%, and 65% for EP, JSZP, and BTHP, respectively, in 2050. Compared with CO2, changes in air pollutant emissions, including sulfur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOC), and fine particulate matter (PM2.5), exhibit a similar pattern under all policy scenarios, but the magnitude of change is significantly smaller. Transportation, thermal power, and some energy intensive industries are the three largest contributors to CO2 and air pollutant emission reductions. Our results suggest that regional carbon policy is effective in reducing CO2 and air pollutant emissions in the targeted regions, and extending the spatial coverage or increasing policy stringency can largely inhibit emissions leakage.

Driving forces underlying sub-national carbon dioxide emissions within the household sector and implications for the Paris Agreement targets in Japan

This study investigated insights into reducing energy-related CO2 emissions in households by examining individual socio-economic drivers at a sub-national level. Specifically, the logarithmic mean Divisia index technique was used to decompose CO2 emission trends into six drivers in all 47 prefectures of Japan during the period from 1990 to 2015. Drivers included the change in the number of households (household effect), distribution of households (distribution effect), household size (size effect), per-capita household energy consumption (consumption effect), household energy choice (choice effect), and sectoral CO2 emission intensity (intensity effect). The results showed that, in contrast to size and the distribution effects, the number of households had a positive, significant effect on CO2 emissions, indicating that recent demographic trends are responsible for the increase in CO2 emissions observed in most of the prefectures during the study period. With regard to effects related to consumption and choice, CO2 emissions due to changes in lifestyle dropped in only seven prefectures and reductions due to changes in sectoral energy choice were seen in only two prefectures in 2015. The intensity effect boosted the emissions of these prefectures the most in 2015 because of the shutdown of nuclear power plants due to the Great East Japan Earthquake. Further, we identified those prefectures that needed to reduce their per-capita energy consumption level in order to attain the reduction targets for household CO2 emissions in 2030 from 2015, given projected changes in demographic trends and recent and projected emission intensities. In order to achieve reductions in total CO2 emissions in line with the Paris Agreement, it is important to prioritize national and local policy interventions for the transfer of new household energy technologies, upgrade household appliances, and encourage people to limit energy consumption in light of the differences in these key drivers in each prefecture.

Striving for equivalency across the Alberta, British Columbia, Ontario and Québec carbon pricing systems: the Pan-Canadian carbon pricing benchmark

ABSTRACTThe Pan-Canadian Framework on Clean Growth and Climate Change is designed to put Canada on track to meet its Paris commitments. A key pillar of the plan is the introduction of a pan-Canadian carbon price by the end of 2018. However, four Canadian provinces, nearly 85% of the Canadian economy and population, have already implemented carbon pricing systems. British Columbia (BC) has a carbon tax. Alberta is transitioning from an output-based allocation system for industrial emitters to a hybrid system combining a carbon levy and refined output-based system. Québec and Ontario have implemented cap-and-trade systems, linked to California. Recognizing these existing systems, rather than impose a single carbon pricing mechanism, the Pan-Canadian Approach to Carbon Pricing gives provinces and territories the flexibility to adopt a carbon tax, a hybrid system, or a cap-and-trade system. To address concerns relating to ‘fairness’ and equivalency of carbon price, a federal carbon pricing benchmark establishes criteria relating to minimum ‘common scope’ and ‘increases in stringency’ that provincial and territorial carbon pricing systems must meet. This article explores the design features of the existing Alberta, BC, Ontario and Québec carbon pricing systems, and considers how the benchmark affects stringency and addresses equivalency of carbon price across these different systems.Key policy insightsCanada is taking advantage of its federal structure of government to introduce a minimum pan-Canadian carbon price of $10/tCO2e in 2018, rising by $10/year to $50/tCO2e in 2022.Rather than imposing a uniform pricing mechanism, the Canadian federal government is recognizing existing subnational carbon pricing mechanisms with very different design features – BC’s carbon tax, Québec and Ontario’s cap-and-trade systems, and Alberta’s hybrid system – to deliver the pan-Canadian carbon price.In order to deliver a minimum level of increasing stringency and to address issues of equivalency of carbon price across sub-national jurisdictions, the federal government is in the early stages of implementing a federal carbon-pricing benchmark.The lessons learned from the Canadian experience will be relevant to harmonizing carbon pricing systems across both other federal jurisdictions and countries.

Air quality co-benefits of subnational carbon policies

ABSTRACTTo mitigate climate change, governments ranging from city to multi-national have adopted greenhouse gas (GHG) emissions reduction targets. While the location of GHG reductions does not affect their climate benefits, it can impact human health benefits associated with co-emitted pollutants. Here, an advanced modeling framework is used to explore how subnational level GHG targets influence air pollutant co-benefits from ground level ozone and fine particulate matter. Two carbon policy scenarios are analyzed, each reducing the same total amount of GHG emissions in the Northeast US: an economy-wide Cap and Trade (CAT) program reducing emissions from all sectors of the economy, and a Clean Energy Standard (CES) reducing emissions from the electricity sector only. Results suggest that a regional CES policy will cost about 10 times more than a CAT policy. Despite having the same regional targets in the Northeast, carbon leakage to non-capped regions varies between policies. Consequently, a regional CAT policy will result in national carbon reductions that are over six times greater than the carbon reduced by the CES in 2030. Monetized regional human health benefits of the CAT and CES policies are 844% and 185% of the costs of each policy, respectively. Benefits for both policies are thus estimated to exceed their costs in the Northeast US. The estimated value of human health co-benefits associated with air pollution reductions for the CES scenario is two times that of the CAT scenario.Implications: In this research, an advanced modeling framework is used to determine the potential impacts of regional carbon policies on air pollution co-benefits associated with ground level ozone and fine particulate matter. Study results show that spatially heterogeneous GHG policies have the potential to create areas of air pollution dis-benefit. It is also shown that monetized human health benefits within the area covered by policy may be larger than the model estimated cost of the policy. These findings are of particular interest both as U.S. states work to develop plans to meet state-level carbon emissions reduction targets set by the EPA through the Clean Power Plan, and in the absence of comprehensive national carbon policy.

Electric Power Resource 'Shuffling' and Subnational Carbon Regulation: Looking Upstream for a Solution

“Resource shuffling,” a form of carbon leakage, occurs when different subnational approaches to carbon regulation create variations in the costs of production across jurisdictions. This Article addresses the “resource shuffling” problem presented by California’s cap-and-trade program and addresses the merits of its legal and regulatory solutions. The potential for “resource shuffling” — replacing cleaner sources of electric power with dirtier and cheaper sources of energy — is a major threat to California’s environmental goals given that about 30 percent of the electricity consumed in California is imported from other states. This imported electricity tends to come from disproportionately dirty sources (such as coal) and represents more than half of the carbon dioxide emitted as a result of California’s electricity demand. Part I of this Article describes resource shuffling and its significance for subnational efforts to regulate greenhouse gas emissions, such as California’s cap-and-trade program for carbon. Part II discusses the tension that California’s initial regulatory strategy presented with federal regulators who oversee wholesale electric power markets. Part III addresses ways to more effectively regulate resource shuffling. This Article argues that federal energy regulators could improve the efficacy of subnational efforts to address GHG emissions and produce greater certainty for power markets by addressing resource shuffling through a harmonized set of rules or guidelines articulating acceptable least-cost dispatch protocols for the operation of wholesale power markets. Absent this kind of upstream approach, resource shuffling will continue to occur, thwarting the ability of subnational regulation to achieve green house gas reduction goals, and uncertainty about shuffling will continue to plague interstate power markets.

Enhancing Conservation, Ecosystem Services, and Local Livelihoods through a Wildlife Premium Mechanism

We propose the wildlife premium mechanism as an innovation to conserve endangered large vertebrates. The performance-based payment scheme would allow stakeholders in lower-income countries to generate revenue by recovering and maintaining threatened fauna that can also serve as umbrella species (i.e., species whose protection benefits other species with which they co-occur). There are 3 possible options for applying the premium: option 1, embed premiums in a carbon payment; option 2, link premiums to a related carbon payment, but as independent and legally separate transactions; option 3, link premiums to noncarbon payments for conserving ecosystem services (PES). Each option presents advantages, such as incentive payments to improve livelihoods of rural poor who reside in or near areas harboring umbrella species, and challenges, such as the establishment of a subnational carbon credit scheme. In Kenya, Peru, and Nepal pilot premium projects are now underway or being finalized that largely follow option 1. The Kasigau (Kenya) project is the first voluntary carbon credit project to win approval from the 2 leading groups sanctioning such protocols and has already sold carbon credits totaling over $1.2 million since June 2011. A portion of the earnings is divided among community landowners and projects that support community members and has added over 350 jobs to the local economy. All 3 projects involve extensive community management because they occur on lands where locals hold the title or have a long-term lease from the government. The monitoring, reporting, and verification required to make premium payments credible to investors include transparent methods for collecting data on key indices by trained community members and verification of their reporting by a biologist. A wildlife premium readiness fund would enable expansion of pilot programs needed to test options beyond those presented here.

Forest and Woodland Cover and Change in Coastal Tanzania and Kenya, 1990 to 2000

Forest and woodland cover and change were calculated for the Zanzibar-Inhambane biogeographical region of Tanzania and Kenya from ∼1990 to ∼2000. A cover and change map was derived from high-resolution satellite imagery from Landsat and supplemental data from aerial overflights, field surveys, and local knowledge. Analyses showed that around 6820 km2 of coastal forest habitat remained in ∼2000 (2260 km2 in Kenya and 4560 km2 in Tanzania). In terms of change, a total of 424 km2 (6%) of forest was cleared between ∼1990 and ∼2000; 53 km2 in Kenya and 371 km2 in Tanzania. Rates of forest loss were 8 times higher in unprotected areas than in protected sites such as Forest Reserves and National Parks. Key Biodiversity Areas had forest loss rates 2.5 times faster than protected areas while Alliance for Zero Extinction sites had the slowest rates of forest loss for the region. These baseline forest cover and change estimates along with future updates can contribute to national and sub-national carbon emission baselines and assessments of species threat within the global Red List.