A general equilibrium analysis on the impacts of regional and sectoral emission allowance allocation at carbon trading market

It is critical to adapt to climate change and reduce the overall carbon emissions. China announced its Nationally Determined Contributions (NDC) at the Paris climate conference in 2015. The carbon cap-and trade scheme, which plays a key role in carbon emissions abatement, is an effective policy for China to achieve its NDC. This study focuses on the allocation of regional and sectoral initial carbon emission allowances in Shanghai. An impact evaluation on the macro-economy, carbon trading markets and participating sectors for the year 2030 was conducted by applying a computable general equilibrium (CGE) model. The results show that the carbon cap-and-trade scheme would cause a 3.4% GDP loss and an 8.9% welfare loss in 2030. The carbon price would be 161.2 USD/t and 147.2 USD/t under the two representative scenarios. The allocation of initial allowances would have a significant impact on both carbon market scale and sectoral trading behaviors. The power generation sector and the petrol oil sector would undertake the greatest output loss, while the metal smelting sector would become the main seller. Furthermore, the initial allowances allocation under a certain abatement target would hardly affect sectoral production but remarkably affect trade behaviors at the carbon trading markets

Improving Energy Efficiency for All: Lessons on Sustainable Building Retrofits from Shanghai, China

Worldwide, urban areas consume between 60% and 70% of total primary energy,1 of which buildings account for close to half. With trillions of tonnes of carbon-intensive concrete already poured, and many of the buildings that will be operational for decades to come already built, improving the energy efficiency of existing buildings through retrofit is often a priority for climate action. In Shanghai, China, one district has emerged as an example of leadership in China’s green buildings sector. Changning District established a dedicated entity – the Changning Low Carbon Office – to coordinate energy efficiency retrofitting efforts. Additionally, the District created China’s first online platform for monitoring the energy performance of buildings and is working with municipal and national government to offer subsidies to incentivise investments in retrofitting. Thanks to effective collaboration between all tiers of government, retrofits have been rolled out across almost half of the district’s public and commercial floor space, with energy reductions of between 20% and 30% per building. This reduction is preventing the emission of around 190,000 tonnes of carbon dioxide (CO2 ) annually – the equivalent of removing 65,000 cars from Shanghai’s streets