China needs to reduce its carbon emissions if global climate change mitigation is to succeed. Conventional economic analysis views cutting emissions as a cost, creating a collective action problem. However, decarbonization can improve productivity and provide co-benefits that accord with multiple national policy objectives. We track China's progress in reducing the emissions intensity of the economy, and construct a macro scenario with China's carbon emissions peaking in the 2020s. Investment in greater energy productivity and economic restructuring away from heavy industries can bring productivity gains, and decarbonization of energy supply has important co-benefits for air pollution and energy security. Combined with lower climate change risks and the likelihood that China's actions will influence other countries, this suggests that cutting carbon emissions is not only in China's self-interest but also in the global interest. To properly identify the true costs and benefits of climate change action requires new thinking in economic analysis.
The paper appears in the Special Issue: Climate Change and Green Growth: New Thinking.
Green growth is a relatively new concept aimed at focusing attention on achieving sustainable development through the efficient use of environmental assets without slowing economic growth. This paper presents a real-world application of the concept, and identifies viable policy options for achieving a complementary environmental regulatory framework that minimizes output and employment losses. The analysis utilizes macro level data from the Turkish economy, and develops an applied general equilibrium model to assess the impact of a selected number of green policy instruments and public policy intervention mechanisms, including market-based incentives designed to accelerate technology adoption and achieve higher employment and sustainable growth patterns.
The report Climate change and primary industries: Impacts, adaptation and mitigaton in the Nordic countries and policy recommendations provide a baseline and a way forward, a focus for the activities that can help the Nordic region to address the threats and opportunities of climate change for our primary production systems.
This paper uses a Directional Distance Function (DDF) and the Malmquist–Luenberger Productivity Index to estimate the changing patterns of ‘green’ total factor productivity (GTFP) growth of 38 Chinese industrial sectors during the period 1980–2010. Unlike the measures of traditional total factor productivity (TFP) growth, the DDF incorporates carbon dioxide emissions as an undesirable output directly into the production technology, which credit sectors for simultaneously reducing their emissions and increasing their output. Our estimates of aggregate and sector-level GTFP growth reveal that Chinese industry is not yet on the path towards sustainable, low-carbon growth. A dynamic panel data analysis of the determinants of GTFP across sectors is used to identify factors that might rectify this situation, including state owned enterprise (SOE) reform, the growth of small private enterprises, continued openness to foreign investment and higher spending on R&D, particularly in emission-intensive sectors.
This report examines the diverse realities of Small Island Developing States (SIDS) through an integrated approach. While SIDS have bountiful supplies of renewable resources and unique cultural assets, they often face daunting challenges resulting from isolation and remoteness coupled with climate change, natural disasters, and out-migration. Furthermore, global financial shocks and increasing fuel and food prices are threatening core economic sectors such as tourism.
Built on combinations of realistic outlooks, this report develops an ensemble of four island-centric futures: the blue-green economy; technology leapfrogging; priority to island community and culture; and reconnecting with nature, to help individual states consider policy choices that best respond to their needs. This report shows that there is much that SIDS can do proactively to anticipate environmental problems and their economic consequences or even avoid them through innovative planning and action.
Over the course of the last two decades, the issues surrounding technological innovation, investor behaviour, and business resilience have become magnified in the context of environmental change. This has helped to bring forward the issue of stranded assets as a sustainability concern beyond regulatory action on competition policy. This paper, produced to help inform an International Institute for Sustainable Development (IISD) and UNEP Inquiry collaboration with policymakers in China, examines the risks and opportunities associated with stranded assets, provides five international case studies, and identifies how these issues might be relevant to Chinese policy makers.