Can China afford to commit itself an emissions cap? An economic and political analysis

As the world's second largest carbon emitter, China has long been criticised as a 'free-rider' enjoying benefits from other countries' efforts to abate greenhouse gas emissions but not taking due responsibilities of its own. China has been singled out as one of the major targets at the subsequent negotiations after the Kyoto curtain had fallen. By analysing the historical contributions of inter-fuel switching, energy conservation, economic growth and population expansion to China's CO(2) emissions during the period 1980-1997, this article first demonstrates that the above criticism cannot hold its ground. Next, we analyse what the economic effects would be if China's carbon emissions in 2010 were cut by 20 and 30%, respectively, relative to the baseline. We found that China's GNP losses under the two less restrictive carbon limits are in the same range as the often reported estimates for industrialised countries under very restrictive carbon limits. Then the article envisions some efforts and commitments that could be expected from China until its per capita income catches up with the level of middle-developed countries. By emphasising the win-win strategies, these efforts and commitments could be unlikely to severely jeopardise China's economic development and, at the same time, would give the country more leverage at the post-Kyoto climate change negotiations. Finally, the article is concluded with the argument that combating global climate change is in China's interest. It will be beneficial to a more sustainable development of the Chinese economy as well as to the global climate. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classifications: D58; Q43; R13.