How China can recoup cost of climate goals

If China meets its greenhouse gas-reduction goal, it will enjoy air quality and health benefits with monetary savings that could offset the cost of implementing the climate policy.

If China meets its greenhouse gas-reduction goals, it will experience air quality and health benefits with associated monetary savings that could offset the total cost of implementing the climate policy.

This is according to an American team of economists and atmospheric scientists, whose study, published on Monday in Nature Climate Change, estimated fewer deaths from air pollution means a US$339 billion savings in 2030 that could be as much as four times what it would cost China to meet its climate goals.

“The country could actually come out net positive, just based on the health co-benefits associated with air quality improvements, relative to the cost of a climate policy,” said study co-author Noelle Eckley Selin, an associate professor in Massachusetts Institute of Technology.

The study was led by Selin and Valerie Karplus, an economist in the institute’s Sloan School of Management.

China has pledged to reduce domestic carbon dioxide emissions in an international effort to keep global temperatures from rising more than 2 degrees Celsius above pre-industrial levels, as part of the 2015 Paris Agreement on climate change.

The team developed a new modeling approach which combines an energy-economic model called the China Regional Energy Model (C-REM) with GEOS-Chem, an atmospheric chemistry model.

C-REM models China’s economy and energy system at a provincial level, and the researchers used the model to simulate how a given climate policy changes a province’s economic activity, energy use, and emissions of carbon dioxide and air pollutants.

They ran simulations under four scenarios: a no-policy, business-as-usual scenario; and three different policy scenarios that aimed to reduce carbon dioxide emissions by 3, 4, and 5 percent a year, respectively, through 2030.  The 4 percent scenario is in line with China’s pledge to reach peak carbon dioxide emissions before 2030 under the Paris Agreement.

The team then plugged the results of each scenario into the GEOS-Chem model, which simulates how the various emissions and pollutants produced by C-REM combine in the atmosphere to form particulate matter province by province.

They overlaid this map of particulate concentrations onto population maps to calculate the amount of pollution that communities are breathing in, then consulted epidemiological literature to determine the number of avoided deaths that would occur, based on a province’s exposure to a certain amount of pollution. The researchers calculated the economic value of these deaths.

After converting each scenario’s health co-benefits into a monetary value, the team found that, compared to the total cost of implementing a 3, 4, or 5 percent per year policy, the savings gained as a result of health co-benefits equals US$138.4 billion, US$339.6 billion, and US$534.8 billion respectively.

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