Economy

 

 

Rong Ma, Bin Chen, Chenghe Guan, Jing Meng, and Bo Zhang. 2018. “Socioeconomic determinants of China’s growing CH4 emissions.” Journal of Environmental Management, 228, 15 December 2018, Pp. 103-116. Publisher's VersionAbstract
Reducing CH4 emissions is a major global challenge, owing to the world-wide rise in emissions and concentration of CH4 in the atmosphere, especially in the past decade. China has been the greatest contributor to global anthropogenic CH4 emissions for a long time, but current understanding towards its growing emissions is insufficient. This paper aims to link China's CH4 emissions during 2005–2012 to their socioeconomic determinants by combining input-output models with structural decomposition analysis from both the consumption and income perspectives. Results show that changes in household consumption and income were the leading drivers of the CH4 growth in China, while changes in efficiency remained the strongest factor offsetting CH4 emissions. After 2007, with the global financial crisis and economic stimulus plans, embodied emissions from exports plunged but those from capital formation increased rapidly. The enabled emissions in employee compensation increased steadily over time, whereas emissions induced from firms' net surplus decreased gradually, reflecting the reform on income distribution. In addition, at the sectoral level, consumption and capital formation respectively were the greatest drivers of embodied CH4 emission changes from agriculture and manufacturing, while employee compensation largely determined the enabled emission changes across all industrial sectors. The growth of CH4 emissions in China was profoundly affected by the macroeconomic situation and the changes of economic structure. Examining economic drivers of anthropogenic CH4emissions can help formulate comprehensive mitigation policies and actions associated with economic production, supply and consumption.
Jinzhao Yang, Yu Zhao, Jing Cao, and Chris P. Nielsen. 2021. “Co-benefits of carbon and pollution control policies on air quality and health till 2030 in China.” Environment International, 152, 2021. Publisher's VersionAbstract
Facing the dual challenges of climate change and air pollution, China has made great efforts to explore the co-control strategies for the both. We assessed the benefits of carbon and pollution control policies on air quality and human health, with an integrated framework combining an energy-economic model, an air quality model and a concentration–response model. With a base year 2015, seven combined scenarios were developed for 2030 based on three energy scenarios and three end-of-pipe control ones. Policy-specific benefits were then evaluated, indicated by the reduced emissions, surface concentrations of major pollutants, and premature deaths between scenarios. Compared to the 2030 baseline scenario, the nationwide PM2.5- and O3-related mortality was expected to decline 23% or 289 (95% confidence interval: 220–360) thousand in the most stringent scenario, and three quarters of the avoided deaths were attributed to the end-of-pipe control measures. Provinces in heavily polluted and densely populated regions would benefit more from carbon and pollution control strategies. The population fractions with PM2.5 exposure under the national air quality standard (35 μg/m3) and WHO guideline (10 μg/m3) would be doubled from 2015 to 2030 (the most stringent scenario), while still very few people would live in areas with the WHO guideline achieved for O3 (100 μg/m3). Increased health impact of O3 suggested a great significance of joint control of PM2.5 and O3 in future policy-making.
Jing Cao, Mun S Ho, and Rong Ma. 2020. “Analyzing carbon pricing policies using a general equilibrium model with production parameters estimated using firm data.” Energy Economics. Publisher's VersionAbstract

Policy simulation results of Computable General Equilibrium (CGE) models largely hinge on the choices of substitution elasticities among key input factors. Currently, most CGE models rely on the common elasticities estimated from aggregated data, such as the GTAP model elasticity parameters. Using firm level data, we apply the control function method to estimate CES production functions with capital, labor and energy inputs and find significant heterogeneity in substitution elasticities across different industries. Our capital-labor substitution elasticities are much lower than the GTAP values while our energy elasticities are higher. We then incorporate these estimated elasticities into a CGE model to simulate China's carbon pricing policies and compare with the results using GTAP parameters. Our less elastic K-L substitution lead to lower base case GDP growth, but our more elastic energy substitution lead to lower coal use and carbon emissions. In the carbon tax policy exercises, we find that our elasticities lead to easier reductions in coal use and carbon emissions.

Mun Ho, Wolfgang Britz, Ruth Delzeit, Florian Leblanc, Roson Roberto, Franziska Schuenemann, and Matthias Weitzel. 2020. “Modelling consumption and constructing long-term baselines in final demand.” Journal of Global Economic Analysis, 5. Publisher's VersionAbstract
Modelling and projecting consumption, investment and government demand by detailed commodities in CGE models poses many data and methodological challenges. We review the state of knowledge of modelling consumption of commodities (price and income elasticities and demographics), as well as the historical trends that we should be able to explain. We then discuss the current approaches taken in CGE models to project the trends in demand at various levels of commodity disaggregation. We examine the pros and cons of the various approaches to adjust parameters over time or using functions of time and suggest a research agenda to improve modelling and projection. We compare projections out to 2050 using LES, CES and AIDADS functions in the same CGE model to illustrate the size of the differences. In addition, we briefly discuss the allocation of total investment and government demand to individual commodities.
Ran Hao, Tianguang Lu, Qiuwei Wu, Xinyu Chen, and Qian Ai. 2019. “Distributed piecewise approximation economic dispatch for regional power systems under non-ideal communication.” IEEE Access, 7. Publisher's VersionAbstract
Appropriate distributed economic dispatch (DED) strategies are of great importance to manage wide-area controllable generators in wide-area regional power systems. Compared with existing works related to ED, where dispatch algorithms are carried out by a centralized controller, a practical DED scheme is proposed in this paper to achieve the optimal dispatch by appropriately allocating the load to generation units while guaranteeing consensus among incremental costs. The ED problem is decoupled into several parallel sub-problems by the primal-dual principle to address the computational issue of satisfying power balance between the demand and the supply from the distributed regional power system. The feasibility test and an innovative mechanism for unit commitment are then designed to handle extreme operation situations, such as low load level and surplus generation. In the designed mechanism, the on/off status of units is determined in a fully distributed framework, which is solved using the piecewise approximation method and the discrete consensus algorithm. In the algorithm, the push-sum protocol is proposed to increase the system adaptation on the time-varying communication topology. Moreover, consensus gain functions are designed to ensure the performance of the proposed DED under communication noise. Case studies on a standard IEEE 30-bus system demonstrate the effectiveness of our proposed methodology
Richard Goettle, Mun S. Ho, and Peter Wilcoxen. 2020. “Emissions accounting and carbon tax incidence in CGE models: bottom-up versus top-down.” In Measuring Economic Growth and Productivity: Foundations, KLEMS Production Models, and Extensions, edited by Fraumeni, B, 1st ed. Cambridge, MA: Academic Press. Publisher's VersionAbstract
Multi-sector general equilibrium models are the work-horses used to analyze the impact of carbon prices in climate policy discussions. Such models often have distinct industries to represent coal, liquid fuels, and gas production where the output over time is represented by quantity and price indexes. The industries that buy these fuels, however, do not use a common homogenous quantity (e.g., steam coal vs. metallurgical coal) and have distinct purchasing price indexes. In accounting for energy use or CO2 emissions, modelers choose to attach coefficients either bottom-up to a sector specific input index or top-down to an average output index and this choice has a direct bearing on the incidence of carbon taxation. We discuss how different accounting methods for the differences in prices can have a large effect on the simulated impact of carbon prices. We emphasize the importance for modelers to be explicit about their methods.
An edited volume dedicated to Prof. Dale W. Jorgenson by his students and collaborators.  Final Manuscript in DASH
Jing Cao, Mun S. Ho, and Wenhao Hu. 2020. “Analyzing carbon price policies using a general equilibrium model with household energy demand functions.” In Measuring Economic Growth and Productivity: Foundations, KLEMS Production Models, and Extensions, edited by Barbara Fraumeni. Cambridge, MA: Academic Press. Publisher's VersionAbstract

Multi-sector general equilibrium models are used to simulate the effects of environmental policies on industry output and consumption at disaggregated levels. The specification of household demand in such models often use simpler forms such as CES or Linear Expenditure Systems since there are few estimates of more flexible systems. We estimate a 2-stage translog utility function that explicitly accounts for detailed energy expenditures to allow us to capture the price and income effects more accurately than these simpler forms. We incorporate this into a China growth model to simulate the effects of a carbon price to achieve the government targets for the Climate Change (Paris) agreements.

Final Manuscript in DASH.
An edited volume dedicated to Prof. Dale W. Jorgenson by his students and collaborators.

Pages