Exploring the impact of determining factors behind CO₂ emissions in China: A CGE appraisal

Along with the arrival of the post-Kyoto Protocol era, the Chinese government faces ever greater pressure to reduce greenhouse gases (GHGs). Hence, this paper aims to discuss the drivers of carbon dioxide (CO₂) emissions and their impact on society as a whole. First, we analyzed the background and overall situations of CO₂ emissions in China. Then, we reviewed previous studies to explore the determinants behind China's CO₂ emissions. It is widely acknowledged that energy efficiency, energy mix, and economy structure are three key factors contributing to CO₂ emissions. To explore the impacts of those three factors on the economy and CO₂ emissions, we established a computable general equilibrium (CGE) model. The following results were found: (1) The decline of a secondary industry can cause an emission reduction effect, but this is at the expense of the gross domestic product (GDP), whereas the development of a tertiary industry can boost the economy and help to reduce CO₂ emissions. (2) Cutting coal consumption can contribute significantly to emission reduction, which is accompanied by a great loss in the whole economy. (3) Although the energy efficiency improvement plays a positive role in promoting economic development, a backfire effect can weaken the effects of emission reduction and energy savings.