Energy structure upgrade and carbon emission reduction: evidence from Asian economies

The reduction of carbon emissions has become an important climate issue worldwide. However, the diversity of carbon trading systems and the differentiation policy may generate incomparable carbon abatement costs across regions and countries. Based on the nonparametric model, this paper investigates the shadow price of carbon emissions and energy structure in 38 Asian countries from 1991 to 2019. The main findings of this paper are as follows: (1) The annual average shadow price of carbon emissions experienced a fluctuating decline for Asian countries during the period 1991-2000, followed by a continuous rise and then a fluctuating decline. (2) Industrialization may lead to a decline in carbon shadow price, while urbanization may lead to a rise in the opportunity cost of carbon reduction. (3) The carbon shadow price in countries of Asia-Pacific Economic Cooperation (APEC) is lower than that in non-APEC countries. (4) The structure of energy consumption is negatively related to marginal abatement costs, while on the contrary, the coefficients of the level of human resources are significantly positive. We also derive corresponding policy measures to promote intra-regional emission reduction.