Developing a cost effective response to climate change for China

Monash University’s Centre of Policy Studies (CoPS) modelling is helping to develop cost-effective market mechanisms for carbon mitigation in China.

The China State Information Centre (SIC) is working collaboratively with Monash researchers to design and evaluate policy options for trading and pricing for carbon emission mitigation in China.

Using best-practice qualitative economic analysis and quantitative analysis, or modelling, designed by CoPS researchers, the project will assist the National Development and Reform Committee (NDRC) in Beijing to develop a carbon trading system framework by 2015 for national implementation.

As part of the collaboration between CoPS and SIC, four researchers from SIC are currently visiting the Centre at the Clayton campus to review the modelling that is being used. 

The project will draw on a range of climate change, economic, quantitative, energy, and low carbon technology expertise within China. It will also be assisted by leading researchers from the Garnaut Climate Change Review.

It will involve an exchange of policy design scenarios, design and modelling consulting, economic research and institutional analysis, design support to an NDRC-authorised carbon trading pilot program, and finalisation of an analytical policy options carbon market study for the pilot city and national government.

Director of CoPS Professor Philip Adams said that the new carbon trading and pricing system was aimed at developing a cost effective response to climate change using market-based measures.

“The ultimate aim of this collaborative research is the implementation of polices that will see the transition of China to a more energy-efficient, low-carbon economy,” Professor Adams said.

Assistant Director-General of Department of Economic Forecasting at SIC, Yaxiong Zhang, said the research was critically important to developing an emissions trading scheme that would promote low-carbon development in China.

“This pioneering research will allow us to develop inter-regional policies for carbon mitigation that can be implemented across China,” Assistant Director-General Zhang said.

“Our visit to Monash has allowed us to further understand the modelling we will be using to develop policy recommendations.”

The policy end-users of the study will be the China NDRC, its Department of Climate Change and related agencies, as well as new NDRC-designated carbon trading pilot provinces and cities.

Australian funding for the project is provided by the Australian Department of Climate Change and Energy Efficiency.