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ID:
143409
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Summary/Abstract |
This paper is devoted to examine the effect of globalization, particularly the international technology diffusion (ITD), on China's domestic carbon savings. Building on a multi-region global modeling framework, we explicitly consider both indigenous R&D and foreign technology diffusion as the dual drivers of endogenous technical change (ETC) for domestic carbon savings. Simulation results show that 1) traditional economic globalization policies like trade and FDI liberalization can boost the growth of production output, but this is at the cost of more fossil energy uses and carbon emissions; 2) technology globalization policies like removals of technology transfer barriers can facilitate the inflows of foreign technologies for domestic carbon savings; and 3) domestic emission control policies have an effect to induce restructuring and reorganization of production technology into a knowledge-intensive one and thus help lower climate compliance costs. Consequently, to create China's domestic carbon savings from globalization, policy should focus on promoting cross-country technology diffusion, beyond traditional cross-border transactions of product and capital goods. Domestic emission-based climate regulation should also be implemented to create market demand for carbon-efficient technologies and thus induce inflows of foreign advanced technologies.
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2 |
ID:
115691
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Publication |
2012.
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Summary/Abstract |
This paper examines the effectiveness of China's indigenous R&D and technological innovation to curb its carbon emissions. The mechanism of endogenous technical change (TC) is incorporated an intertemporal computable general equilibrium (CGE) model. R&D investments and knowledge creations are modeled as the endogenous behaviors of private firms. The accumulated stocks of knowledge are applied in the production process to affect the rate and bias of TC. Simulation results show that: (1) while China's indigenous R&D efforts play a significant role to curb carbon emissions, sole dependence on R&D may be far from sufficient to achieve pledged climate target, with complementary policies being required to reinforce existing climate actions; (2) innovation policies can strengthen R&D investment and cut emissions further, but the complementary effect is relatively minor; (3) carbon taxation can generate significant carbon-saving benefits and fulfill climate target, but this achievement is at the cost of economic losses. The induced technical improvement, however, can partially mitigate the deadweight loss incurred by carbon tax distortion.
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