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.