The environmental co-benefit and economic impact of China's low-carbon pathways: Evidence from linking bottom-up and top-down models

Abstract Deep decarbonization pathways (DDPs) can be cost-effective for carbon mitigation, but they also have environmental co-benefits and economic impacts that cannot be ignored. Despite many empirical studies on the co-benefits of NDCs at the national or sectoral level, there is lack of integrated assessment on DDPs for their energy, economic, and environmental impact. This is due to the limitations of bottom-up and top-down models when used alone. This paper aims to fill this gap and link the bottom-up MAPLE model with a top-down CGE model to evaluate China's DDPs' comprehensive impacts. First, results show that carbon dioxide emissions can be observed to peak in or before 2030, and non-fossil energy consumption in 2030 is around 27%, which is well above the NDC target of 20%. Second, significant environmental co-benefits can be expected: 7.1 million tons of SO2, 3.96 million tons of NOx, and 1.02 million tons of PM2.5 will be reduced in the DDP scenario compared to the reference scenario. The health co-benefits demonstrated with the model-linking approach is around 678 billion RMB, and we observe that the linked model results are more in accordance with the conclusions of existing studies. Third, after linking, we find the real GDP loss from deep decarbonization is reduced from 0.92% to 0.54% in 2030. If the environmental co-benefits are considered, the GDP loss is further offset by 0.39%. The primary innovation of this study is to give a full picture of DDPs' impact, considering both environmental co-benefits and economic losses. We aim to provide positive evidence that developing countries can achieve targets higher than stated in the NDCs through DDP efforts, which will have clear environmental co-benefits to offset the economic losses.