Global warming: Contribution by and impacts on China--An application of the DICE model

Scope and method of study. The purpose of this study is to assess China's role in generating global warming and to estimate the impacts on China of global climate changes. The DICE-CHN model used in this study is a modified version of the DICE model developed by Nordhaus. With the behavior of the rest of the world exogenously given, DICE-CHN seeks to maximize China's utility subject to economic and climatic constraints.;Findings and conclusions. The results from DICE-CHN indicate that either China or the rest of the world alone are large enough sources of Greenhouse Gases (GHGs) to cause global climate changes. From the perspective of maximizing China's utility, it is not feasible to limit world total emissions to a certain level, e.g., the 1990 level, 80 percent of the 1990 level, or the 1995 level. Given the behavior of the rest of the world, it is optimal for China to reduce its own GHG emissions unless the rest of the world cuts back its emissions at an unrealistically aggressive rate. Assuming the rest of the world reduces its emissions by 20 percent relative to its uncontrolled level, China's income losses in the no-emissions reduction case would be greater than in the case where China follows its optimal emissions reduction path. One best way China could reduce its GHG emissions could be to slow its rate of economic growth. A slower growth rate would ease the pressure of high energy demand and reduce emissions from coal consumption. Slower economic growth would also help lessen other environmental problems and reduce shortages in grain supply. Continuous success in population control is also critical. The sensitivity analysis shows that the model results from DICE-CHN are sensitive to values of key parameters. Further research is needed to estimate the values of these parameters and to evaluate a full range of policy options.