Research On Carbon Dioxide Abatement Cost Of Industrial Sector In China

China's carbon emissions exceeded the United States'in 2007. As a responsible big country, it's a duty to carry out carbon dioxide emissions reduction. However, the implementation of carbon dioxide emissions reduction will be an outflow of economic resources to a certain extent, making the economic growth rate slowed down. How to reconcile the contradiction between carbon dioxide emissions and economic development is the main problem facing our country at this stage. The measurement of abatement costs of emission reductions will help determine the key provinces and industries to reduce the negative impact of emissions on the economy, and thus scientific basis will be provided to solve the contradiction between carbon dioxide emissions and economic development.Firstly, the paper estimates the shadow price of carbon dioxide of 24 industrial sectors in 29 provinces of China by the use of parametric and nonparametric methods based on directional distance function. The results obtained are not the same completely but basically have the same trend, and this paper focuses on non-parameter results as basis analysis. It is found that the marginal costs of reducing emissions of carbon dioxide in different industries have large differences in the shadow prices, whose range is between -0.2 thousand yuan/ton and -120.3 thousand yuan/ton. On average, the heavy chemical industries have smaller marginal abatement costs, while light industries are exactly the opposite.Secondly, based on the measurement of carbon dioxide marginal abatement costs, this paper further studies its impact factors. It is found that improvement of technical level, the degree of foreign trade and energy efficiency can increase the marginal abatement cost, but the increase of energy consumption, the scale of carbon dioxide emissions, the scale of economic output, and the market-oriented degree, would reduce the marginal abatement costs.Finally, the paper estimates the responsibilities of reduction targets of different industries in different regions by the use of cost-minimizing emission reduction target decomposition model, which is under the target of the least total cost. The result shows that, heavy chemical industries and the provinces in which these industries concentrate should take more responsibilities for emission reductions.What the conclusion contains the policy implications is, different industries in different regions should be treated differently when make emission reduction policies, and also consider the various factors affecting the reduction cost.