【Title】：　　The Marginal Abatement Cost of Carbon Emissions in China 

【Speaker】： Dr. Chun Bo Ma(University of Western Australia)

【Time】：　 2：00 pm, Dec. 13, 2014.

【Location】：CEEP-BIT，6th Floor

【About Report】：

　　There is an emerging literature estimating the marginal cost of carbon mitigation in China using a distance function approach; however, empirical estimates vary widely in the magnitude and variation, which undermines support for policies to curb carbon emission. Applying three commonly used distance functions to China’s provincial data for a 10-year period from 2001 to 2010, we show that the variability can be partially explained by the difference in the input/output coverage and whether the estimated marginal abatement cost (MAC) is conditional or unconditional. We also argue that the substantial heterogeneity relates to the economic interpretation that radial measures reflect the short-run MACs while non-radial measures reflect the long-run MACs. We estimated a mean short-run MAC of 20 US$ for carbon which is very close to the carbon prices observed in China’s recently launched pilot markets.