Research On The Economic Benefits Of Carbon Emissions Reduction In Zhejiang Province

Being an economically developed province which is short of energy resources, ZhejingProvince faces the constraint of a overseas fossil energy market which offers high-priced supplyand a domestic fossil energy market which offers limited supply. In order to formulate andimplement a provincial emissions reduction plan, it is of paramount importance to employ ascientific method to gauge the economic losses and potential revenue resulted form emissionsreduction activities conducted in this province, and to theoretically work out a mechanism that willrealize the potential revenue. In view of this, the present thesis will employ DDF to evaluate theeconomic losses of43different industries under different degree of emissions reductionrespectively, and then discuss the potential revenue realization mechanism of emissions reductionfrom the perspectives of “Carbon Emissions Transfer” and “Home Market Effect”.In terms of economic losses resulted from activities related to carbon emissions reduction, thepresent author comes to the following conclusions: First, the overall economic benefit resultedfrom carbon emissions reduction is negative, the number of which tends to increase with thegrowing degree of carbon emissions reduction. However, the negative economic benefit derivedfrom carbon emissions reduction can be eliminated by ameliorating resource allocation andmanagement approach. Second, the negative economic benefit resulted from carbon emissionsreduction in the tertiary industry is the smallest among all trades, the second smallest beingagriculture, the third being industry, and the largest being architectural industry. Third, the negativeeconomic benefit of the sub-sector on the industry chain is “waterfall-style change”, that is, themore to the industry chain downstream, with the greater negative economic of the intensity ofcarbon emissions reduction. Fourth, the negative economic benefit derived from carbon emissionsreduction is positively correlated to industrial capital per capita and inversely proportioned toindustrial carbon emissions per capital and industrial carbon emissions per output-value.In terms of the potential revenue realization mechanism of carbon emissions reductionactivities, the present author believes that commercial trade and investment will lead to “CarbonEmissions Transfer” and “Home Market Effect” of low-carbon products.“Carbon EmissionsTransfer” refers to the circumstance where regional carbon emissions reduction activities forcethose products on the lower part of the industrial chain to be manufactured in neighboring regionsin order to transfer carbon emissions to neighboring regions and retain those trades on the upperpart of the industrial chain with low-carbon emissions in the local region. By “Home MarketEffect” the present author means that regional carbon emissions reduction will reshape the scale oflow-carbon products market in the local region and outside the local region, and as a result, therelative expansion of home market scale will guide the low-carbon manufacture to gather in thelocal region, and than, export the low-carbon products to outside the local region.“CarbonEmissions Transfer” will upgrade the local industries while “Home Market Effect” will give rise to the gathering of emerging industries. These two means are of great importance to realize thepotential benefit of carbon emissions reduction activities.