Abstract for: A Model of Energy Policy Impacts on Pollutant Emissions, Costs, and Social Benefits Developed for China’s Central Government

Energy Innovation LLC has worked with China’s central government to develop a System Dynamics model to assist in selecting policies that will allow China to achieve its emissions reduction goals. The model simulates years 2013-2030 and covers the Transportation, Electricity Supply, Buildings, and Industry sectors. It also handles District Heating and Carbon Capture and Sequestration. The effects of 35 energy policies, as well as increased technical progress through research and development (R&D), may be investigated in any combination. Numerous outputs are available, including: emissions of nine different pollutants; cash flow changes for government, industry, and consumers; monetized social benefits from avoided public health and climate damages; usage of nine fuels as well as electricity and heat; and the mix of power sources. A Python script can be used to identify optimized policy packages. Quantitative results are described in the paper. Some qualitative conclusions: No single policy or technology is a silver bullet; the greatest emissions reductions at lowest cost are achieved via packages incorporating many policies that support a diverse set of technologies. It is possible for China to peak its carbon emissions in the early 2020s while achieving a net reduction in direct monetary outlays.