The application of a hybrid energy-economy model to a key developing country – China

Energy security, local air pollution and GHG emissions are three key challenges facing China's decision-makers. In this study, we first applied CIMS, a hybrid (bottom-up/top-down) energy-economy model, to test how different policy packages could be designed to alleviate China's energy and environment challenges. Secondly, we compared the marginal abatement cost curve of this study with those of other analysts, and found that modeling methodology differences had significant impacts on cost estimates of GHG emission abatement. Finally, we derived the long-run autonomous energy efficiency indices (AEEIs) and elasticity of substitution (ESUB) values for China, and found that the aggregate Chinese AEEIs are somewhere between top-down and bottom-up estimates in the literature. Moreover, because the simulated ESUBs and AEEIs differ from one sector to another, this suggests that aggregated models with economy-wide values for these parameters may be unhelpful to policy-makers seeking to explore the effects of structural evolution on energy demand and emissions.