Work-in-progress by the World Bank and the Government of China examined the evidence in favour of a greener growth path for China over the next two decades.

The starting point is an assessment of the current costs of environmental degradation in China, roughly 9% of GDP in 2009. International comparisons of energy and carbon efficiency show that China is lagging, with major consequences for its resource import dependence and public health impacts. General equilibrium simulations of China’s growth to 2030 suggest that modest prices for carbon, in the range of $10-$20 per ton CO2, could quickly flatten its emissions path, reduce coal dependence and generate revenues in excess of 2% of GDP.

China has significant advantages in responding to these resource and environmental challenges, including its ability to respond at scale and with high speed, building on the dynamism of its economy. But it also faces many constraints, including a still-incomplete transition to a market economy.

Speaker: Kirk Hamilton, Research Department, The World Bank

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