How can China achieve its goal of peaking carbon emissions at minimal cost? A research perspective from shadow price and optimal allocation of carbon emissions.

The Chinese government has declared a determination at the 75th United Nations General Assembly that China will improve its independent contribution and adopt more powerful measures to peak the carbon emissions before 2030. However, such strict implementation of carbon reduction policies is bound to bring the cost of sacrificing economic development. In such a context, this paper tries to use shadow price to measure the average social cost of emission reduction, marginal abatement cost to depict the pressure to reduce carbon emissions based on non-radial distance function, and provides an optimal scheme for provincial emission reduction to minimize the national cost of emission reduction based on variable-coefficient model.