CHINA'S TARGET RESPONSIBILITY SYSTEM AND CONVERGENCE OF CO2 EMISSIONS

China has established and assigned target responsibilities for local officials in energy conservation and created an evaluation indicator, which is a key institutional arrangement that provides local officials with political incentives to promote carbon abatement policies. In this paper, we elaborate on the relationship between China's target responsibility system and CO2 emissions using interprovincial panel data, grouping provinces into Eastern, Central and Western regions to compare China's CO2 emissions convergence between the periods of the 10th Five-year Plan and the 11th Five-year Plan. The analysis indicates that the target responsibility system does not noticeably change local officials' political incentives to engage in carbon abatement because the effect of the target responsibility system for energy conservation seems to be overshadowed by and subject to gross domestic product (GDP) growth targets. Against the backdrop of growing international pressure on climate change issues, this paper argues that China must include in the target responsibility system an indicator of absolute CO2 emissions reduction as a policy objective.