We compare the effectiveness of absolute vs. intensity targets in preparing China for progressive climate action under the Paris Agreement. The Agreement requires countries to submit nationally determined contributions (NDCs) every five years and in addition calls for submission long-term low greenhouse gas emission development strategies up to 2050. This study conducts a multi-criteria comparison of the adoption of an absolute vs. an intensity interim target in 2030, followed by an absolute target in 2050, for China. In doing so, we explicitly consider economic growth uncertainty as it is the main motivation behind China's and other developing countries' adoption of intensity targets for 2030. We perform the target comparison analytically, as well as using the stochastic version of a large-scale integrated assessment model. The stochastic model is based on expected utility theory and explicitly accounts for uncertainty.
Key policy insights:• If China wants to hedge against higher than expected economic growth, it is reasonable to adopt an intensity target. However, in case of lower economic growth, this choice becomes problematic as policy costs will rise while the economy grows slow• The difference in costs due to the 2030 target choice can be of the same order of magnitude as the overall climate policy costs themselves • An interim absolute target performs better than an equivalent intensity target, under multiple criteria