About INTEGRATE

The project consortium consists of seven Sino-German research partners and is being jointly funded by the German Federal Ministry of Education and Research (BMBF) and the Ministry of Science and Technology of the People's Republic of China (MOST). Building on years of joint research, the project partners bring together Sino-German research capacity to analyze the link between global climate protection and local air quality for China and Germany (the EU). Thereby, INTEGRATE represents an excellent opportunity for mutual learning and strengthens the transfer of knowledge between the two countries. INTEGRATE strives to answer the following core research questions taking both the Chinese and the European context into account:

1. What are the quantified synergies of climate protection and local air quality?

2. What is the optimal mix of policy measures to achieve both goals?

3. What is the effect of international trade on the environment?

4. What are the behavioral responses of consumers to certain policy measures and interventions?

5. What are sustainable energy transition pathways addressing both local air pollution and climate change?

These questions are addressed in five intertwined work packages (WP) which are carried out in close cooperation and interaction between Chinese and German project partners.

• WP1: Energy transition pathways for China and Germany in the global context

Global energy systems need to undergo an almost full-scale decarbonization until mid-century to keep the Paris targets within reach. As part of their nationally determined contributions, China and Germany, within the European context, have pledged emissions targets for 2030 and plan a rapid expansion of non-fossil electricity production capacity, most importantly renewable energy supply. To reach the much deeper reductions required by mid-century, the system transformation also needs to encompass the transportation, buildings and industry sector. China and Germany face very similar challenges in that endeavor: How can power systems cope with an increasing share of variable and uncertain renewable supply? How can efficiency potentials be realized to reduce overall energy consumption while enabling growth and prosperity? How can energy demands for fuels be switched to renewable electricity sources?

There is a great potential for mutual learning and synergies in addressing these challenges. The dynamic growth and the spectacular technological progress in wind and solar technologies as well as electric vehicles also points to a large potential for new green business opportunities. Against this background, the overarching goal of this WP is to analyze scenarios of future transformation pathways for Germany, Europe and China. Two complementing tools will contribute to the energy-economic modelling: 1) the global energy-economy-climate model REMIND, and 2) the more-detailed energy-economic model of China called PECE.

• WP2: Integrated assessment of the synergies of GHG emission mitigation and air pollution control

Since the energy sector not only emits the most greenhouse gases (GHG) but also air pollutants, the projected decarbonization of this sector yields significant mitigation potential for air pollution as a welcomed co-benefit. However, quantifying the impacts of specific policies unlocking such co-benefits requires an integrated approach to take into account regional disparities in terms of resource endowment, demographic features, development divergence and environmental carrying capacity. Further, climate and air pollution concerns both interact synergetically in many policy initiatives in China and Europe, and given their economic significance, these policies have global impacts. Regional analyses therefore should be complemented by embedding them into the global context to identify repercussions on the global markets.

We therefore couple state of the art models along the cause effect chain of air pollution health impacts to explore the synergies of GHG emission mitigation and air pollution control. This will give insights, in 1) synergies under different climate mitigation scenarios in terms of avoided health impacts and their valuation, 2) smart policy designs to optimally exploit these synergies, 3) the performance of policies on a wide array of measurements such as the economic efficiency, policy effectiveness and equity, and finally 4) global repercussions of national policies. The model based integrated assessments will be applied to both China and Germany to benefit from the expertise of both modeling teams.

• WP3: Firm behavior concerning climate change protection and local air pollution

This WP investigates the links between firm activity, climate change, and local air pollution. Due to the increased integration of economic activity in a globalized world, firms gain a larger margin of reconfiguring production processes which gives rise to two effects. First, the location of final goods production changes. Second, the regional structure of value chains, that is all productions steps leading the final good, adjusts.

In general, the international reallocation of economic activities increases efficiency. Income rises and without taking externalities into account, this would be welfare enhancing. However, production is characterized by a number of negative externalities, such as greenhouse gas emissions and air pollution. In light of these negative externalities, the overall effect of the reconfiguration of global value chains on welfare and the environment is unclear. In particular, existing literature is inconclusive on the quantitative effects of adjusting the global production process on greenhouse gas emissions and air pollution and how the interrelation between the pollutants is affected. Therefore, the aim of this WP is to gain deeper insight in the simultaneous effects of the globalization of economic activity on greenhouse gases and local air pollution. To this end, this WP analyzes newly generated and updated data bases, simulates and empirically studies firm behavior when those externalities jointly occur and finally gives informed policy advice.

• WP4: Consumer behavior concerning climate change protection and local air pollution

To foster green transition pathways on the demand side, possible policy instruments range from command-and-control measures over market-based instruments to softer interventions. The effectiveness of a certain policy instrument thereby crucially depends on the behavioral responses it provokes on the consumer side. These behavioral responses do not only refer to the induced adoption rates of green technologies or services but also to potential shifts in consumption habits, which might be subject to potential unintended or even confounding reactions. Consequently, a rigorous evaluation of policy instruments needs to tackle the different, possibly integrated and potentially overlaying behavioral channels. This particularly attributes to potential differences in the effectiveness of different interventions in China and Germany and their relationship to the respective culture.

This WP contributes to this aim by the following means. First, we study behavioral reactions to the promotion of sustainable mobility services as one of the key emitters of carbon emissions and local air pollutants with an (quasi-)experimental approach. We then dive deeper into the underlying behavioral channels, which provoke consumers’ reaction from a certain policy instrument or incentive scheme, by applying lab- and/or framed-field experiments. Third, we mirror these insights against the acceptability of different policy instruments among decision makers with a focus on burden sharing issues. Finally, we estimate the willingness to pay for global and local public goods such as climate protection or improvements of local air pollution levels.

• WP5: Integration, Dissemination, Management

INTEGRATE aims at fostering the dialogue between researchers and relevant stakeholders in international climate policy at all major stages of the project. This includes both an extensive communication of the results within the scientific community and within the public. A “Synthesis Document” will be developed, along with other dissemination formats that allow not only stakeholders but also citizens and the community at large to gain easily accessible information about the projects main findings. The dissemination of the results within the scientific community will be reached by presentations on national and international workshops and conferences and, finally, by publications in peer-reviewed journals. The management structure and procedures of the project will be set up in this WP under the guiding management principles of efficiency, transparency, effectiveness and compliance, fostering cooperation and mutual learning.