Breaking down nationally determined contribution (NDC) targets into subnational actions: a two-staged allocation approach study in China

Subnational climate actors are expected to play an increasingly important role in climate actions. However, a trade-off between equity and efficiency emerges when nationally determined contributions (NDCs) are distributed into subnational actions. In this study, we propose a two-staged carbon quota allocation method, with an equity-based 1st-stage allocation mechanism wherein provincial carbon reduction efforts are shared equally and an efficiency-based 2nd-stage allocation mechanism to maximize input–output efficiency. Using China as a case study, we convert China’s NDC carbon intensity reduction target into a total emissions cap and apply the allocation method to show that the 2nd-stage allocation significantly increases the total provincial carbon emission efficiency without seriously compromising equity. As the allocation method changes from equity-based to efficiency-based, the carbon quotas mainly flow out from provinces with small emissions and high energy intensity to provinces with large emissions and low energy intensity. The two-staged carbon quota allocation method effectively considers the equity and efficiency principles, which can reduce resistance to the implementation of national NDCs. Generally, the approach has promising application potential for countries to break down the NDC into subnational shares.