General Equilibrium Analysis of the Cobenefits and Trade-Offs of Carbon Mitigation on Local Industrial Water Use and Pollutants Discharge in China

Carbon mitigation strategies have been developed without sufficient consideration of their impacts on the water system. Here, our study evaluates whether carbon mitigation strategies would decrease or increase local industrial water use and water-related pollutants discharge by using a computable general equilibrium (CGE) model coupled with a water withdrawals and pollutants discharge module in Shenzhen, the fourth largest city in China. To fulfill China's Nationally Determined Contributions (NDC) targets, Shenzhen's GDP and welfare losses are projected to be 1.6% and 5.6% in 2030, respectively. The carbon abatement cost will increase from 56 USD/t CO in 2020 to 274 USD/t CO in 2030. The results reveal that carbon mitigation accelerates local industrial structure upgrading by restricting carbon-, energy-, and water-intensive industries, e.g., natural gas mining, nonmetal, agriculture, food production, and textile sectors. Accordingly, carbon mitigation improves energy use efficiency and decreases 55% of primary energy use in 2030. Meanwhile, it reduces 4% of total industrial water use and 2.2-2.4% of two major pollutants discharge, i.e., COD and NH-N. Carbon mitigation can also decrease petroleum (2.2%) and V-ArOH (0.8%) discharge but has negative impacts on most heavy metal(loid)s pollutants discharge (increased by -0.01% to 4.6%). These negative impacts are evaluated to be negligible on the environment. This study highlights the importance of considering the energy-water nexus for better-coordinated energy and water resources management at local and national levels.