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<p>Although both climate policy and urbanization influence urban–rural inequality (URI), few researchers have explored their potential interactive impacts on URI. This paper aims to fill this research gap by examining the interrelations among climate policy, urbanization, and URI, taking China as a case study. To achieve this aim, we have developed a dynamic recursive Computable General Equilibrium (CGE) model, named the China Energy, Economy, and Demography (CEED) 2.0 model. Our model results indicate that the projected urbanization in China positively affects emissions and GDP. In the short term, the urbanization exacerbates intra-group inequality within both urban and rural areas, but it reduces intra-group inequality in the long term. The urbanization decreases inter-group inequality and overall inequality. The emission trading scheme (ETS) amplifies the negative urbanization impact on inequality. While the ETS reduces emissions and promotes GDP growth in the long term, it also diminishes urban–rural income inequality. The urbanization strengthens the ETS effects on emissions, GDP, and income inequality. The ETS decreases urban–rural consumption inequality in the short term but increases consumption inequality in the long term, with the urbanization further reinforcing this ETS effect. These findings suggest that both climate policy and urbanization contribute to reducing urban–rural income inequality, with urbanization enhancing the effect of climate policy and vice versa. Climate policy ultimately exacerbates urban–rural consumption inequality, and this effect is further intensified by urbanization.</p>

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Climate policy, urbanization, and urban–rural inequality: a case study in China

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2025年7月23日

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  • Shuyang Chen,
  • Yuan Liu,
  • Fenfen Wang

摘要

Although both climate policy and urbanization influence urban–rural inequality (URI), few researchers have explored their potential interactive impacts on URI. This paper aims to fill this research gap by examining the interrelations among climate policy, urbanization, and URI, taking China as a case study. To achieve this aim, we have developed a dynamic recursive Computable General Equilibrium (CGE) model, named the China Energy, Economy, and Demography (CEED) 2.0 model. Our model results indicate that the projected urbanization in China positively affects emissions and GDP. In the short term, the urbanization exacerbates intra-group inequality within both urban and rural areas, but it reduces intra-group inequality in the long term. The urbanization decreases inter-group inequality and overall inequality. The emission trading scheme (ETS) amplifies the negative urbanization impact on inequality. While the ETS reduces emissions and promotes GDP growth in the long term, it also diminishes urban–rural income inequality. The urbanization strengthens the ETS effects on emissions, GDP, and income inequality. The ETS decreases urban–rural consumption inequality in the short term but increases consumption inequality in the long term, with the urbanization further reinforcing this ETS effect. These findings suggest that both climate policy and urbanization contribute to reducing urban–rural income inequality, with urbanization enhancing the effect of climate policy and vice versa. Climate policy ultimately exacerbates urban–rural consumption inequality, and this effect is further intensified by urbanization.