China is in the process of becoming the fourth main global player in t
he world economy, together with the US, the EU, and Japan. Due to an e
nergy mix with 75% dependence on coal, a high energy intensity and low
energy prices, it is, after the US, the world's second largest emitte
r of CO2. China's recoverable fossil fuel reserves have a CO2 emission
potential of some 225 Ct (the current global CO2 emission is about 22
Gt/yr). Under a business-as-usual (BAU) scenario, all of it would be
released to the atmosphere by 2040. This emission may cause a signific
ant disruption of the climate system, resulting in severe adverse clim
atic and ecological impacts on China and the world. To avoid this outc
ome, an equitable climate-protection strategy is introduced to explore
an alternative energy/climate future. Using a macroeconomic approach,
it is shown that under BAU conditions, the year 2100 emissions of CO2
will increase above 1990 levels by 370 and 96% for China and the US,
respectively. In contrast, for the climate-protection conditions requi
red by the Climate Convention, CO2 emissions must decrease by 36% for
China and by 90% for the US below 1990 levels. Using a microeconomic-e
ngineering approach, the total CO2 reduction potential is found to be
about 3600 Mt for 13 specific measures over a 10-yr period. The increm
ental costs range from US$ 0.09 to 18.55 per ton of CO2 reduction for
coal-saving stoves and solar cookers, respectively. The total reductio
n costs for China would be about US$ 2 billion per year or similar to
0.4% of the 1994 GDP of China. This estimate does not allow for benefi
ts from saved resources and avoided damages. We conclude with a discus
sion of various avenues for obtaining needed technological and financi
al support for China. (C) 1998 Elsevier Science Ltd. All rights reserv
ed.