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Does a Recycling Carbon Tax with Technological Progress in Clean Electricity Drive the Green Economy?

Author

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  • Weijiang Liu

    (Center for Quantitative Economics, Jilin University, Changchun 130012, China
    Business School, Jilin University, Changchun 130012, China)

  • Min Liu

    (Business School, Jilin University, Changchun 130012, China)

  • Tingting Liu

    (Business School, Jilin University, Changchun 130012, China)

  • Yangyang Li

    (Business School, Jilin University, Changchun 130012, China)

  • Yizhe Hao

    (Business School, Jilin University, Changchun 130012, China)

Abstract

The environmental issue is a significant challenge that China faces in leading the development of the green economy. In this context, reducing CO 2 emissions is the key to combatting this problem. Taking the 2017 social accounting matrix (SAM) as the database and combing macroeconomic parameters from previous studies, this article constructed the environmentally computable general equilibrium (CGE) model as an analytical model to analyze the economic–environmental–energy impacts of recycling carbon tax with technological progress in clean electricity. We found that when the rate of clean electricity technological progress reaches 10%, the carbon recycling tax that reduces corporate income taxes will achieve a triple dividend of the carbon tax, namely, promoting economic development, reducing carbon emissions, and improving social welfare. In the meantime, on the basis of carbon tax policies that raise the price of fossil energy, clean electricity technological progress will help accelerate the transformation of electricity structure, reduce the proportion of thermal power generation, and better promote emission reduction. In addition, due to the high carbon emission coefficient, coal contributes significantly to carbon emission reduction. Therefore, China should implement a carbon tax recycling policy supplemented by the progress of clean power technology as soon as possible to better promote green economy development.

Suggested Citation

  • Weijiang Liu & Min Liu & Tingting Liu & Yangyang Li & Yizhe Hao, 2022. "Does a Recycling Carbon Tax with Technological Progress in Clean Electricity Drive the Green Economy?," IJERPH, MDPI, vol. 19(3), pages 1-18, February.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:3:p:1708-:d:740700
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    2. Mardones, Cristian, 2023. "Economic and environmental effects of financing subsidies for non-conventional renewable energies with a carbon tax – A comparison of intersectoral models," Renewable Energy, Elsevier, vol. 217(C).

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