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Macroeconomic Risks Of Carbon Emission Constraints

Author

Listed:
  • Yuzhe Huang

    (Shantou University, Shantou, Guangdong, China)

  • Changchun Pan

    (Jilin University, Changchun, Jilin, China)

Abstract

Green and low-carbon transformation is an inevitable trend for protecting the climate and ecology while achieving stable economic development. To actively and prudently achieve carbon emission targets, the government will further implement robust policy measures to support the development of a green and low-carbon economy. However, there are risks associated with the implementation strength and frequency of future carbon emission constraint policies, which could impact different market economic entities and cause macroeconomic fluctuations. This paper analyzes the transmission mechanism of the risks associated with carbon emission constraint policies, and examines their impact on the macroeconomy. We find that the risks associated with carbon emission constraint policies can inhibit investment and financing at the capital level, and cause output decline and deflation at the production level.

Suggested Citation

  • Yuzhe Huang & Changchun Pan, 2024. "Macroeconomic Risks Of Carbon Emission Constraints," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 27(4), pages 721-740, December.
    • Handle: RePEc:idn:journl:v:27:y:2024:i:4g:p:721-740
    DOI: https://doi.org/10.59091/2460-9196.2413
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    More about this item

    Keywords

    Carbon emission constraints; Policy risks; Output;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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