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The effect of carbon tax on carbon emission abatement and GDP: a case study

Author

Listed:
  • Xiao Liu

    (The Chinese University of Hong Kong
    HuNan Academy of Social Sciences)

  • Yee Leung

    (The Chinese University of Hong Kong)

  • Yuan Xu

    (The Chinese University of Hong Kong)

  • Linda Chor Wing Yung

    (The Chinese University of Hong Kong)

Abstract

Carbon tax has been advocated as an effective economic instrument for the abatement of CO2 emission by various countries, including China, the world’s biggest carbon emission country. However, carbon emission abatement cannot be done while ignoring the impact on economic growth. A delicate balance needs to be achieved between the two to find an appropriate pathway for sustainable development. This paper applies a multi-objective optimization approach to analyze the impact of levying carbon tax on the energy-intensive sectors of Guangdong province in China under the constraint of emission reduction target. This approach allows us to evaluate carbon emission minimization while maximizing GDP. For policy analysis, we construct five scenarios for evaluation and optimal choice. The results of the analysis show that a lower initial carbon tax rate is not necessarily better, and that a carbon tax is an effective means to reduce CO2 emissions while maintaining a certain level of GDP growth.

Suggested Citation

  • Xiao Liu & Yee Leung & Yuan Xu & Linda Chor Wing Yung, 2017. "The effect of carbon tax on carbon emission abatement and GDP: a case study," Journal of Geographical Systems, Springer, vol. 19(4), pages 399-414, October.
    • Handle: RePEc:kap:jgeosy:v:19:y:2017:i:4:d:10.1007_s10109-017-0254-1
    DOI: 10.1007/s10109-017-0254-1
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    References listed on IDEAS

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    Cited by:

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    2. Nan Li & Beibei Shi & Rong Kang, 2021. "Information Disclosure, Coal Withdrawal and Carbon Emissions Reductions: A Policy Test Based on China’s Environmental Information Disclosure," Sustainability, MDPI, vol. 13(17), pages 1-24, August.
    3. Chen, Qian & Zha, Donglan & Salman, Muhammad, 2022. "The influence of carbon tax on CO2 rebound effect and welfare in Chinese households," Energy Policy, Elsevier, vol. 168(C).
    4. Yu, Ping, 2020. "Carbon tax/subsidy policy choice and its effects in the presence of interest groups," Energy Policy, Elsevier, vol. 147(C).

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    More about this item

    Keywords

    Carbon tax; CO2 emission; Industrial sector; Multi-objective optimization;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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