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The Emissions Reduction Effect And Economic Impact Of An Energy Tax Vs. A Carbon Tax In China: A Dynamic Cge Model Analysis

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  • LELE ZOU

    (Institute of Policy and Management, Chinese Academy of Sciences, China)

  • JINJUN XUE

    (Graduate School of Economics, Nagoya University, Japan3Hubei University of Economics, China)

  • ALAN FOX

    (United States International Trade Commission (USITC), USA)

  • BO MENG

    (Institute of Developing Economics, Japan External Trade Organization (IDE-JETRO), Japan)

Abstract

Carbon tax and energy tax are among the hot discussions in China. This study conducts simulation studies on them with a CGE model and analyzes their economic impacts, especially on the energy-intensive sectors. The Chinese economy is affected at an acceptable level by the two taxes in different scenarios. The import and export of energy-intensive industries are changed, leading to improved domestic competitiveness. Compared with implementing a single tax, a combined carbon-energy tax reduces more emissions with relatively smaller economic costs. For China, the sooner such taxes are launched, the smaller the economic costs and the more significant emission reductions.

Suggested Citation

  • Lele Zou & Jinjun Xue & Alan Fox & Bo Meng, 2018. "The Emissions Reduction Effect And Economic Impact Of An Energy Tax Vs. A Carbon Tax In China: A Dynamic Cge Model Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(02), pages 339-387, March.
    • Handle: RePEc:wsi:serxxx:v:63:y:2018:i:02:n:s021759081740015x
    DOI: 10.1142/S021759081740015X
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    Cited by:

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    2. Li, Meng & Gao, Yuning & Meng, Bo & Yang, Zhusong, 2021. "Managing the mitigation: Analysis of the effectiveness of target-based policies on China's provincial carbon emission and transfer," Energy Policy, Elsevier, vol. 151(C).
    3. Shuai Shi & Yu Jing & Cuixia Li, 2019. "Mitigation Effect of Carbon Emission Tax in Dairy Farming: An Empirical Study of Heilongjiang Province in China," Sustainability, MDPI, vol. 11(2), pages 1-16, January.
    4. Meng, Bo & Liu, Yu & Andrew, Robbie & Zhou, Meifang & Hubacek, Klaus & Xue, Jinjun & Peters, Glen & Gao, Yuning, 2018. "More than half of China’s CO2 emissions are from micro, small and medium-sized enterprises," Applied Energy, Elsevier, vol. 230(C), pages 712-725.
    5. Boqiang Lin & Zhijie Jia, 2020. "Supply control vs. demand control: why is resource tax more effective than carbon tax in reducing emissions?," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-13, December.
    6. Cao, Jing & Dai, Hancheng & Li, Shantong & Guo, Chaoyi & Ho, Mun & Cai, Wenjia & He, Jianwu & Huang, Hai & Li, Jifeng & Liu, Yu & Qian, Haoqi & Wang, Can & Wu, Libo & Zhang, Xiliang, 2021. "The general equilibrium impacts of carbon tax policy in China: A multi-model comparison," Energy Economics, Elsevier, vol. 99(C).

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    More about this item

    Keywords

    Energy tax; carbon tax; climate change; CGE model; energy intensive industry;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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