Analyzing Policy Choices Of "Carbon Trading&Carbon Tax" Effect Upon Economic And Carbon Emissions Of China

The world is facing environmental issues of more and more severe climate changeand energy shortage, so energy-saving and emission-reduction has become the world’smainstream road to development. In China, development status of high energyconsumption, high emission, serious air pollution problems as well as the task of emissionreduction commitments at international conference, let reducing carbon emissionseffectively become a urgent problem of our country to fulfill international obligation andachieve sustainable economic development. Based on two mainstream internationallypolicy of carbon reduction: carbon trading and carbon tax, analyzing single "carbontrading" policy and combination policy of "carbon trading&carbon tax" effects uponeconomic output, energy consumption and carbon abatement at the macro-level andindustrial sector level of China.Firstly, this paper constructs Social Accounting Matrix (SAM) based on input-outputtable of China2007, calculating basic data such as the industry association of each sectorin2007, SAM multiplier matrix, as well as parameters required for the model.Constructing Single "Carbon Trading" CGE Model and "Carbon Trading&Carbon Tax"CGE Model, Single "Carbon Trading" Model is containing a carbon trading module andthe cost of carbon trading in CES function of the production module, and "CarbonTrading&Carbon Tax" CGE Model is constructing carbon tax cost into CES function ofthe production module in Single "Carbon Trading" Model. Designing carbon tax schemewith no discriminatory tax rate and discriminatory tax rate of sectors, in scheme ofdiscriminatory tax rate, carbon tax cost of the sectors which is exempted from tax is zero.Then, according to the calculation results, analysising different policy effectseparately, when implementing the single "carbon trade" policy:(1) At the macro-level,higher carbon price and higher abatement targets cause more GDP loss; When carbonprice is high enough, energy consumption and carbon abatement is only related toreduction targets; Considered with the macro economic loss and reduction effect, it ismost reasonable to introduce carbon market under the scenario of10%carbon abatementtarget, which with less comprehensive loss, meanwhile, estimating its correspondingoptimal carbon price; Introducing carbon price will not only reduce energy consumptionbut induce a low-carbon energy consumption structure, especially the coal consumptiondecreased significantly.(2) An the industrial sector level, outputs of all sectors, especially energy sector, will drop, while industrial structure stays unchanged to some extent; Themain impact on energy consumption is that the introduction of the carbon price has greateffect on the energy sector and the transport sector; Each sector’s unit cost of aggregatedenergy utilization is divided into two parts, the energy own price and cost of carbonemissions, concluding that unit cost of aggregated energy utilization’s change is mainlycaused by the cost of carbon emissions; Further, emission abatement of electricity, heavyindustry and light industry is relatively high.When implementing the single "carbon trade" policy:(1) At the macro-level, tax ratehas no obvious connection with the loss rate of GDP, energy consumption and carbonemission reduction effect; When the carbon abatement target is10%, the policy of nodiscriminatory tax rate can cause less GDP loss than policy of discriminatory tax rate, butunder higher carbon abatement target, the former causes higher GDP loss than the latter;Under combination policy, carbon abatement target of10%is still the best choice,meanwhile estimating its corresponding optimal carbon price.(2) At the industrial sectorlevel, each sector’s cost of carbon emissions increases obviously under combinationpolicy, contribution to unit cost of aggregated energy utilization is also increasedsignificantly, and played a decisive role; Meanwhile promoting the carbon emissions ofelectricity, heavy industry and light industry sector.Finally, according to the conclusion, policy recommendations of improving carbontrading, setting carbon abatement targets and its corresponding policy, limiting carbonprice and other related aspect are given by this paper.