Effects Of Energy And Environmental Policy On Growth, Employment, And Emissions Abatement: A CGE Analysis

China's rapid economic growth has led to the imbalance between energy supply and demand and more apparent deterioration of environmental quality. China is now facing multiple energy-environmental pressures including the obvious contradiction between energy supply and demand, low energy utilization efficiency and increasing emissions mandate pressure. How to maintain China's economic and energy-environmental coordinated development, and how to use the energy and environment related policy to coordinate the multiple targets of growth, employment and emission reduction, have become fundamentally practical problems which political and academic circles pay close attention to. This paper studies the growth, employment and emission reduction effects of China's energy-environmental policies, and has a very typical theoretical and practical significance to China who is facing industrial transformation and upgrading and taking efforts to achieve economic and social coordination.The main process and content of this study are as follows. Firstly, based on the analysis of the status of China's energy-environmental issues, summary of the major energy-environmental issues restricting economic and social development, and review of recent China's energy-environmental policies, this paper employs index decomposition method to explore the historical characteristics of emissions reduction process and characteristics of contributing factors driving the industrial emissions reduction process using China's industrial emissions reduction data from 1993 to 2009. Secondly, based on research of energy-environmental policy by researchers at home and abroad and comprehensive review and evaluation of energy-environmental CGE model, this paper builds an energy-environmental CGE model with characteristics of China's economy and employment and demonstrates a detailed description of the model's structure characteristics and modeling process.Finally, this paper uses the CGE model to simulate and analyze the influence on China's economic development by energy efficiency policies at the technical level and the energy tax and carbon tax policy at the macro level. This research pays special attention to the policy influences on growth, employment and emission reduction by the above two levels as well as influence differences between long and short terms.Conclusions of this study indicate that the emission management and technical advancement in industrial production play a much more important role than structure adjustment among the contributing factors influencing the emission change. However, energy saving effects achieved at the macro level by policy at the technical level may be less effective than the degree of efficiency improvement at technical level, or even more energy consumption would be provoked, because of the energy rebound effects induced by adjustment mechanism within economic system. This phenomenon is called "economy-wide rebound" effect. And this also exacerbates the energy-intensive preference of China's economy. The increasing energy consumption stimulated by output growth and structural adjustment which driven by energy efficiency increase may eventually offset or exceed the energy saving effect of energy efficiency increase. Therefore, China needs to introduce energy and environmental policies such as energy tax or carbon tax at the macro level.Energy efficiency improvement policy is appropriate policies to ease pressures on energy and environment on the premise that China keeps stable economic and employment growth. However, energy efficiency improvement policy just at the technical level may bring serious consequences of energy saving trend reversal. Energy tax and carbon tax policies have positive roles on realizing energy conservation and emission reduction goals, but have negative impacts on economic and employment. Although the government can use the method of tax cycle to eliminate this negative impact to a certain degree, and strive to obtain a "double dividend" effects, it's still difficult to avoid all the negative effects.In this paper, energy and environmental policies, economic growth, employment, energy conservation and emission reduction issues are brought into a unified framework for systematic study. Then, the interactive relationships among them are revealed in a computable general equilibrium model which provides a systematic assessment tool for China's energy and environmental policy evaluation.By policy simulation of CGE models and the empirical research on China's emissions reduction issues, the conclusion obtained can provide some theoretical guidance and policy implications to energy conservation and emission reduction promotion, realization of emission reduction commitments to international community and the Twelfth Five Years Plan, and economic development transformation.