A Study On The Impact Of Carbon Tariffs On China’s Economy: Short-term Inhibition And Long-term Promotion

With the excessive carbon dioxide emissions and global warming, some developed countries began to implement mandatory emissions reduction, and due to the Kyoto Protocol as the representative of the international climate convention does not require developing countries to assume the emission reduction obligations, the developed countries are proposed to impose carbon tariffs on countries that do not implement the same measures to avoid unfair competition and carbon leakage, and carbon tariff has become an important means of extending the low carbon regulation from domestic market to the international market and producing a universal binding force in the world for the developed countries. The developed countries have carried out the carbon tariff because of some intrinsic reasons too. The developed countries have already spent the peak of carbon emissions, and the energy consumption structures are more reasonable, and they are also with the leading edge of low-carbon technology and the formation of a certain scale of consumer market support. Under the background of climate warming and energy depletion, the proposed carbon tariff can not only lead to the high ground of the developed countries, but also gain the leading power in the world. Although the carbon tariff legislation led by the United States is not smooth, but play a low carbon technology advantage to reshape the international trade division of labor pattern are in the interests of developed countries, and the pursuit of the interests will also accelerate the pace of carbon tariff.The carbon tariff is no doubt to the developing countries, and once it becomes a reality, it will have a significant impact on China’s economy. This paper analyzes the short-term and long-term impact from theoretical and empirical perspectives. The theoretical analysis of short-term impact refers Gros (2009) of the two countries models, while establishing a supply and demand model to analyze, and the results show that carbon tariffs will greatly reduce the production and export of high emission industries in China. When we do not consider the externality, carbon tariff will make the welfare level of our country fall. Empirical analysis is using GTAP model to simulate the impact of several carbon tariff rates, and the results are in agreement with the conclusion of theoretical analysis. The empirical analysis also shows that if the United States, Japan and Europe at the same time impose a moderate carbon tariff, it will make China’s GDP fell by 0.89%. The long-term impact of carbon tariffs on industrial structure is analyzed, and the theoretical analysis is carried out from the perspective of factor, demand perspective and technical progress, through the model of reasoning, industrial structure information entropy and other methods to analyze how carbon tariffs promote industrial structure upgrade. Empirical analysis is using a panel data model, and through the construction of a new C-D production function, including energy consumption which through the formula into carbon tariffs, so as to generate a production function which reflects the relationship between the carbon tariff and the added value of the industry. The results show that:the carbon tariff increases by 1%, the added value of the second industry will be reduced by 0.64%, and third industrial added value will increase by 0.41%; the carbon tariff increases by 1%, the manufacturing value decreases by 0.46%, and the storage and postal services increase by 0.53%. Both theoretical and empirical analysis show that:in the long run, carbon tariffs can promote the optimization and upgrading of industrial structure in China.Therefore, the impact of carbon tariffs on China’s economy is short-term inhibition and long-term promotion, and we need to study the negative impact in the short term and positive impact in the long-term in the face of carbon tariffs, and we should design multi-level response policy from the strategies to the tactics, and from the short-term to long-term, and from macro to micro. At the end of this paper, the general idea and development strategies for the carbon tariff are put forward, and the countermeasures are given in the two aspects of government and enterprise.