Fiscal Policy Of Promoting Low-carbon Economy

To deal with global climate change has to take the path of developing low-carboneconomy has become the consensus of the international community. The concept oflow-carbon economy originated from the research of global climate change, however,since its concept has embedded with ctricial issues such as energy security, nextgeneration technologies, the purpose of developing low carbon economy has alreadybeyond simply dealing with climate change, and has been raised to a level in which,developing low carbon economy is the national strategic goals that span across politic,economic, cultural, people’s livelihood, and other areas.This dissertation sorts and comprehensivly analyzes a large number oflow-carbon economyrelated literature from the prospective of macroeconomic theoryand fiscal policy. On this basis, the paper tries to discuss the theoretical basis for thedevelopment of low-carbon economy, and try to use economic models and gametheory methods to do in-depth analysis of the mechanism of how fiscal and taxationpolicies promote low-carbon economic development.To be able to make reasonable suggestions that are justified with China’s actualsituation, the paper uses statistical methods to do multidimensional analysis from theangle of total CO2emissions, CO2emissions per capita, and CO2/GDP index., andevaluate the effects of current polices on reducing CO2emissions.According to the conclusions of empirical research, this paper analyzes the mainproblems existing in China’s current tax policy to promote low carbon economicdevelopment, and deeply analyses the reasons of these problems. This paper uses themethod of comparative research to compare and contrast three groups of countrieswhich are devided based on their attitude toward the global cimate changephenomenon. The paper then summarizes the practice of fiscal policy in thesecountries to promote low carbon economic development and use them as references toChina’s related policy practices.Finally, the paper concludes that in order to improve China’s fiscal and taxationpolicies to better serve the purpose of promoting low-carbon economy, first shouldclearly determine the objectives, priorities and orientations of those policies. Thepaper also suggests making better use of both revenue policies and fiscal expenditurepolicies, such as budget policy, Government procurement policy, transfer payments and taxation polocies and tax incentives. Additionally, supporting measures such aslow-carbon laws and regulations, financial instruments, energy pricing mechanism,and cultural cultivation should be build and impoved for China’s fiscal and taxationpolicies to be more effective.