The Analysis Of The Impact Of Carbon Tax From The Perspective Of Enterprises

Global warming has raised people’s attention about carbon dioxide emissions, thus the concept of carbon emissions reduction has been proposed. Due to large and incremental carbon emissions, China would face increasing pressure of carbon emissions reduction, the government needs to take effective measures to reduce carbon dioxide emissions. Carbon tax could effect carbon dioxide emissions, at the same time, it would influence the country’s output. For China, the output of foreign-funded enterprises accounted for nearly1/3, thus how much impact of carbon taxes reform on Chinese domestic enterprises is a question worth exploring. In this paper, we develop a theoretical general equilibrium model, adequate for evaluating the effects of carbon tax reforms in the short term and in the long term, capable of incorporating the international externalities possibly triggered by carbon tax reforms in China. Our main findings are as follows. Firstly, whether in the short term or in the long term, the impact of carbon tax beard by foreign companies are more than Chinese domestic enterprises. Secondly, in the short term carbon tax will reduce Chinese carbon emissions and output, but in the long term it will increase carbon emissions and improve the level of production. Thirdly, carbon tax reforms in China will generate transnational externalities.