Analysis Of The Effect And Strategies Of Carbon Tarriffs On China's Export Trade

In June.2009, the U.S. House of Representatives carried a bill named American clean energy and Security Act at the background of the subprime crisis and the global climate deterioration. The Bill suggested that the U.S. government should impose carbon tariff on the products which importing high energy consumption since 2020. It immediately caused a stormy controversy around the world. Developed countries such as France and Canada actively endorsed the carbon tariff, while developing countries like China and India strongly against it.Carbon tariff is considered to contain many new features as a new form of international trade barrier. Those developed countries could protect their industries and boost the economy by imposing carbon tariff. To developing countries, the imposition of carbon tariff will bring unbearable pressure for them, as they are restricted by the capital and technology, heavily relying on industries to boost their economy. However, we have to admit it that carbon tariff will play a positive role in protecting the deteriorating environment and promoting the optimization of industrial structure in developing countries in the long run.China is one of the largest developing countries in the word, and also an important export trading power. Now China has been the main supplier of industrial products to developed countries, with the coal as its main energy resource. In recent three years, the export of industrial manufactured goods always maintains about 95 percent of the whole export amount, but china's economy depends greatly on energy consumption and exports. Obviously, once the developed countries levied carbon tariff taxes, China's exports would be seriously worn down. Firstly, the paper gives a general introduction containing the background, causes and the essence analysis of carbon tariff, and then describes a detailed description about the conventional methods. With the status quo of China's export trade, the paper analyses the relationship between the export trade and carbon emissions. Then it uses GTAP model, which based on CGE model is an important policy analysis tool on international trade, to analyze supposing the U.S. levied carbon tariff taxes on the products from China, what happened to the impact of industrial structure, export trade etc. The results show that when the U.S. imposed carbon tariffs, the cost of our products would be greatly enhanced, the competitiveness of our products would be reduced and the terms of trade in China would be worsen. At the same time, cost-push inflation appears in the U.S.by imposing carbon tariffs, which affects the GDP and social welfare of the U.S.A.So imposing carbon tariffs is more harm than good to the U.S. and China.Finally, it proposes some strategies to react to the imposition of the carbon tariffs in developed countries combined with the national situation of our country.