The Impact Of Carbon Tax On Regional Economic-Environment-Energy System

Global climate change is a focus issue and has captured widely international attentions. As one of the largest energy consumer and carbon emitter, China committed to reducing CO2 emissions intensity by 40%-45% by 2020 compared to the 2005 level. Meantime, China is the largest developing country, it is very difficult for China to harmonize the relationship between economic growth and carbon emissions since China is on a crucial stage to accelerate the process of industrialization and urbanization. In order to achieve its emissions reduction goal,more effective and long-term policy instrumentsare imperative for China government. Carbon tax has been practiced successfully in many countries and is proved to be an effective economic measure to carbon emissions reduction.Whilein China, the regional economic development model and nature resource endowment are significantdifferent across regions. Therefore, the energy production and consumption structure have a great difference, which may make the effect of carbon tax different. In order to quantitatively describethis difference, three typical provinces are selected to build the CGE model respectively, including Henan province, Fujian province and Chongqing province.We simulate the impacts of carbon tax ononeconomic growth and carbon emissions for three typical regions in China by using CGE model at three different rates, that is, RMB 20, RMB 40, and RMB 60 per ton of CO2, respectively.We further compare the impact of two carbon tax recycling policy at the same carbon tax rate. The empirical results indicate:In three regions, implementation of carbon tax has a positive effect on carbon emission reduction. And the effect of emission reduction is greaterfor the regions with higher carbon intensity. Meanwhile, the regions with higher carbon intensity have a bigger shock at the same carbon rates. And both of reducing the indirect tax of enterprise and giving household subsidy are helpful to reduce the negative impacts of the carbon tax on economic variables. So China government should consider the "Common but Differentiated’" carbon tax policy and he complement fiscal policies in the meantime of levying carbon tax to reduce the negative impacts of carbon tax and ensure the regional development being fair.