Analysis Of Carbon Price Impact On China’s Manufacturing Industry

In November 12, 2014 the two countries issued a joint statement on climate change in Beijing, China was first formally proposed around 2030 China carbon emissions is expected to reach the peak, which not only shows the determination of continue to go green development path,but also put forward new requirements for the market to create a nationwide carbon emission reduction. The implementation of carbon emission reduction policies through the introduction of a carbon price will influence various aspects of China’s economic.The carbon price in carbon market could affect the cost of manufacturing sectors, leading the level of economic growth and energy consumption and factor price to change. By using the data from 2001 to 2011 of GDP level of China’s manufacturing industry, carbon emissions, energy consumption, human capital and material capital, the paper uses 60 yuan per ton of the domestic carbon price level as a benchmark to measure the impact of carbon price on overall manufacturing industry and the various sectors. The results show that the carbon price shock is helpful to improve the level of economic growth in manufacturing industry, reduce the demand for energy in the process of production and the factor price in the factor market. To further study the heterogeneity between different sectors, 27 manufacturing sectors are divided into high carbon and low carbon industry, to study the two different types of industry in response to climate policy regulation. We find that climate policy could help enhance economy level for both low carbon industry and high carbon industry, but the impact for energy consumption is different.High carbon industry in a hit from the carbon price will increase the investment level of capital to replace the original factors of energy demand, while the low carbon industry will increase the demand for energy.