Macroeconomic Effects Of Carbon Emission Reduction Policy

In recent years,due to the large increase of carbon emissions caused by economic development and energy consumption,the greenhouse effect is becoming more and more serious.As the second largest economy in the world,China attaches great importance to the environmental problems caused by carbon emissions.Since the 1990s,China has put forward new energy strategy,unit GDP emission reduction targets and carbon emission peak targets.However,as a developing country,China’s industrialization process is not perfect,and there is still a lot of room for development of infrastructure construction.We must rely on the role of the government’s macro-control to formulate a long-term and reasonable emission reduction policy to achieve a win-win situation of industrial development and emission reduction.Due to the randomness of environmental changes and economic fluctuations,the impact of environmental policies on economy and environment is also highly uncertain.Radical policies will have significant emission reduction effect,but moderate policies can better protect output.Therefore,building theoretical models to simulate the impact of emission reduction policies on macroeconomic system has important reference significance for China’s energy conservation and emission reduction work.In order to explore the effect of government’s carbon emission reduction policy,this paper constructs a Dynamic Stochastic General Equilibrium model(DSGE model)including five sectors based on macroeconomic theory and environmental science theory.This paper explores the instantaneous,short-term and long-term effects of carbon tax policy,clean energy subsidy and carbon emission cap,and uses variance decomposition results and impulse response analysis to simulate the impact of technology shocks and policy shocks on macro variables,so as to explore the transmission mechanism of policy impact on environmental quality and economic level,and put forward targeted policy recommendations.First of all,energy is assumed as intermediate products.According to whether energy use will produce carbon emissions,intermediate products are divided into clean energy and polluting energy.Combined with the calculation of impairment function and externality,a five sector DSGE model including household sector,clean energy production sector,polluting energy production sector,final product production sector and government sector is constructed as the benchmark model without emission reduction policy.According to the research problems,the model results mainly observe the two variables of total output and emissions.On the basis of the benchmark model,the optimal conditions of the production sector and the original assumptions of government revenue and expenditure are modified respectively to form three policy models of carbon tax,clean energy subsidy and carbon emission cap.Through the change of steady-state value,the immediate effect of policy implementation is explored;through the variance decomposition results,the change of macro variables is decomposed to explore the role of single impact,so as to determine the main development direction in the future;impulse response diagram analysis is used to explore the long-term impact on production and carbon emissions.It is found that there are significant differences in the economic effect and emission reduction effect of carbon tax policy,clean energy subsidy policy and carbon emission cap policy.First of all,the most significant effect of policies on carbon emission reduction and output reduction is the implementation of policies.Secondly,from the variance decomposition results,the impact of clean energy subsidies on the improvement of environmental quality accounted for 34.78%of all impacts,carbon tax impact was 20.93%,and carbon emission cap impact accounted for only 1.21%,mainly relying on the improvement of other technological progress to reduce carbon emissions.Finally,through the impulse response diagram,we can find that the emission reduction capacity of carbon tax policy decreases with time,and has inhibitory effect on output,while the long-term output level will gradually change from decreasing to increasing.Clean energy subsidy policy is long-term and holistic,and the emission reduction effect increases with time,and its impact on output is similar to that of carbon tax policy,but the intensity of output inhibition is small.The emission cap policy will promote the increase of output in the short term,but the impact on the reduction of carbon emissions is weak,and the effect decreases with time.The innovation of this paper mainly consists of the following points.Firstly,the negative externalities caused by carbon emissions are introduced into the utility function and production function as endogenous variables.Secondly,energy is regarded as an intermediate product and divided into clean energy and polluted energy according to the cleanliness of energy.Thirdly,add the environmental loss function caused by carbon emission is introduced.