Energy conservation and emission reduction effects of fuel tax and assessment of economic impacts-based on the Beijing 3E-CGE model

Hui Shao (), Biao Ye and Hao-ran Pan
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Hui Shao: Beijing Normal University
Biao Ye: Beijing Normal University
Hao-ran Pan: Beijing Normal University

Letters in Spatial and Resource Sciences, 2022, vol. 15, issue 3, No 5, 377-399

Abstract: Abstract Fuel tax levy is an appropriate measure to reduce motor vehicle pollution since the government can’t directly tax drifting source of pollution. However, this action will affect every part of residents’ life, we should take many factors into consideration. This paper is devoted to the environmental and economic effects of various fuel taxes for different departments based on Beijing economy-energy-environment computable general equilibrium (3E-CGE) model. Researches show that raising fuel tax rates for production & import and consumption contributes to air pollution and emission reduction. However, tax increase may hinder economic growth. Higher tax on production & import will lead to stagflation while on consumption will lead to depression. Besides, the influences on different industries also vary. My conclusion is that government should levy fuel taxes as well as pay subsidies to optimize industrial structure and decrease the impact on economy.

Keywords: Fuel tax; 3E-CGE; Energy conservation and emission reduction; Economic effect (search for similar items in EconPapers)
JEL-codes: R11 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s12076-021-00294-1

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