Economics at your fingertips  

Distributional impacts of taxing carbon in China: Results from the CEEPA model

Qiao-Mei Liang and Yi-Ming Wei ()

Applied Energy, 2012, vol. 92, issue C, 545-551

Abstract: This study aims to examine how mitigating CO2 through a carbon tax might affect the development goals of narrowing urban–rural gap and improving people’s living standard. In this study, the China Energy and Environmental Policy Analysis (CEEPA) model, a recursive dynamic computable general equilibrium model, was employed to simulate taxing carbon in China. Different carbon tax schemes were designed and their impacts on household disposable income, household welfare, economic growth, and CO2 emissions were compared. Results show that, given the current social security system that obviously favors urban households and the current investment-driven economic growth pattern, without complementary measures for protecting households, a carbon tax will not only widen the urban–rural gap, but also reduce the living standards of both urban and rural households. The negative impacts caused by carbon tax will enlarge over time. An ideal solution, no matter under an emission intensity goal or a total amount control goal, is to reduce indirect tax with carbon tax revenue, whilst increase the share rural households obtain in government transfers.

Keywords: Carbon tax; Computable general equilibrium; Income distribution (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (59) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.elsevier. ... 405891/bibliographic

DOI: 10.1016/j.apenergy.2011.10.036

Access Statistics for this article

Applied Energy is currently edited by J. Yan

More articles in Applied Energy from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-11-08
Handle: RePEc:eee:appene:v:92:y:2012:i:c:p:545-551