General equilibrium analysis of carbon tax policy on water-energy-food nexus efficiency

Tianyuan Zhang, Qian Tan and Yanpeng Cai

Energy, 2024, vol. 304, issue C

Abstract: Carbon-reduction policy affects socio-economy and Water-Energy-Food (WEF) nexus contained therein. Existing studies concentrated on policy performances on resource consumption, but cannot quantify the impacts on resource utilization efficiency. To fulfill such gap, this study developed an integrated evaluation method through integrating computable general equilibrium model with data envelopment analysis to explore the impact of carbon tax on WEF environmental efficiency of China. Results show that increasing carbon taxes would improve the energy structure and reduce carbon emissions. While the increased cost of fossil fuels would have negative but limited impacts on economic output of water supply and food sectors through economic activity connections. Synergistic effect of WEF resource conservation could be observed in most production sectors, expect for clean energy sectors. Carbon tax would improve the WEF environmental efficiency expressed as the trade-offs between economic and carbon emission outputs and WEF resource inputs. There are significant differences in WEF efficiency and its growth rate among production sectors, with food sectors experiencing the most significant improvement in WEF efficiency at a carbon tax of 70 yuan/ton. The evaluation results raised the awareness of the performance of carbon tax on WEF nexus and provide a new perspective for promoting WEF nexus efficiency.

Keywords: Water-energy-food nexus; Carbon tax; Computable general equilibrium; Data envelopment analysis; Policy analysis (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:304:y:2024:i:c:s036054422401853x

DOI: 10.1016/j.energy.2024.132079

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