Effects of Carbon Dioxide Control Policy in China by Multi-Regional CGE Model

Zhengning Pu () and Yasuhisa Hayashiyama
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Zhengning Pu: School of Economics and Management, Southeast University, Nanjing 210096, China; Graduate School of Economics and Management, Tohoku University, Sendai, Miyagi 980-0852, Japan
Yasuhisa Hayashiyama: Graduate School of Economics and Management, Tohoku University, Sendai, Miyagi 980-0852, Japan

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2012, vol. 7, issue 4, 580-603

Abstract: In recent years, China has faced tremendous pressure to reduce carbon dioxide emissions. At the COP 15 United Nations Climate Change Conference in Copenhagen in 2009, China committed itself to achieve a 40%¨C45% per GDP carbon dioxide emission reduction in the near future. To reach this goal, China is willing to adopt a series of new policies, including attempts to introduce a carbon tax, and to start an energy-resource-tax pilot program in the western provinces. For this research, we constructed a Multi-Regional Computable General Equilibrium model. Then we used six scenarios to evaluate the economic effects and effectiveness of energy-resource tax policy for control of carbon dioxide emissions for different regions of China. The main result of this research is the finding that an ad valorem energy resource tax can reduce carbon dioxide emissions in China. At the same time, fiscal policy might engender different effects in different regions of China. Additionally, this policy is more efficient for controlling petroleum and natural gas resources than it is for coal resources.

Keywords: greenhouse gases; energy tax; Computable General Equilibrium model (search for similar items in EconPapers)
JEL-codes: D5 Q4 R1 (search for similar items in EconPapers)
Date: 2012
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