Effects of Carbon Tax on Urban Carbon Emission Reduction: Evidence in China Environmental Governance

Aiwen Zhao, Xiaoqian Song (), Jiajie Li (), Qingchun Yuan, Yingshun Pei, Ruilin Li and Michael Hitch
Additional contact information
Aiwen Zhao: College of Finance, Institute of High-Quality Development in Huaihai Economic Zone, Xuzhou University of Technology, Xuzhou 221018, China
Xiaoqian Song: China Institute of Urban Governance, Shanghai Jiao Tong University, Shanghai 200030, China
Jiajie Li: Key Laboratory of Ministry of Education for Efficient Mining and Safety of Metal Mines, School of Civil and Resource Engineering, University of Science and Technology Beijing, Beijing 100083, China
Qingchun Yuan: School of Foreign Languages, Xuzhou University of Technology, Xuzhou 221018, China
Yingshun Pei: College of Finance, Institute of High-Quality Development in Huaihai Economic Zone, Xuzhou University of Technology, Xuzhou 221018, China
Ruilin Li: School of Political Science and Economics, Yonsei University, Seoul 03722, Republic of Korea
Michael Hitch: Western Australian School of Mines: Minerals, Energy and Chemical Engineering, Curtin University, Perth, WA 6845, Australia

IJERPH, 2023, vol. 20, issue 3, 1-19

Abstract: Carbon tax is an important economic instrument in achieving the goal of carbon emission reduction and sustainable development. This paper investigates the effects of carbon tax on carbon emission reduction in China. First, a non-competitive input–output table for Carbon Emissions of 28 sectors in China after Carbon Tax was established, based on the “2018 China Non-competitive Input–Output Table (42 Sectors)” and the carbon emission data of sectors provided by China Carbon Emission Accounts and Datasets (CEADs). Then, an input–output price model was established to study the changes on product price, GDP, employment, and carbon dioxide emissions of 28 sectors after carbon taxing ranged from 10 to 200. When the carbon tax rate reaches 200 yuan/ton, the inflation rate will be 5.907%, the total GDP will be decreased to 1.910%, the total labor force will be decreased to 1.744%, and the total carbon emission reduction rate will be increased to 8.171%. Results showed that with the increases in carbon tax, the inflation rate was increased, the rate of carbon emission reduction was increased, and the negative effects on GDP and employment were also increased. Suggestions on policy making, such as combination of carbon taxing and carbon trading, dynamic adjustment mechanism, tax neutrality, and forcing active carbon reduction, were proposed to minimize the adverse effect of levying carbon tax. The results from this paper would provide a reference for the policy making on carbon management.

Keywords: carbon peak and carbon neutralization; carbon tax; macroeconomy; carbon emission reduction; effect measurement (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/1660-4601/20/3/2289/pdf (application/pdf)
https://www.mdpi.com/1660-4601/20/3/2289/ (text/html)

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: https://EconPapers.repec.org/RePEc:gam:jijerp:v:20:y:2023:i:3:p:2289-:d:1048463

Access Statistics for this article

IJERPH is currently edited by Ms. Jenna Liu

More articles in IJERPH from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().