Macro-economic and Sectoral Effects of Carbon Taxes: A General Equilibrium Analysis for China

ZhongXiang Zhang

Economic Systems Research, 1998, vol. 10, issue 2, 135-159

Abstract: This paper analyzes the macro-economic and sectoral effects of carbon taxes imposed to achieve predefined carbon dioxide (CO2) emission targets for China, by using a dynamic computable general equilibrium model of the Chinese economy. Following a brief introduction of the model, the baseline scenario for the Chinese economy until 2010 is developed under a set of assumptions about the exogenous variables. Next, the paper analyzes the economic implications of two less restrictive scenarios under which China's CO2 emissions in 2010 are cut by 20% and 30%, respectively, relative to the baseline, assuming that carbon tax revenues are retained by the government. Then, the efficiency improvements are computed for four indirect tax-offset scenarios relative to the two tax-retention scenarios already considered. The paper ends with some remarks on constructing a social accounting matrix for China and suggestions for further work to enrich the policy relevance of this study.

Keywords: Carbon dioxide emissions; carbon tax; China; computable general equilib-rium model (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (23)

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DOI: 10.1080/09535319808565471

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