Can energy supply-side and demand-side policies for energy saving and emission reduction be synergistic?--- A simulated study on China's coal capacity cut and carbon tax

Abstract

Existing literature mainly focuses on the combined effect of different policies on energy, economy and environment. However, most of them were based on the perspective of energy demand-side. In order to fill this gap, we study the effect of carbon tax and coal capacity cut from both the energy demand-side and energy supply-side using a dynamic Computable General Equilibrium (CGE) model. Different policy effects including single one and synergistic one are compared. Moreover, the synergy degrees of coal capacity cut and carbon tax in energy saving, emission reduction and economic growth are evaluated. The results show that both coal capacity cut and carbon tax are beneficial to energy conservation and carbon emission mitigation at the expense of a slight loss in economy. Mixed policy has better performance than single policy in carbon emission reduction and energy saving. Also, a more stringent policy is conducive to carbon emission mitigation and energy conservation. Additionally, there are significant synergistic effect of coal capacity cut and carbon tax from the perspectives of energy saving, emission reduction and economic growth. Therefore, the mixed policy of coal capacity cut and carbon tax should be promoted and an appropriate stringency level of policy mix should be adopted.