Can ocean carbon sink trading achieve economic and environmental benefits? Simulation based on DICE-DSGE model.

Abstract

Low-carbon development requires joint efforts in terms of "carbon reduction" and "carbon sink increase." This study thus proposes a DICE-DSGE model for exploring the environmental and economic benefits of ocean carbon sinks and provides policy suggestions for marine economic development and carbon emission policy choices. The results are as follows: (1) while the economic benefits of heterogeneous technological shocks are apparent, the environmental benefits of carbon tax and carbon quota shocks are significant; (2) increasing the efficiency of ocean carbon sinks improves the environmental benefits of technological shocks as well as the output benefits of emission reduction tools, while increasing the share of marine output can improve both the economic benefits of technological shocks and the environmental benefits of emission reduction tools; and (3) ocean output proportion has the most considerable positive effect on social welfare, followed by marine total factor productivity (TFP). The correlation effect of ocean carbon sink efficiency is negative.