Carbon Tax Policy and Technological Innovation for Low-Carbon Emission

Abstract

Through allowance limit of carbon emissions and carbon tax policies the Government can encourage enterprises to invest low-carbon technologies and decrease the carbon emissions. Considering the low-carbon technology spillover, the three-stage game model shows that the equivalent carbon tax is not a definite value, but a variable in the certain interval. The maximum tax rate is that the small firms cannot afford but to close. And the minimum value of carbon tax rate is that ensure large enterprises to invest in low-carbon technology. Meanwhile, the carbon emission limit and time are relevant to determine the balance of the carbon tax. At first time, the initial tax rate may be higher in order to promote the large enterprises to invest in low carbon production technology. After a certain period, the Government can reduce the tax rate appropriate in order that can avoid the low-carbon technology transfer fee is too high and prevent the formation of low-carbon technology monopoly. Meanwhile, the government will further use carbon emissions tax to subsidize research and development of low-carbon technologies to decrease low-carbon emission technology transfer prices.