Abstract

Implementation of a carbon tax is one of the major ways to mitigate CO 2 emission. However, blanket taxes applied to all industries in a country might not always be fair or successful in CO 2 reduction. This study aims to evaluate the effects of carbon taxes on different industries, and meanwhile to find an optimal carbon tax scenario for Taiwan's petrochemical industry. A fuzzy goal programming approach, integrated with gray prediction and input–output theory, is used to construct a model for simulating the CO 2 reduction capacities and economic impacts of three different tax scenarios. Results indicate that the up-stream industries show improved CO 2 reduction while the down-stream industries fail to achieve their reduction targets. Moreover, under the same reduction target (i.e. return the CO 2 emission amount to year 2000 level by 2020), scenario SWE induces less impact than FIN and EU on industrial GDP. This work provides a valuable approach for researches on model construction and CO 2 reduction, since it applies the gray envelop prediction to determine the boundary values of the fuzzy goal programming model, and furthermore it can take the economic interaction among industries into consideration.

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