Environmental Benefits From Carbon Tax in the Chinese Carbon Market: A Roadmap to Energy Efficiency in the Post-COVID-19 Era

Ran Wei,Vishal Dagar,Bakhtawer Ayub

doi:10.3389/fenrg.2022.832578

Abstract

Because of China’s global responsibilities to address climate change, the country has made a commitment to limiting the growth of future emissions using policy measures, such as funding mitigation research and regulating energy efficiency requirements directly. Extensions of these policies, such as the measures to improve energy efficiency, use of carbon taxes, and changes to the mix of electricity generation in the country, are also of interest to China. This article applied a computable general equilibrium (CGE) model to examine the effects of such energy efficiency and climate change policy options in the post-COVID-19 era in the China economy. The study findings show that even modest measures can have significant effects on emissions with marginal economic impacts, given the current level of development in the China electricity generation and transportation sectors. It is estimated that a 5 RMB per ton carbon tax will reduce emissions by 4.1% and GDP by 0.27%. Emissions drop by 8.2% and GDP drops by 0.54% when energy efficiency increases by 2% across the China economy, respectively. As a final result, a 5% shift away from burning coal would reduce emissions by 9.0%, while GDP would increase by 1.3%. It has been shown that even low carbon taxes can encourage a notable cleaner energy system.

Highlights

Increasing carbon emissions are a major threat to environmental change (Yan et al, 2021), which represents both evolving countries’ main ongoing anxiety for the developed economies (Akram et al, 2020; Irfan et al, 2020; Yumei et al, 2021)
A large proportion of CO2 emissions come from the use of fossil fuels (Elavarasan et al, 2021a; Irfan et al, 2021a; Dagar et al, 2021; Qiu et al, 2022), for example, coal, the key energy source of car industries, which is closely linked to the economic progress (Iqbal et al, 2019a)
Using data from China’s input–output table and the computable general equilibrium (CGE) model, we examined the effects on energy efficiency and environmental protection of increasing carbon taxes

Summary

Introduction

Increasing carbon emissions are a major threat to environmental change (Yan et al, 2021), which represents both evolving countries’ main ongoing anxiety for the developed economies (Akram et al, 2020; Irfan et al, 2020; Yumei et al, 2021). A large proportion of CO2 emissions come from the use of fossil fuels (Elavarasan et al, 2021a; Irfan et al, 2021a; Dagar et al, 2021; Qiu et al, 2022), for example, coal, the key energy source of car industries, which is closely linked to the economic progress (Iqbal et al, 2019a). Capital investment flows have been the subject of research in Asian markets over the current years (Iqbal et al, 2021b; Shao et al, 2021). This issue can be a cause for concern due to their high

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Discussion

Conclusion