Research on Environmental Tax with Emphasis on Developing Renewable Energy in Beijing, China

Abstract

Development of renewable energy is considered as an effective measure to control greenhouse gas emissions in the world. Policy instrument to promote development of the renewable energy have been paid more and more attention. As the most industrialized and urbanized region, Beijing plays as a demonstration role to show the impact of environmental policy instrument on the development of renewable energy and the mitigation of GHG emissions. In this paper, based on the input-ouput table, we constructed a dynamic input-output model introducing renewable energy industries, as well as the invironmental policy instrument of the emission tax. It not only can explore the relationships among Beijing’s renewable energy, economy and environment, but also can analyze the future trends of the economy and GHG intensity from 2010 to 2025. The objective function is the maximized GRP, subject to greenhouse gases emissions constraint and some subjective functions. The simulation results illustrated that with the GHG emissions constraint as1.5 times of the 2010 level, carbon tax as 80 CNY/t CO2-e is effective to promote the renewable energy development, economic development and GHG emissions mitigation. Annual growth rate of GRP can be up to 6.4%. The economic growth rate increases 0.6% compared with the condition when not introducing the policy instrument. In 2025, the GHG intensity will be 41.8 t CO2-e/million CNY, 41.4% reduced compared with the 2010 level. Total power generation of renewable energy can be 40.9 GWh, contributing to the reduction of 25 million CO2-e emissions in 15 years. This research proves that the proposed environmental policy instrument is effective to realize the government’s targets.