Simulations for double dividend of carbon tax and improved energy efficiency in the transportation industry.

Abstract

The Chinese visional goal of achieving the "carbon peak" and "carbon neutrality" puts forward higher requirements for low-carbon development in the transportation industry. Seeking appropriate mitigation strategies to develop low-carbon transportation has been an important part of low-carbon economic development. This study develops a CGE model to analyze the impact of carbon-tax implementation on the transportation industry. It designs four carbon tax-recycling scenarios and simulates for double dividend of carbon tax policy. Then, it designs three scenarios including improved energy efficiency and a carbon tax to explore appropriate mitigation strategies combination. The carbon tax will reduce carbon emissions but it will also reduce sectoral outputs. However, carbon tax recycling can alleviate the negative impact on sectoral outputs, meanwhile achieving reducing carbon emissions. The energy rebound effect brought by improved energy efficiency will greatly reduce the carbon emissions reduction effect, but the carbon tax can promote the awareness of emission reduction of consumers and inhibit the energy rebound effect in the transportation industry. Therefore, at the same time of improved energy efficiency, carbon tax policies should be timely formulated to better promote the sustainable development of the varied transport sectors.