Design And Optimization Of The Differentiated Industrial Carbon Tax Policy

To deal with the challenges from the serious carbon emission problem,China plans to promulgate a differentiated carbon tax policy by industry and region in the future.Since around 70% of carbon emissions of China are from the sectors in the production field,how to effectively design a differentiated industrial carbon tax is necessary.This paper simulates the environmental and economic effects of a carbon tax levied on Chinese sectors in different scenarios from 2021 to 2030 via a dynamic nonlinear inputoutput method.From three key design elements of a tax system,namely tax rate,taxpayer,and policy mix,this paper investigates the design and optimization strategies on the differentiated industrial carbon tax.The main research works are as follows:(1)Considering the CGE model can only simulate the impacts of a given tax on the macroeconomic system,based on the dynamic CGE and dynamic input-output theory,a dynamic economic-environment model is constructed to resolve the problem.According to the optimal commodity tax theory,a dynamic optimal tax module is added to study the dynamic optimal tax rate under certain constraints,which provides a new research method for the optimal commodity tax theory.(2)From the perspective of regulating tax rate,this paper studies the effects of different tax modes,including the fixed uniform carbon tax,the fixed differential carbon tax and the dynamic differential carbon tax,and reveals the optimal tax rate policy design strategy.The results show that the dynamic differential tax rate increases over time.Due to the late tax start time and low initial tax rate,the level of carbon emissions of all sectors is higher in the initial stage,and a higher tax rate is required to meet the emission reduction goal in the later stage.That leads to a higher carbon tax burden and a larger fluctuation in GDP growth.Secondly,the fixed uniform carbon tax cannot achieve the emission reduction target due to the low tax rate.Thirdly,the optimal tax rate is the fixed differential carbon tax.A certain moderate fixed differential carbon tax is helpful to form a reasonable expectation for all sectors on emission reduction.(3)From the perspective of regulating the taxpayers,this paper compares the effects of the optimal fixed differential carbon tax policy under a loose carbon policy scenario and a strict carbon policy scenario.The results show that the government can increase the policy benefits by dynamically adjusting the taxpayer according to their performance in both two scenarios.The optimal policy design strategy on the taxpayer is the strict carbon policy scenario because of the higher policy benefits.(4)From the perspective of the policy mix,this paper studies the effects of the optimal fixed differential carbon tax in a loose carbon policy scenario and a strict carbon policy scenario under a hybrid ETS carbon-tax system.The results show that to reduce the political resistance of environmental policy promotion,the hybrid ETS carbon-tax system exchanges the loss of environmental objective for the benefits of economic objective,which results in the regression of the original optimal fixed industrial differentiated carbon tax.(5)Indirect high energy-intensive sectors,such as construction and transportation which consume lots of energy-intensive immediate inputs,are relative insensitivity to a carbon tax due to the lower direct energy consumption.However,adjusting them to the low energy consumption group will lead to an increase in carbon emissions of related high energy-intensive sectors.In the hybrid ETS carbon-tax system scenario,the co-movement effects between sectors along the industrial chain will be enlarged.Therefore,other environmental tools,such as technical standards,need to be considered for management.