| China's rapid economic growth has been accompanied by a rapid increase in energy use, severe air pollution and associated enormous environmental damages. In this dissertation, I present three general equilibrium modeling approaches to examine potential environmental tax policies in China.; In chapter 1, I use a perfect foresight Computable General Equilibrium (CGE) model to evaluate three environmental tax proposals: carbon tax, fuel tax, and output tax, and their potential impacts on the economic and environmental systems. My results suggest that, under the revenue neutral assumption, the impacts of all three taxes on consumer utility for commodity consumption and GDP are positive in the long run, therefore a "double dividend" can be obtained if tax rates are set appropriately. Finally, I conduct an intertemporal welfare analysis to determine optimal taxation policy targets for the Chinese policy makers.; In chapter 2, I estimate the "co-benefits" from the national environmental tax policies, as well as mixed policies with environmental tax plus emission caps in the electricity sector, based on an integrated model by combining a top-down recursive dynamic CGE model and a bottom-up electricity power planning model. I find that carbon mitigation policies in China can reap significant co-benefits from reduction of ambient non-carbon pollutants such as sulfur dioxide (SO2), particulate matters (PM), and nitrogen oxide (NOx), thereby achieving a "win-win" solution in terms of both local environmental needs and global warming mitigation. In addition, in terms of both co-benefits and induced technology changes, the most effective policy instrument would be a national fuel tax or carbon tax with a carbon emission cap in the electricity sector.; Chapter 3 examines how environmental tax policies may interfere with China's "rural-urban" migration flow and associated labor market distortions. Using a recursive dynamic CGE model with two representative households, rural and urban, I find that environmental tax would discourage rural-urban migration flow, and exacerbate the current spatial labor migration distortions in China. In addition, a fuel tax would be more economically efficient in terms of emission reductions and it creates less distortion on the rural-urban migration process, compared with an output tax. |
