Industrial Green Transformation,Financial Policies And Macroeconomic Fluctuations

In recent years,with frequent extreme weather events around the world,climate issues have become the focus of attention from all walks of life.In September 2020,Xi Jinping proposed for the first time in the seventy-fifth Session of the United Nations General Assembly that China should strive to achieve carbon peak before 2030 and achieve carbon neutrality before 2060.Carbon emission reduction has become one of the important goals of the government.At the same time,under the influence of trade war,COVID-19 and geopolitical crisis,global energy security issues have become prominent,and improving China’s energy security has become one of the important goals of energy system reform in the future.Both carbon emission reduction and the improvement of China’s energy security are closely related to the green transformation of the industry.The green transformation of the industry can not only reduce the use of fossil energy and reduce carbon emissions,but also effectively reduce China’s dependence on foreign energy and improve domestic energy security.Therefore,this paper focuses on exploring the relationship between energy shock and industrial structure transformation and analyzing the impact of different financial policies on industrial structure transformation.This paper focuses on the following aspects.First,it analyzes the impact and mechanism of different energy shocks on the macro economy,and explores the role of industrial green transformation in improving energy security.Second,this paper studies the differences between carbon trading policies and carbon tax policies from the perspective of carbon pricing,and explores the role of financial friction in the impact of carbon pricing shocks on the macro economy.Thirdly,it studies the difference between predictable and unpredictable carbon tax policies,and analyzes the impact of different ways of using carbon tax revenue on macro economy and industrial transformation.Fourth,from the perspective of dual pillar,this paper analyzes the impact of different macro-prudential policies,different structural monetary policies and different combinations of dual pillar policies on industrial green transformation and financial stability.The main conclusions of this paper are as follows:First,exogenous energy shock will have a significant negative impact on China’s economy.Different energy shocks have different impact mechanisms.Among them,exogenous coal shock will mainly affect the total output by affecting thermal power generation.Due to the incomplete liberalization of power price in China,the increase of thermal power generation cost will lead to the decline of thermal power generation,and then lead to the shortage of power supply for industrial production and the decline of output.Exogenous oil shock mainly affects the total output by affecting monetary policy.Different from coal,oil is widely used,and its price rise has a significant impact on the price of industrial products,which will lead to a certain degree of monetary policy tightening and a decline in the total output.Based on counterfactual analysis and welfare analysis,we find that exogenous coal shock can be alleviated by green industrial transformation,and exogenous oil shock can be alleviated by establishing strategic cooperation and green industrial transformation with oil-rich countries.Industrial green transformation is not only helpful to achieve carbon emission reduction,but also can effectively improve China’s energy security.Second,both fixed price carbon tax policy and floating price carbon trading policy will have a certain negative impact on macroeconomic and financial stability in the short term,but in the long run,it will help the economy to achieve high-quality development and promote the economy to reach a higher equilibrium level.By combining carbon pricing policy with carbon trading policy(in this paper,the upper and lower limits of carbon trading price are mainly set in the trading policy),the economic fluctuations caused by the progress of carbon emission reduction technology can be effectively alleviated and the carbon trading market can better adapt to the current technological environment.In included in the financial sector risk of default,found that the financial sector assets held by financial accelerator effect,as a result of price under the frame and the financial sector risk aversion effect will enlarge carbon pricing policy impact on the macro economy,while the double pillar policy into carbon emissions reduction targets can to a certain extent,ease the short-term negative impact caused by carbon pricing policy.Under the carbon pricing policy,China’s inflation rate will rise to a certain extent in the short term,but this is mainly due to short-term inflation caused by structural adjustment.Monetary policy can improve the tolerance of such inflation in the short term.At this point,Inflation caused by such structural changes can be fundamentally addressed by increasing the supply of green goods and thus the productive capacity of the economy as a whole.Third,the unpredictable carbon tax policy will lead to a direct economic recession in the short term,while the predictable carbon tax policy is different from the unpredictable carbon tax policy.The predictable carbon tax policy has a positive first and then negative impact on the macro economy and carbon emissions,mainly because of the green paradox effect.In other words,when enterprises expect that emission reduction policies will lead to less and less valuable fossil resources held in the future,they will increase the use of fossil resources at present,thus leading to a significant increase in carbon emissions and output in the short term.Further subdivided by industrial structure,increase of fossil energy and fossil unit elasticity of substitution between intermediate products,increase the elasticity of substitution between clean energy and fossil energy or increase downstream green product of the final product market share can increase carbon tax reductions,at the same time,to a certain extent,reduce the volatility of the economy.After considering the use of a carbon tax policy purposes,found that the carbon tax revenues to subsidize clean energy sector,the upstream biggest carbon emissions,the carbon tax revenues to subsidise downstream green products division,the negative impact of carbon emission reduction policy in macroeconomic minimum,when a tax on downstream brown products division,although declines to carbon emissions than a carbon tax,However,its negative impact on the economy is small,and it is helpful to adjust the economic structure and enhance the policy effect of carbon tax.Fourth,macro-prudential policy in support of the green industry development,through increasing support for green industry sector can effectively improve the green investment,promote economic growth,but the brown department asset grounding risk effect is not big,and by increasing punishment for brown sector can effectively relieve the brown department of grounding risk assets,However,at this time,it will have a certain negative impact on the macro economy,which makes it necessary to use both green support policies and brown punishment policies to achieve a balance between stable growth and risk prevention in the early stage of industrial transformation.By moving the macro-prudential policy further subdivided into different risk weighting factor,the difference of credit policies and the difference in the reserve requirement ratio,found that after the difference in the reserve requirement ratio policy helps to support the development of green risk weighting factor policy more helpful in maintaining financial stability,credit constraints policy will encourage risk in the financial sector and non-financial sectors.Among them,the risk weighting factor policy and differential reserve ratio policy affect the financing activities of enterprises mainly by changing the risk premium of assets,while the credit constraint policy affects the financing activities of enterprises mainly by the way of financing.In the process of financial support for the development of green industry,we also need to guard against the green technology bubble.When the market share of green industry is small,the negative impact of green technology on the macro economy is small,but with the continuous expansion of the scale of green industry,its impact will increase.Fifth,for structural monetary policy,the central bank directly buy in the market of green assets to the total output and the influence of green investment is the largest,and for the central bank refinancing policy and green assets held by the central bank to buy bank policy,the central bank refinancing impact on macroeconomic policy is to be significantly weaker than the central bank to buy green assets held by the bank,And the impact on green investment is significantly more than the latter.For structural monetary policy and macro-prudential policy collocation,prepare while refinancing policy difference and green green policies are tie-in,refinancing policy bank leverage and macroeconomic impact is small,the impact on the green investment is moderate,when the central bank to buy non-bank green assets held by the main body and green difference reserve ratio policy collocation,can drive the green investment is larger,The impact on financial risk is also modest.For green assets held by the central bank to buy bank policy,when its paired with green risk weighting factor policy can effectively stabilize the financial system,but have less effect on the green investment,when its difference with green reserve policy goes with green credit policy,their effects on green investment is larger,but the impact on the economic and financial volatility is higher also,This shows the need to strike a balance between economic volatility,financial stability and the development of green industries when choosing the policy of the central bank buying green assets held by banks.