The Effects Of Carbon Taxes On Petrochemical Industries In China

Heavy use of fossil fuel emissions to the atmosphere makes greenhouse gases increase, leading to global climate change and environmental change, which has become the focus of attention of international community in general environmental issues. At present, China has replaced the U.S. as the world's largest emitter of carbon dioxide, so it faces the increasing pressure on energy saving and emission reduction.Implementation of a carbon tax is one of the major ways to mitigate carbon dioxide emission. However, blanket taxes applied to all industries in China might not successful. This study aims to evaluate the effects of carbon taxes on different industries, and meanwhile to find an optimal carbon tax scenario for China's petrochemical industry. A fuzzy goal programming approach, integrated with ARMA prediction and input-output theory, is used to construct a model for simulating the carbon dioxide reduction capacities and economic impacts of three different tax scenarios.The results show that a carbon tax would worsen the economic situation of China's petrochemical industry, but a small amount of carbon dioxide emissions will be reduced. This work provides a valuable approach for researches on model construction and carbon dioxide reduction, since it applies the ARMA prediction to determine the boundary values of the fuzzy goal programming model, and furthermore it can take the economic interaction among industries in to consideration.