A Study On The Impacts Of Carbon Dioxide Emission Reduction On Production Networks

This paper incorporates the carbon dioxide emission reduction,production network and macroeconomic fluctuations into a unified analysis framework.the carbon emission reduction target is regarded as a long-term constraint,and the production network is dynamically evolving under the constraint with impacts on business cycle.Firstly,5 detailed input-output tables from 2002 to 2018 of China was used to study industrial linkages,structural characteristics,probability distribution and the propagation mechanism of production network.Then,five emission reduction scenarios were set: unconstrained scenario,current policy scenario,enhanced policy scenario,2°C scenario and 1.5°C scenario.Finally,according to the assumptions of five scenarios,the RAS method was used to construct input-output tables for different scenarios in 2030 and2050.The study finds that China’s production network has a small diameter and high density,which has a significant propagation effect on microeconomic shocks.Weighted degree,weighted outdegree and weighted indegree of nodes approximately obey the exponential distribution,rather than the Pareto distribution assumed by most existing literature.Both the empirical results and the simulation results show that as the economy grows,the parameter of the exponential distribution of the production network decreases while the propagation effect increases,indicating that the macroeconomic fluctuations may increase.Scenario comparison shows that as emission reduction efforts increase,the industrial linkages,weighted degree,and propagation effect of the production network first increase and then decrease.In addition,the impact of emission reduction policies on the production network will diminish over time.Therefore,reducing emissions is always better than not reducing emissions,because the economic loss caused by emission reduction is temporary,and once a low-carbon economic structure is formed,it will automatically continue and no longer have an impact on economy.However,the emission reduction policy must avoid extremes,since the losses caused by no emission reduction at all and maximum emission reduction are both huge.This research shows that the enhanced policy scenario and the 2°C scenario are relatively appropriate emission reduction policies for China,which can not only achieve the low-carbon economy,but also minimize the economic losses during the transition process.