Simulation Of The Dynamic Impact Of Carbon Tax Policy And Tax Rate Ranges

In May 2021,the Ministry of Ecology and Environment of the People’s Republic of China submitted the "Environmental Protection Tax Law of the People’s Republic of China(Draft for Review)",which included carbon tax as a tax item of environmental tax.In July,the Ministry of Finance made a statement on the timely introduction of carbon tax,and the National People’s Congress also carried out discussions on the levy scheme of carbon tax rate.As carbon tax is about to be launched as a carbon economic policy,it is important to simulate the dynamic impact of carbon policy on economy and environment before that,and explore the applicable tax rate range for carbon tax levy,which is an important reference for policy formulation.In this paper,in the context of carbon trading and carbon tax,we combine the dynamic stochastic general equilibrium(DSGE)model and construct a China’s foursector environmental dynamic stochastic general equilibrium(E-DSGE)model that includes the environment,households,enterprises,and government,and carry out policy simulations of carbon tax and carbon allowances under technology shock,carbon tax shock and production tax shock through MATLAB programming,and analyze the impact of economic operation as well as carbon emission,after which we combine the scenario analysis to compare the impact of different carbon tax rates and carbon allowances,analyze and predict the carbon tax rate interval needed for carbon neutrality.The impulse response and scenario analysis of this research show that:(1)Technological progress and carbon tax rate fluctuations are pro-cyclical with economic development and environmental improvement,among which the impact of technological progress is more lasting;(2)Production tax rate fluctuations are countercyclical with economic development and environmental improvement;(3)Fixed carbon emission cap policy is effective in the long term and has little impact on the economy,while carbon tax can more effectively reduce the growth rate of carbon emissions,but there is a small short-term impact on economic development(4)Considering the amount of real GDP that can be lost,the maximum tax rate range of carbon tax before 2035 is between 4.7% and 8.44%,corresponding to a carbon price of188 to 337.6 yuan/ton;(5)To achieve carbon neutrality with reduced economic impact,the carbon tax rate should be approximately between 2.3% and 13.9%,corresponding to a carbon price of 92 to 556 yuan/ton;(6)Total carbon emission control has less impact on the economy,and the total emission target can be set flexibly according to the economic development and(6)Total carbon emission control has less economic impact,and the total target can be set flexibly according to the needs of economic development and environmental governance.Based on the above conclusions,four policy recommendations are proposed:(1)Use the combination of multiple tax types to achieve neutral taxation;(2)Combining multiple carbon policies can complement each other;(3)Improve the new energy subsidy system to accelerate industrial construction;(4)Improve the information disclosure mechanism for carbon emission projects.