Research On The Inflationary Effects Of The Constraint Of Tradeable Carbon Quotas In China

In the process of negative externality governance,the tradable carbon quota system is not only an institutional arrangement that is compatible with constraints and incentives,but also an action plan to privatize social costs,which can maximize the convergence of private costs and social costs,so as to overcome market failures caused by externalities.This means that the implementation of the tradable carbon quota system will inevitably lead to a general change in the cost function of micro subjects in economic activities,and the general change of the cost function of micro subjects will inevitably bring about changes in the macro price system,thus bringing about inflation effects.From the regional pilot in 2013 to the establishment of a national unified carbon trading market in 2021,China’s tradable carbon quota system has been fully promoted.Due to the limited scope and asymmetric competition,the inflation effect of the pilot tradable carbon quota system may not be obvious,so when fully promoted,whether China’s macro price system and the overall price level will change and how to change,these issues are worthy of in-depth study and discussion.On the basis of the systematic review of the relevant research literature,this paper takes the full implementation of the tradable carbon quota system as the background,from the perspective of privatization of social costs in the governance of externalities,through the investigation of the cost function of microeconomic entities such as residents and enterprises,explores the behavior choices of microeconomic entities with different characteristics under the tradable carbon quota system;and further explores the demand effect and price effect of high carbon emission products under the tradable carbon quota system according to the economic and technical links between the product production chain and the industry;under the framework of dynamic stochastic general equilibrium theory,the DSGE model containing carbon trading price is constructed,and after the parameter calibration,the impact analysis and steady-state exploration of inflation effect under China’s comprehensive tradable carbon quota system are carried out by Bayesian estimation method,and some conclusions with important practical guidance value are obtained.The results show that:(1)the full implementation of the tradable carbon quota system in China has changed the composition of the cost function of microeconomic actors,resulting in changes in the behavior choices of microeconomic entities;(2)the economic and technical connection between products and industries determines the full implementation of the tradable carbon quota system in China,resulting in the comprehensive adjustment of the product price system;(3)the full implementation of the tradable carbon quota system in China,used in combiantion with monetary policy,could get a better regulation to infaltion and consumption.