CGE Simulation for Levying Carbon Tax in China and International Experience of Levying Carbon Tax

Levying carbon tax is conducive to reducing carbon dioxide emissions and protecting the environment.The author firstly reviewed some relevant empirical studies on carbon tax both home and abroad,and then established the CGE model and simulated levying carbon tax in China.The study found that levying carbon tax would have little impact on China’s economy:in a short-term,China’s GDP might decrease by 0.51%,while in a long-term it might decrease by 0.08%;however,the carbon dioxide emissions would be substantially reduced.Meanwhile,levying carbon tax has some negative impact on the output of each industry in the very economic structure;of this,the mineral extractive industries would be influenced the most.Then the author summarized experience of levying carbon tax in foreign countries.     

Environmental Capital,Negative Externality and Carbon Finance Innovation

In the context of global climate change,the internalization of negative externality,which is brought about by the traditional mode of economic growth,has become an inevitable choice.In order to achieve the internalization,it is necessary to make innovations on the market mechanism and system,find the value of environmental capital,establish a new mode of economic growth based on environmental capital,and then transform the environmental capital,an exogenous factor of economic growth,into an endogenous factor.Of this,the key of market mechanism and system innovation is the financial innovation that is based on environmental capital and negative externality;the government defines the initial property right of environmental resources and establishes environment energy trading market,so as to guide enterprises to trade environmental resources(represented by carbon emission permit trading) based on the Clean Development Mechanism,and to vigorously develop environmental finance and carbon finance.     

Consideration of some key issues of carbon market development in China

The global carbon market has developed rapidly with two significant trends of globalization and financialization.Deriving economic interest is a nation driven-force behind the international climate negotiation and carbon market.According to deeply analyzed relationships between the carbon market and the key subjects of the climate negotiation,this article reveals that promoting the development of the global carbon market is one of the core interests of developed nations.Based on the background of international carbon market development and domestic carbon market pilots,four suggestions to the key issues of China’s carbon market are provided.The first is that the goal of China’s carbon market should be in line with and contribute to the national objectives and policies addressing climate change.The second is that the Chinese carbon market should mainly target the emission reduction of production-sectors,and contribute to their upgradation and transformation.The third is mat the development of the nation-wide carbon market in China should first take the principle of unbalanced regional development into consideration.The fourth is that linking China’s carbon market to the international market should keep steps in line with international opening-up of China’s financing system.     

Target Gap of Emission Reduction for China:Analysis based on Elastic Decoupling

The present paper analyzes historically the relationship between carbon emission and economic development by different stages through adopting elastic decoupling methods and Tapio evaluation criteria along with a comparison with the national Five Year Plans. The analysis shows that the influencing factors to the relationship between carbon emission and economy in China are different, and economic development and carbon emission have less connection in the recent 30 years of reform and opening-up in China. It is a difficult task to realize the promise that we will reduce carbon emission by 40%-50% in 2020 based on the data from historical experience and different expectations for economic development from economists. Through constructing the calcula- tion model of carbon emission intensity gap according to different development scenarios, the analysis shows that economic growth, infrastructure investment and further development of industrial-ization are the main drivers to the increase of carbon emission, technological progress, and particularly, the reduction of energy consumption is the primary means to reduce carbon emission in China. It is imperative to transform the economic growth pattern, and it is a grand task to perform and there is a long way to go for China to maintain economic growth and reduce carbon intensity.     

Controversy of International Carbon-motivated Border Tax Adjustment and Its Impact on China’s Manufacturing Industries

Carbon-motivated border tax adjustment (BTA) aims to compensate for the loss of competitiveness of carbon intensive products due to carbon dioxide abatement actions.Based on the analysis of the international background of carbon-motivated BTAs,this paper discusses the fundamental motivation leading to US policy transformation,the potential impacts of the policy on China’s manufacturing industries,and the compatibility of the policy to WTO rules.Carbon-motivated BTAs violate the fundamental principle of the UNFCCC,and potentially conflict with the core WTO principle of non-discrimination reflected in the GATT Articles I and III.However,Article XX of the GATT may be applicable.Thus,the author suggests several measures to alleviate the impacts of carbon-motivated BTAs,and puts forward countermeasures based on carbon consumption per capita.     

Has EU ETS caused carbon leakage in the EU carbon-intensive industries?A study from the perspective of bilateral trade

Reducing carbon leakage is one of the important reasons that was put forward by the EU for their border adjustment tax proposal.However,there are not many empirical evidences supporting significant carbon leakage in the EU carbonintensive industries.This paper applied the structural breakpoint test for the time series of import and export of cement,aluminum,and steel between EU and China.No significant structural changes were detected in the import and export of cement and aluminum.However,there proved to be two breakpoints,i.e.,2003 and 2008,in the import and export of steel,in which at the second point the overall level of steel import increased.Furthermore,Granger causality test was applied to the carbon price from European Climate Exchange and the import and export of steel.It was found that the carbon price was the Granger cause for the changes of steel import,but not the Granger cause for the export.The results of the study showed that the impacts of EU ETS on the EU carbon-intensive industries were limited.Among the three industries,partial evidence of carbon leakage was only found in the steel industry.Therefore,reducing carbon leakage could not serve as a convincing justification for border adjustment tax.     

The Factor Decomposition on Carbon Emission of China——Based on LMDI Decomposition Technology

Carbon emission is the current hot issue of global concern. How to assess various contributing factors for carbon emission is of great importance to find out the key factors and promote carbon emission reduction. In this paper, the author constructs an identical equation for carbon emission, based on the economic aggregate, the economic structure, the efficiency of energy utilization, the structure of energy consumption, and the coefficient of carbon emission; by applying to LMDI decomposition technology, the author analyzes the carbon emission of China from 1995 to 2007 at industrial level and regional level. The results show that the expansion of economic aggregate is the main reason for China’ s rapidly increasing carbon emission and the increase of energy utilization efficiency is the key factor that can hold back the increase of carbon emission. In addition, the change of industrial structure or regional structure and the change of traditional energy structure have limited influence on the carbon emission, and their potentials have not yet been exploited. At the end of this paper, the author proposes the efforts that China should make to reduce carbon emission.     

The Concept and Theoretical Implications of Carbon Emissions Rights Based on Individual Equity

Climate change has become a hot topic in international environmental negotiations.For post-Kyoto international climate regime negotiations,many countries have proposed a variety of frameworks to share the emission reduction responsibilities and allocate carbon emission rights,and have tried to quantify the emission reduction obligations of all countries based on the perspectives of international equity and individual equity.In this paper,the authors have distinguished the concepts of carbon emissions rights based on these two perspectives respectively,have analyzed the relationship between carbon emissions per capita and economic development,and have calculated and compared the proportion of cumulative emissions per capita of different countries in history and future,and then authors conclude that emission reduction obligations should be allocated based on each country’s conditions,including historical emissions,development stage,and future demands.Developed countries should take the initiative to significantly reduce their emissions because they have already accomplished their industrialization process.However,developing countries are still in the process of industrialization,which requires more emission rights to meet their development needs.For China,the concept of carbon emissions based on individual equity can be used as a theoretical tool for the allocating the international carbon emissions rights.     

Influences of Border Carbon Adjustments on China’s Foreign Trade

The EU, the United States and other economies, with the intention to implement unilateral trade measures Border Carbon Adjustments, impose emission reduction pressure on developing countries. Once implemented, the measures will have great impact on China’s foreign trade. Using the input-output table in 2007, this paper had analyzed the influences on China’s foreign trade as a whole and sub-sectors in three tax rates scenarios. The results showed that the tariff level of China’s exports will increase by 3.6%-6.3% if the tax was levied on exports embodied emissions, and by 1.0%-1.7% if levied on export direct emissions. In 2007, the former total amount of carbon tax was about US$42.6-73.0 billion, 4 times that of the latter. Based on export embodied emissions, sectors largely influenced were non-traditional energy intensive ones, such as textile, et al. These sectors should be encour-aged to carry out industrial upgrading, raising the value-added of export goods, and reducing their embodied emissions by reduction of energy intensity. Taking into account of the complexity of data collection, the tax levied on products direct emission is more operational. The results showed that the five top sectors most affected were other chemical materials, processing of petroleum and nuclear fuel, coking, smelting and rolling of ferrous metal and textile. Most of them were energy intensive sectors. Therefore, adjusting export products structure, and controlling too fast development of energy intensive industries are also important strategies in China.     

Discussion on the Mode of China＇s Low-carbon Society and Construction Routes

In responding to global climate change, the idea of low-carbon economy emerges as the times require. Developing low - carbon economy is based on the construction of low-carbon society. The so called ＂t...     

Effect analysis of carbon trading on Economy-Energy-Environment system and calculation of reasonable carbon price intervals

This paper constructs a 4-lier computable general equilibrium model which includes such modules as modeling carbon emission constraints and carbon trading(CT),and incorporates the cost of carbon emissions into constant elasticity of substitute production function.Under scenario settings under different carbon abatement targets,based on 2007 national social accounting matrix and related statistical data about energy consumption and carbon emission,effects on economic outputs,energy consumption,and carbon abatement are estimated and analyzed at both macro and sector level.By calculating selected novel indicators that compromise between macroeconomic opportunity cost and achievable carbon abatement,reasonable carbon price intervals are given for enhancing the robustness and liquidity of carbon market.Further,by decomposition and share-weighted methods,expected carbon abatement and energy price are measured and analyzed in details.Some results are meaningful for fundamental design of the future carbon market.Given constant energy utilization and carbon abatement technologies at the macro level,the higher the carbon price the more actual carbon abatement;the more gross domestic product loss,the less energy consumption.Accwding to the overall situation estimated for 2007 in China,the advice given is to introduce a carbon abatement target rate(R_c)of-10%,which is helpful to make carbon market stable against unexpected carbon price shocks between[6.9,35]/tC with less economic loss.According to Kaya decomposition,after introduction of carbon pricing,carbon abatement is mainly contributed by the effects of energy intensity(EI)and technical progress.Further,CT may help reduce energy consumption and induce transformation to a low-carbon energy structure.At the sector level,the introduction of CT could induce economic recession in all sectors,especially energy.However,the overall economic structure remains unchanged to some extent.CT will help reduce energy consumption in all sectors,especially energy.Overall utilization costs of the energy composite can be divided in two,market price and carbonrelated costs.Carbon-related costs mainly contribute to variation in the utilization cos of the energy composite;carbon pricing may help non-energy sectors achieve sufficient carbon abatement by pushing up energy utilization cost.However,despite achievable carbon abatement by the energy sector being relatively high,induced by carbon pricing,there is still significant potential for other incentive policies to stimulate further abatement,such as energy resources taxation and transportation fuel taxation,especially in the sectors of coal and transportation.Finally,some advice is proposed in regard to policy decisions and further research.     

Towards a new climate economics:research areas and prospects

International cooperation to address climate change now stands at a crossroads.With a new international regime for emissions reduction established by the Durban Platform, "New Climate Economics(NCE)" has become a research hotspot.The need for urgent action to combat climate change has prompted discussion on reforms of economic growth patterns and the energy system.The industrial civilization,therefore,now faces a transition towards a new pathway for ecological sustainability.NCE explores new economic concepts,theories,and analytical methods to design a balanced pathway for sustainable growth and emission reduction.Instead of getting trapped in discussions on allocation of emission reduction responsibilities and obligations among countries,NCE pays more attention to developing win-win multilateral cooperation mechanisms that facilitate collaborative RD and knowledge sharing.In addition,NCE studies incentives for low-carbon transition,turning carbon emission reduction into a domestic need for countries to increase their international competitiveness.To achieve the 2°C target,most countries around the world face challenges of insufficient emission allowances to cover expected emissions associated with their projected economic growth.As carbon emissions rights becomes an increasingly scarce resource,increasing the carbon productivity of the economy turns to be the critical path to address the dilemma of green or growth.NCE studies the historical evolution of carbon productivity for countries at different development stages as well as ways to enhance such carbon productivity.This type of study provides invaluable lessons for emerging economies to reach their own emission peaks without losing the momentum of growth.Replacing fossil fuels with new and renewable energy has proven to be an inevitable choice for reshaping the energy system and addressing climate change- it has already become a global trend.NCE studies incentives for new energy technology innovation and deployment provided by carbon pricing,and sheds light on the co-benefits of climate change mitigation,such as resource conservation,environmental protection,and energy security.The role of carbon pricing in promoting intemational RD cooperation and technical transfer will also be studied.The shift in consumption patterns is another key factor enabling a low-carbon transformation.Therefore,NCE also explores the theoretical work on new values of wealth,welfare and consumption,new lifestyles in the context of ecological civilization,concepts and implementation of low-carbon urban planning in developing countries,and the impacts of consumption pattern changes on social development,material production,and urban infrastructure construction.     

Quantitative Evaluation on Urban Ecosystem Carrying Capacity in Tianjin Binhai New Area

Based on the concept of ecosystem carrying capacity, the indicator system of quantitative assessment was set up, which consisted of support indicator system and pressure indicator system. And the factor analysis method was used to screen the indicator system. Different from the traditional indicator weight determination based on the absolute values of the coefficients of regression equation, the squares of factor loadings in the rotated component matrix were attempted to determine the weights of 40 assessment indicators. The result shows that ecological support system and pressure system in Binhai New Area are relatively balanced among six years, and the developing level of urban ecosystem is basically healthy on the whole. However, due to continuously increasing pressure of the resources consumption caused by the rapid growth of the second industry, which is the Leading Industry of Binhai New Area, the ecosystem carrying capacity reached the minimum in 2005.     

Vulnerability Assessment of Snow Disaster Based on Traffic System： A Case Study of Chenzhou City in Hunan Province, China

The article establishes the patterns of urban snow disaster system and disaster chain based on the theory of regional disaster system. The patterns indicate that urban snow disaster is exacerbated mainly through the traffic system. In addition, the paper sets up the vulnerability assessment index system and synthetically vulnerability assessment model of urban snow disaster which are mainly based on traffic system, and applies them in Chenzhou City. The results of assessment indicate that obvious geographical differences exist in the vulnerability of snow disaster bearing bodies： vulnerability of Chenzhou section of the Beijing-Zhuhai expressway is the highest in Chenzhou City, and the southeastern counties are more vulnerable than the northwest region. Furthermore, according to the snow disaster vulnerability dynamic process analysis, the vulnerability of Chenzhou City obviously increased in 2008 winter compared with that in 2007. Finally, the paper presents some suggestions for the locations of the emergency commands and the reserves of relief materials based on the evaluation results, and points out that disaster monitoring and relevant technical level should be strengthened for the minimization of traffic system＇s vulnerability.     

Population Growth,Available Resources,and Quality of Life:China’s Post-Reform Economic Development

Two opposing intellectual traditions and their contem-porary developments regarding the relations among population, available resources, and quality of life as reflected in economic growth are reviewed. What is at issue is whether population growth is detrimental to or beneficial for economic development. Neither of the extreme views gives a complete picture of the interplay among population, resources, and quality of life. Following previous literature on the topic, this paper establishes a more balanced approach that considers the function linking population and quality of life not constant but variable and regards the limitedness of resources as not absolute but relative to regions and societies. The proposed approach is more flexible in better explaining the relation between population and economic growth. China is examined as a case in point to shed light on the interaction of population growth, economic development, and available resources, and its recent post-economic reform experiences showcase the appropriateness of the synthetic approach.     

Global Research Trends Related to CO2 Emissions and Their Enlightenment to China

Given the growing awareness of the likely catastrophic impacts of climate change and close association of climate change with global emissions of greenhouse gases (of which carbon dioxide is more prominent) , considerable research efforts have been devoted to the analysis of carbon dioxide (CO2) emissions and its relationship to sustainable development. Now GHG reduction programs have been coming into effect in many developed countries that have more responsibility for historical CO2 emissions, and the studies have become mature. First, the GHG emissions accounting system is more all-inclusive and the methods are more rational with the effort of IPCC from 1995 and all other researchers related. Second, the responsibility allocation is more rational and fair. Along with the clarity of "carbon transfer" and "carbon leakage", the perspective and methodology for allocating regional CO2 emissions responsibility is turning from production base to consumption base. Third, the decomposition method has become more mature and more complex. For example, the decomposition formulas are including KAYA expression and input-output expression and the decomposition techniques are developed from index analysis to simple average divisia and then adaptive-weighting divisia. Fourth, projection models have become more integrated and long-term. The top-down model and bottom-up model are both inter-embedded and synergetic. Trends above give some advice for the research on CO2 in China, such as emissions factors database construction, deeper-going research on emissions responsibility and structure analysis, promotion of modeling technology and technology-environment database.     

Carbon Budget Proposal： An Institutional Framework for an Equitable and Sustainable World Climate Regime

Consensus on reducing greenhouse gas emissions has been reached at the technical and political level.However,as the issue involves economic costs and the right to develop,the international institutional framework for addressing greenhouse gas emissions has consistently failed to balance the demands of impartiality and sustainability.However,a sustainable carbon budget proposal is undoubtedly achievable if the global carbon budget (the total amount of carbon permitted by climate security) is made an absolute constraint.If a preliminary distribution was made among the world’s population on a per capita basis,the total limited global carbon budget could not only meet basic needs but also ensure the proposal’s equitable.Taking into account historical emission levels and future needs,we should carry out carbon budget transfer payments and devise a corresponding funding mechanism to ensure efficient allocation under the proposal.Unlike the phase-by-phase progress and provisional goals of the Kyoto Protocol,the carbon budget proposal outlined above is a comprehensive and holistic package.Due to the politicization of the climate change issue,however,many technical issues can only be worked out through international political and diplomatic negotiations.     

China’s Transition to a Low-Carbon Economy:2006-2010

China achieved major progress in low-carbon development during the period of the 11th Five Year Plan (2006-2010). The increasing trend of energy intensity and carbon intensity of the economy as seen prior to 2005 was reversed to a sharp decreasing trend, leading to a 19% decrease in energy intensity and 21% decrease in carbon intensity in five years. The enhanced energy efficiency, mostly due to efficiency improvement in power and manufacturing sector, is the major driver of the decrease in carbon intensity of the economy. The development of renewable energy, despite its impressive growth rate, played a minor role because of its small share in the energy mix of the country. Energy con-sumption and energy-related carbon emissions per unit of area in building continued to grow at a lesser rate, which, combined with the fast growth of total building volume, led to fast growth in total energy consumption and carbon emissions in the sector. Similar trend is observed in the transportation sector whose total energy use and carbon emissions continued to grow fast despite slight improvement in energy efficiency. Agricultural energy use experienced a slight change and forestry made a major contribution to carbon sinks. Policy and institutional innovations helped build a solid system of rules for low-carbon development. Improving cost effectiveness of the system remains a major challenge for the next five year plan period.     

Integrating Sustainable Development into Global Institutions： Reforming the United Nations

This article will briefly outline the origins, structure and functions of United Nations Environment Program and the Commission on Sustainable Development in the context of the goals of ecologically sustainable development （ESD）. Economic development, social development and environmental protection form the three interconnected parts of ESD. The achievements of the key UN environmental institutions and programs in opening up the global system to civil society, the private sector and a diversity of actors and interests, promoting the role of poverty alleviation as part of ESD through the Millennium Development Goals, and facilitating important Multilateral Environmental Agreements should be recognized. However, with these notable exceptions, organizations such as United Nations Environment Program and the Commission on Sustainable Development have become weak in scientific and technical leadership, global policy, co-ordination （inside and outside the UN） and has few achievements in the inter- national and national implementation of obligations and standards in Global Environmental Governance - including enforcement, compliance and effectiveness. This article will outline the key reasons for this inadequacy. Attention will also be focused on the way forward through of a new United Nations Environment Organization. This will require a clarification of purpose and function （within the UN system and as part of global governance structures） as well as consideration of whether it depends on system-wide UN reform. It is recommended that medium and long term strategies for reform are necessary.