Comparing the impacts of carbon tax and carbon emission trading, which regulation is more effective?. (15th March 2023)

• Record Type: Journal Article
• Authors: Xu, Haitao; Pan, Xiongfeng; Li, Jinming; Feng, Shenghan; Guo, Shucen
• Is Part Of: Journal of environmental management. Volume 330(2023)
• Publication Date: 2023-03-15
• Subjects: Carbon emission trading -- Carbon tax -- Environmental regulation -- Dynamic CGE model; Environmental policy -- Periodicals; Environmental management -- Periodicals; Environment -- Periodicals; Ecology -- Periodicals; 363.705
• DOI: 10.1016/j.jenvman.2022.117156
• Languages: English
• ISSNs: 0301-4797

Abstract

Abstract: While many literatures have examined the influence of environmental regulation policy, which environmental regulation policy is more effective is still controversial. Taking China and two different economic regions as samples, we explore the effect of two popular environmental regulation policies, that is carbon tax and carbon emission trading, by a multi-regional environmental dynamic computable general equilibrium model. The results show that for the economic development, the carbon emission trading outperforms the carbon tax for the carbon emission trading will generate the lower economic cost. But for the emission reductions, the carbon tax outperforms the carbon emission trading for the total emissions from 2020 to 2030 are smallest when introducing carbon tax policy. We further study the effect of environmental regulation on different industries. It is found that the environmental regulation has a more obvious effect on energy industry, heavy industry and transport service industry. Highlights: The impacts of carbon tax and carbon emission trading is compared in the study. The carbon tax policy will generate greater economic cost. For emission reductions, the carbon tax outperforms the carbon emission trading. Environmental regulation has a significant effect on energy industry and heavy industry.