Estimating the Effect of Carbon Tax on CO2 Emissions of Coal in China
Kezhong Zhang, Juan Wang, Yongming Huang
.
DOI: 10.4236/jep.2011.28127   PDF    HTML     4,397 Downloads   7,697 Views   Citations

Abstract

Using the co-integration model and the VAR model, this article estimates the effect of carbon taxes on CO2 emissions of coal in 2020. The estimation for the long-run price elasticity of coal in China is –0.34, which shows more elasticity than those of previous studies. The main reason lies in the fact that none of the previous studies considered the structural breaks of Chinese energy consumption in 2006. The levy of 100RMB, 150RMB and 200RMB on per ton of standard coal from 2012 in China will decrease the consumption of coal by 4.88%, 7.31% and 9.75% respectively in 2020, which will further lead to the decrease of CO2 emissions in 2020 by 8.69%, 13.02% and 17.36% respectively. This observation implies that the use of carbon tax scheme is one of the most practical policies that can mitigate the challenge of climate change. However, the implementation measures should be deliberately designed in such a way that making heavy impact on economic development of China is avoided.

Share and Cite:

K. Zhang, J. Wang and Y. Huang, "Estimating the Effect of Carbon Tax on CO2 Emissions of Coal in China," Journal of Environmental Protection, Vol. 2 No. 8, 2011, pp. 1101-1107. doi: 10.4236/jep.2011.28127.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1] P. Andrews-Speed, “China’s Ongoing Energy Efficiency Drive: Origins, Progress and Prospects,” Energy Policy, Vol. 37, No. 2, 2009, pp. 1331-1344. doi:10.1016/j.enpol.2008.11.028
[2] T. Wang and J. Watson, “Scenario Analysis of China’s Emissions Pathways in the 21st Century for Low Carbon Transition,” Energy Policy, Vol. 38, No. 3, 2010, pp. 3537-3546. doi:10.1016/j.enpol.2010.02.031
[3] N. R. Cooper, “A Carbon Tax in China? Department of Economics, Harvard University,” Working Paper, unpublished, 2004.
[4] F. Don and S. E. West, “Can Taxes on Cars and on Gasoline Mimic an Unavailable Tax on Emissions,” Journal of Environmental Economics and Management, Vol. 43, No. 1, 2002, pp. 135-157. doi:10.1006/jeem.2000.1169
[5] T. Nakata and A. Lamont, “Analysis of the Impacts of Carbon Taxes on Energy Systems in Japan,” Energy Policy, Vol. 29, No. 2, 2001, pp. 159-166. doi:10.1016/S0301-4215(00)00104-X
[6] A. Bruvoll and B. M. Larsen, “Greenhouse Gas Emissions in Norway. Do Carbon Taxes Work,” Energy Policy, Vol. 32, No. 4, 2004, pp. 493-505. doi:10.1016/S0301-4215(03)00151-4
[7] D. A. Hensher, “Climate Change, Enhanced Greenhouse Gas Emissions and Passenger Transport-What Can We Do to Make a Difference,” Transportation Research, Vol. 3, No. 2, 2008, pp. 95-111.
[8] K. Lutz, “The Economic Effects of Energy Price Shocks,” Journal of Economic Literature, Vol. 46, No. 4, 2008, pp. 871-909. doi:10.1257/jel.46.4.871
[9] D. Carol and T. Sterner, “Analyzing Gasoline Demand Elasticities: A Survey,” Energy Economics, Vol. 13, No. 1, 1991, pp. 203-218.
[10] A. M. Bento, L. H. Goulder, M. R. Jacobsen and R. H. Von Hae-fen, “Distributional and Efficiency Impacts of Increased U.S. Gasoline Taxes,” American Economic Review, Vol. 99, No. 3, 2009, pp. 667-699. doi:10.1257/aer.99.3.667
[11] J. Sivadasan and J. Slemrod, “Tax Law Changes, Income Shifting and Measured Wage In-equality: Evidence from India,” Journal of Public Economics, Vol. 92, No. 10-11, 2008, pp. 2199-2224. doi:10.1016/j.jpubeco.2008.04.001
[12] B. Jan, “An Empirical Analysis of Gasoline Demand in Denmark Using Cointegration Techniques,” Energy Economics, Vol. 16, No. 2, 2004, pp. 139-143.
[13] R. Ramanathan, “Short- and Long-Run Elastici-ties of Gasoline Demand in India: An Empirical Analysis Using Cointegration Techniques,” Energy Economics, Vol. 21, No. 4, 1999, pp. 321-330. doi:10.1016/S0140-9883(99)00011-0
[14] L. Garcia-Cerruti, “Estimating Elasticities of Residential Energy Demand from Panel County Using Data Dynamic Random Variables Models with Heteroskedastic and Correlated Error Terms,” Resource and Energy Economics, Vol. 22, No. 4, 2000, pp. 355-366. doi:10.1016/S0928-7655(00)00028-2
[15] P. Ferreira, I. Soares and M. Araujo, “Liberalisation, Consumption Heterogeneity and the Dynamics of Energy Prices,” Energy Policy, Vol. 33, No. 17, 2005, pp. 2244-2255. doi:10.1016/j.enpol.2004.05.003

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.