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Can China afford to commit to effective carbon pricing policies?
The paper assesses how different carbon tax rates (10 and 100 yuan/tCO2) affect various Chinese industrial sectors. It finds that while a low carbon price is a safe starting point, a higher price of 100 yuan/tCO2 would significantly impact energy-intensive sectors like ferrous metals and electricity, potentially reducing GDP by 1.1% unless revenue is redistributed to stimulate consumption. The study highlights the electricity sector as the primary driver for CO2 emission reductions and suggests that targeted carbon pricing for energy-intensive sectors could be more efficient than a nationwide policy.
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Document type: Research paper