Search Climate Insights Directory

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.

The report proposes the feebate as a technology-neutral, self-financing policy to increase vehicle efficiency without restricting consumer choice. RMI recommends a constant rate per gallon of fuel saved and the use of size classes to ensure fair comparison between vehicles. Analysis of 2005 vehicle data suggests that the number of size classes has a more significant fiscal impact on manufacturers than the specific attribute used to define those classes. The document also examines the legal landscape, suggesting that state-level feebates may avoid federal preemption under CAFE standards, and critiques Canada's Vehicle Efficiency Incentive for using a 'step function' rather than a continuous one.