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Title: Impacts of U.S. Carbon Tariffs on China’s Foreign Trade and Social Welfare

Abstract

A recursive multisector dynamic computable general equilibrium (DCGE) model simulates the economic impacts of carbon tariffs, as proposed by the USA, ranging from $$\$$40/t to $$\$$60/t CO2. We examine a carbon tax and export subsidy as response policies to the U.S. carbon tariff, respectively. The dynamic model shows the possible impacts of these policies on China’s economic structure, carbon emissions, and social welfare from 2020 to 2030. Simulations show that a carbon tariff changes the structure of China’s exports and promotes trade diversion from the USA to other countries and regions. A domestic carbon tax and subsidy policy can dampen the adverse impacts of carbon tariffs on trade. A carbon tax shows an effective impact on increasing clean energy use, decreasing the carbon intensity of output, and reducing carbon emissions. A subsidy on exports to the USA reduces the adverse impact of a carbon tariff on China’s social welfare in the short term.

Authors:
 [1];  [2];  [3];  [1];  [4];  [5]
  1. Univ. of Auckland, Auckland (New Zealand)
  2. China Univ. of Mining and Technology, Xuzhou (China)
  3. Jiangsu Normal Univ. Xuzhou (China)
  4. Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
  5. Tsinghua Univ., Beijing (China)
Publication Date:
Research Org.:
Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
Sponsoring Org.:
USDOE; National Natural Science Foundation of China (NNSFC); Jiangsu Social Science Fund; National Key Research and Development Program of the Ministry of Science and Technology of China; China Scholarship Council
OSTI Identifier:
1608791
Report Number(s):
PNNL-SA-147922
Journal ID: ISSN 2071-1050; SUSTDE
Grant/Contract Number:  
AC05-76RL01830
Resource Type:
Accepted Manuscript
Journal Name:
Sustainability (Basel)
Additional Journal Information:
Journal Name: Sustainability (Basel); Journal Volume: 11; Journal Issue: 19; Journal ID: ISSN 2071-1050
Publisher:
MDPI
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY; carbon tariffs, response policy, carbon emissions, trade, energy structure

Citation Formats

Zhang, Wenwen, Xu, Shi-Chun, He, Zhengxia, Shape, Basil, Zhao, Bin, and Wang, Shuxiao. Impacts of U.S. Carbon Tariffs on China’s Foreign Trade and Social Welfare. United States: N. p., 2019. Web. https://doi.org/10.3390/su11195278.
Zhang, Wenwen, Xu, Shi-Chun, He, Zhengxia, Shape, Basil, Zhao, Bin, & Wang, Shuxiao. Impacts of U.S. Carbon Tariffs on China’s Foreign Trade and Social Welfare. United States. https://doi.org/10.3390/su11195278
Zhang, Wenwen, Xu, Shi-Chun, He, Zhengxia, Shape, Basil, Zhao, Bin, and Wang, Shuxiao. Wed . "Impacts of U.S. Carbon Tariffs on China’s Foreign Trade and Social Welfare". United States. https://doi.org/10.3390/su11195278. https://www.osti.gov/servlets/purl/1608791.
@article{osti_1608791,
title = {Impacts of U.S. Carbon Tariffs on China’s Foreign Trade and Social Welfare},
author = {Zhang, Wenwen and Xu, Shi-Chun and He, Zhengxia and Shape, Basil and Zhao, Bin and Wang, Shuxiao},
abstractNote = {A recursive multisector dynamic computable general equilibrium (DCGE) model simulates the economic impacts of carbon tariffs, as proposed by the USA, ranging from $\$40/t to $\$60/t CO2. We examine a carbon tax and export subsidy as response policies to the U.S. carbon tariff, respectively. The dynamic model shows the possible impacts of these policies on China’s economic structure, carbon emissions, and social welfare from 2020 to 2030. Simulations show that a carbon tariff changes the structure of China’s exports and promotes trade diversion from the USA to other countries and regions. A domestic carbon tax and subsidy policy can dampen the adverse impacts of carbon tariffs on trade. A carbon tax shows an effective impact on increasing clean energy use, decreasing the carbon intensity of output, and reducing carbon emissions. A subsidy on exports to the USA reduces the adverse impact of a carbon tariff on China’s social welfare in the short term.},
doi = {10.3390/su11195278},
journal = {Sustainability (Basel)},
number = 19,
volume = 11,
place = {United States},
year = {2019},
month = {9}
}

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