Impacts of U.S. Carbon Tariffs on China’s Foreign Trade and Social Welfare
- Univ. of Auckland, Auckland (New Zealand)
- China Univ. of Mining and Technology, Xuzhou (China)
- Jiangsu Normal Univ. Xuzhou (China)
- Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
- Tsinghua Univ., Beijing (China)
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.
- Research Organization:
- Pacific Northwest National Laboratory (PNNL), Richland, WA (United States)
- Sponsoring Organization:
- USDOE; National Natural Science Foundation of China (NSFC); Jiangsu Social Science Fund; National Key Research and Development Program of the Ministry of Science and Technology of China; China Scholarship Council
- Grant/Contract Number:
- AC05-76RL01830
- OSTI ID:
- 1608791
- Report Number(s):
- PNNL-SA-147922; SUSTDE
- Journal Information:
- Sustainability (Basel), Vol. 11, Issue 19; ISSN 2071-1050
- Publisher:
- MDPICopyright Statement
- Country of Publication:
- United States
- Language:
- English
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