Simulations for double dividend of carbon tax and improved energy efficiency in the transportation industry

Abstract

The Chinese visional goal of achieving the “carbon peak” and “carbon neutrality” puts forward higher requirements for low-carbon development in the transportation industry. Seeking appropriate mitigation strategies to develop low-carbon transportation has been an important part of low-carbon economic development. This study develops a CGE model to analyze the impact of carbon-tax implementation on the transportation industry. It designs four carbon tax-recycling scenarios and simulates for double dividend of carbon tax policy. Then, it designs three scenarios including improved energy efficiency and a carbon tax to explore appropriate mitigation strategies combination. The carbon tax will reduce carbon emissions but it will also reduce sectoral outputs. However, carbon tax recycling can alleviate the negative impact on sectoral outputs, meanwhile achieving reducing carbon emissions. The energy rebound effect brought by improved energy efficiency will greatly reduce the carbon emissions reduction effect, but the carbon tax can promote the awareness of emission reduction of consumers and inhibit the energy rebound effect in the transportation industry. Therefore, at the same time of improved energy efficiency, carbon tax policies should be timely formulated to better promote the sustainable development of the varied transport sectors.

Appendix 1 Equation of the CGE model

Production block

$$U(PS)=\left(\frac{X\left(PS\right)}{AP\left(PS\right)}\right)\times {\left(\beta (PS)\times AP(PS)\times \frac{CX(PS)}{PU(PS)}\right)}^{sp(PS)}$$

(4)

$$PU(PS)=\frac{\sum_{CC}QX(CC,PS)\times PC(CC)}{U(PS)}$$

(5)

$$V(PS)=\left(\frac{X\left(PS\right)}{AP\left(PS\right)}\right)\times {\left(\gamma (PS)\times AP(PS)\times \frac{CX(PS)}{PV(PS)}\right)}^{sp(PS)}$$

(6)

$$PV(PS)=\left(\frac{1}{AV(PS)}\right)\times {\left(\frac{W}{{\gamma }_{L}(PS)}\right)}^{{\gamma }_{l}(PS)}\times {\left(\frac{R}{{\gamma }_{k}(PS)}\right)}^{{\gamma }_{k}(PS)}$$

(7)

$$QX(CC,PS)=ut(CC,PS)\times U(PS)$$

(8)

$$PX(PS)=\sum_{CC}vt(PS,CC)\times PQ(CC)$$

(9)

$$L(PS)={\gamma }_{L}(PS)\times \frac{PV(PS)\times V(PS)}{W}$$

(10)

$$K(PS)={\gamma }_{K}(PS)\times \frac{PV(PS)\times V(PS)}{R}$$

(11)

$$CX(PS)={AP(PS)}^{-1}\times \left(\sum_{PS}{\beta (PS)}^{sp(PS)}\times {PU(PS)}^{1-sp(PS)}+{\gamma (PS)}^{sp(PS)}\times {PV(PS)}^{1-sp(PS)}\right)\frac{1}{1-sp(PS)}$$

(12)

$$UEN(PS)=ut1(PS)\times U(PS)$$

(13)

$$UNEN(PS)=ut2(PS)\times U(PS)$$

(14)

$$QXEN(CC,PS)=\left(\frac{UEN\left(PS\right)}{APEN\left(PS\right)}\right)\times {\left(\beta (CC,PS)\times APEN(PS)\times \frac{CXEN(PS)}{PQXEN(PS)}\right)}^{spen(PS)}$$

(15)

$$QXNEN(CC,PS)=utnen(CC,PS)\times UNEN(PS)$$

(16)

$$PQXEN(CC)=PC(CC)+PCO2\times emf(CC)$$

(17)

$$CXEN(PS)={AP(PS)}^{-1}\times \left(\sum_{CC}{\beta (CC,PS)}^{sp(PS)}\times {PQXEN(CC)}^{1-spen(PS)}\right)\frac{1}{1-spen(PS)}$$

(18)

Trade block

$$Q(CC)=\sum_{PS}vt(PS,CC)\times X(PS)$$

(19)

$$QD(CC)=\left(\frac{Q\left(CC\right)}{AT\left(CC\right)}\right)\times {\left(\varepsilon (CC)\times AT(CC)\times \frac{PQ\left(CC\right)}{PQD\left(CC\right)}\right)}^{st(CC)}$$

(20)

$$EXP(CC)=\left(\frac{Q\left(CC\right)}{AT\left(CC\right)}\right)\times {\left((1-\varepsilon \left(CC\right))\times AT(CC)\times \frac{PQ(CC)}{PEXP(CC)}\right)}^{st(CC)}$$

(21)

$$QD(CC)=\left(\frac{Q\left(CC\right)}{AA\left(CC\right)}\right)\times {\left(\delta (CC)\times AA(CC)\times \frac{PC(CC)}{PQD(CC)}\right)}^{sa(CC)}$$

(22)

$$IMP(CC)=\left(\frac{QC\left(CC\right)}{AA\left(CC\right)}\right)\times {\left((1-\delta \left(CC\right))\times AA(CC)\times \frac{PC(CC)}{PIMP(CC)}\right)}^{sa(CC)}$$

(23)

$$PIMP(CC)=EXR\times wpi(CC)$$

(24)

$$PC(CC)\times QC(CC)=PQD(CC)\times QD(CC)+PIMP(CC)\times IMP(CC)$$

(25)

$$PQ(CC)=\left(\frac{1}{AT\left(CC\right)}\right)\times {\left(\varepsilon {\left(CC\right)}^{st\left(CC\right)}\times {PQD\left(CC\right)}^{1-st\left(CC\right)}+{\left(1-\varepsilon \left(CC\right)\right)}^{st\left(CC\right)}\times {PEXP(CC)}^{1-st(CC)}\right)}^{1-st(CC)}$$

(26)

$$\begin{array}{c}PQ(CC)=PQD(CC)\\ PC(CC)=\left(\frac{1}{AA(CC)}\right)\\ \times {\left({\delta (CC)}^{sa(CC)}\times {PQD(CC)}^{1-sa(CC)}+{(1-\delta \left(CC\right))}^{sa(CC)}\times {PIMP(CC)}^{1-sa(CC)}\right)}^{\frac{1}{1-sa(CC)}}\end{array}$$

(27)

$$PQD(CC)=PEXP\left(CC\right)$$

(28)

$$PEXP(CC)=PQD(CC)$$

(29)

$$PEXP(CC)=EXR\times wpe(CC)$$

(30)

Income and expenditure blocks

$$HC(CC)=\frac{{\alpha }_{h}(CC)\times HY}{PC(CC)}$$

(31)

$$GC(CC)=\frac{{\alpha }_{\mathrm{g}(CC)\times GY}}{PC(CC)}$$

(32)

$$\sum_{CC}PC(CC)\times HC(CC)+HS=W\times LS+R\times KS$$

(33)

$$GY=\sum_{PS}rpt(PS)\times PX(PS)\times X(PS)+\sum_{CC}rdct(CC)\times PQD(CC)\times QD(CC)+DT+{TXENCO}_{2}$$

(34)

$$HS=sg\times HY$$

(35)

$$GS=s\mathrm{g}\times GY$$

(36)

$$TSAV=HS+GS$$

(37)

$$INV(CC)=\frac{{\alpha }_{i}(CC)\times TINV}{PC(CC)}$$

(38)

$$INVS=ivs\times TINV$$

(39)

$$INVF=TINV-\sum_{CC}PC(CC)\times INV(CC)-INVS$$

(40)

Macroscopic-closure and market-clearing block

$$QC(CC)=\sum_{PS}QX\left(CC,PS\right)+HC\left(CC\right)+GC\left(CC\right)+INV\left(CC\right)+SC(CC)$$

(41)

$$\sum_{CC}PEXP(CC)\times EXP(CC)=\sum_{CC}PIMP(CC)\times IMP(CC)+INVF$$

(42)

$$TINV=TSAV$$

(43)

$$\sum_{PS}L(PS)=LS$$

(44)

$$\sum_{PS}K(PS)=KS$$

(45)

$$SC(CC)=\frac{{\alpha }_{s}(CC)\times INVS}{PC(CC)}$$

(46)

$$(1-it\left(PS\right))\times PX(PS)=CX(PS)$$

(47)

$$\begin{array}{l}BT=\sum\limits_{CC}\sum\limits_{PS}vt(PS,CC)\times\frac{CX\left(PS\right)}{1-it\left(PS\right)}\times X(PS)+\sum\limits_{CC}PIMP(CC)\times IMP(CC)\\-\sum\limits_{PS}\sum\limits_{CC}PC(CC)\times QX(CC,PS)\\\begin{array}{l}-\sum\limits_{CC}PC(CC)\times(HC(CC)+GC(CC)+INV(CC)+SC(CC)\\-\sum\limits_{CC}PEXP(CC)\times EXP(CC)\end{array}\end{array}$$

(48)

$$GDP=\sum_{CC}\sum_{PS}PQ(CC)\times vt(PS,CC)\times X(PS)-\sum_{PS}\sum_{CC}PC(CC)\times QX(CC,PS)$$

(49)

Carbon-policy block

$$ENCO2(PS)=\sum_{CC}QXEN\left(CC,PS\right)\times emf(CC)$$

(50)

$$TCO2=\sum_{PS}ENCO2(PS)$$

(51)

$$TXENCO2=PCO2\times \sum_{PS}ENCO2(PS)$$

(52)