Mian Yang、Ying Fan、Fuxia Yang、Hui Hu：Regional disparities in carbon dioxide reduction from China’s uniformcarbon tax: A perspective on inter-factor/inter-fuel substitution

【Abstract】We evaluate the potential of China’s pendent carbon tax policy in CO₂ (carbon dioxide) mitigations from the perspective of inter-factor/inter-fuel substitution. The analysis is conducted by region given that  inter-factor/inter-fuel elasticities of substitution are often discrepant among different areas. The resultsindicate that nearly 3% reduction inCO₂ emissions from the 2010 level can be achieved by levying acarbon tax at 50 Yuan/tonne. The inelastic demand for fuel inputs in the face of rapid processes forindustrialization and urbanization limits the effectiveness of China’s carbon tax to a great extent. Specifically, a total amount of more than 130 million tonnes CO₂ emissions can be reduced in the East coast and Southwest areas, and the areas of Municipalities and Northwest could also achieve CO₂ mitigation bymore than 3%. In contrast, the areas of Midland and Northwest can merely cut their CO₂emissions by1.6% and 0.92%, respectively.

【Keywords】Carbon tax；CO₂ emissions reduction；Interfactor/interfuel substitution；Regional disparities

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