The Impact of Carbon Tax on Economic Growth in China

Transcription

1 Avalable onlne at Energy Proceda 5 (0) IACEED00 The Impact of Carbon Tax on Economc Growth n Chna Zhang Zhxn a*, L Ya b a Professor, School of economcs, Shandong Unversty of Technology, Zbo cty, 55049, Chna b School of economcs, Shandong Unversty of Technology, Zbo cty, 55049, Chna Abstract Carbon tax s an effectve measure to buld low-carbon economy and has sgnfcant nfluences on economc growth. Usng the panel data of 9 provnces from 999 to 008, we buld a panel data model and adopt Generalzed Least Squares estmaton ( GLS ) to analyze the mpact of carbon tax on economc growth n Chna. The results are as follows: the mpact of carbon tax on economc growth n Chna vares consderably between dfferent regons; carbon tax could stmulate economc growth of most eastern regons, whle can hnder some provnces n mddle and western areas. 0 Publshed by Elsever Ltd. Open access under CC BY-NC-ND lcense. Selecton andpeer-revew underresponsblty of RIUDS Keywordscarbon tax; economc growth; panel data; regonal dsparty. Introducton The U.S. House of Representatves passed "Amercan clean energy securty act" by a narrow majorty n 009. The bll authorzes the government can mpose carbon tax on products, whch wll be exported to the U.S. from other countres. The bll wll be effectve from 00, and The Unted States wll mpose puntve carbon tarffs to those countes ncludng Chna, whch wll not taken actons to cut carbon do xde emssons. In ths nternatonal envronment domnated by the U.S., t s an nevtable trend to mpose carbon tarff n the future, whch s a heavy blow to Chna that exports hgh carbon products. The Chnese government should take effectve measures to optmze the structure of products and reduce energy consumpton to face the new green trade barrers. Generally speakng, hgher energy prces wll reduce energy consumpton, whch results n fewer greenhouse gas emssons. However, n ths era of hghly developed nternatonal trade, as s unrealstc Chna alone rase energy prces, whle carbon tax on * Correspondng author. Tel.: E-mal address: bej00@6.com Publshed by Elsever Ltd. do:0.06/j.egypro Open access under CC BY-NC-ND lcense.

2 758 Zhang Zhxn and L Ya / Energy Proceda 5 (0) energy consumpton s effectve measures for each country to reduce carbon doxde emssons and buld low-carbon economy. Foregn studes confrmed that carbon tax could effectvely slow down clmate warmng (Floros and Uvlacho, 005) [], and had sgnfcant nfluences on macro-economy and ndustres (Goto, 995) []. Lee (008) analyzed the mpact of carbon tax and tradng emssons on dfferent ndustres.the concluson showed that the carbon tax only has a negatve mpact on. If the two measures were carred out at the same tme, the carbon tax could boost growth [3]. Some research of carbon tax on Chnese economy showed that a carbon tax would cause large losses n Chna (Gao, 00) [4]. Ths was consstent wth We s conclusons. We etal (00) quanttatvely analyzed a carbon tax on the Chnese economy and greenhouse gas emssons by a computable general equlb ru m model. The results mpled that the carbon tax caused a great mpact on Chnese economy n the short term, but had not long-term nfluence on Chnese GDP [5]. However, ths ddn t mean that a carbon tax, n the long run, wouldn t have any effect on the economy, because the carbon tax could change the structure of ncome dstrbuton because of wages shrnk. Consequently, the consumpton declnes and holds back the development of Chnese economy. Zhu et al (00) [6] analyzed the mpact of the carbon tax on dfferent ndustres and concluded that a carbon tax has dfferent nfluence on dfferent economc sectors. Those ndustres wth hgh emssons suffer the bggest mpact. In non-energy sector, toys, textles, clothng and other departments are badly affected, whle other ndustres are benefted, for example, toursm, communcatons, electroncs and so on. In ths paper, panel data model are bult by Chna's provncal statstcs to analyze the relatonshp between economc growth and carbon tax, and concluded: the mpact of carbon tax on economc growth n Chna vares consderably between dfferent regons; carbon tax could stmulate most of the eastern regon's economc growth, whle can hnder some provnces n mddle and western areas. Therefore, sngle carbon tax s aganst Chnese harmonous development of the regonal economy, whch asks our Chnese government for carryng our varous carbon tax polces n dfferent regons. The conclusons of ths paper provde realstc bass.. Model Bult and Emprcal Analyss.. Model Bult Ths artcle ams to analyze the mpact of carbon tax on economc growth, and we use Cobb-Douglas producton functon to analyze. Because the producton functon only explaned relatonshp among captal factor, labor factor and output value, we amends t n order to analyze mpact of carbon tax on as follows: c Y t K t L t CT t e () =,,, 30; t =999, 000,, 008 Where, Y s GDP, K s fxed nvestments, L s employee, CT s carbon tax. Both sdes of equaton () are taken the logarthmc at the same tme. Ln Y c Ln K Ln L Ln CT () t t t t The equaton () s econometrc model about carbon tax and economc growth. Where s random error. Then, we requre to determne specfc equaton, n other words, whether c are equal or not. Ths needs to adjust them through testng hypothess below. H 9 9 9; H c c c

3 Zhang Zhxn and L Ya / Energy Proceda 5 (0) H means ntercepts and coeffcents are equal. H means ntercept are equal. At the begnnng, we should frstly test H.There s no need to test H agan, f we accept the null hypothess H. If the null hypothess s rejected, we need to further test H and determne whether ntercepts are equal or not. By calculatng panel data, we conclude F = F 0.0 (8,58), whch rejects the null hypothess H. In the same way, we work out F =8.069> F 0.0 (8,74), whch smlarly rejects the null hypothess H.Comparatve analyss of Chnese provnces s made and the panel data ncludes most of the provnces n Chna, so a fxed effects model s reasonable. At the same tme, we adopt Ordnary Least Squares estmaton ( OLS ) to estmate random effects models of the equaton () and make Hausman test to fnd that the fxed effects model s superor to random effects model. So a fxed model wth varable coeffcents s bult, whch says c,, change regon by regon... Data sources The data used n ths paper orgnates calendar year "Chna Statstcal Yearbook" and "Chna Co mpendum of 60 years Statstcs", and resource taxes are from the "Chna Statstcal Yearbook ". The data of GDP are based on the 978 actual value, so the data are comparable n the same prce level. Snce Chna has not mposed carbon tax, therefore, we use the resource tax nstead. The data s smlarly actual currency that elmnates prce element. Investment n fxed assets and number of employees orgnates the "Chna Compendum of 60 years Statstcs "and nvestment n fxed assets also elmnates prce element..3. Analyss of regresson results The results show that the random errors of regresson equaton exsts obvous autocorrelaton by on the model (). Therefore, s used and effectvely elmnates the seral correlaton. The regresson results are showed n Table. Adjusted good. The value of F s large and most parameters estmatons are sgnfcant at the 0% confdence level. These explan model s estmaton results are more reasonable. Regresson results show that most parameters estmatons are sgnfcant at the 0% confdence level n t-test. The mpact of carbon tax on economc growth s obvously equal n dfferent regons. The mpacts are the bggest n Bejng, Jangsu, Shandong. Ther coeffcents are.0,.,.5respectvely. Schuan, Chongqng and Shanx coeffcents estmatons are 0.005, 0.0, 0.03respectvely. They are the least n all coeffcents. The effect s dametrcally dfferent n varous provnces. The carbon tax s coeffcents of Bejng, Shandong, Jangsu provnces are postve, whch manfest carbon tax s conducve to economc growth n these provnces. For example, Bejng's coeffcent estmaton s.0. It means that the Bejng's GDP wll grow.0% f carbon tax ncreases %. However, carbon tax coeffcents' estmatons of Helongjang, Shanx, Nemenggu provnces are negatve. It means that carbon tax prevents economc growth. Take Shanx Provnce for example, the coeffcents estmato ns of Helongjang Provnce s It manfests that the Helongjang's GDP wll drop 0.68% f carbon tax ncreases %.Overall. Carbon tax has negatve effect mostly n the relatvely poor mddle and west areas or provnces wth large energy producton, whle mpacts n eastern areas are mostly postve. Table : Regresson Results R s from the regresson results, whch makes clear that model fttng effect s very

4 760 Zhang Zhxn and L Ya / Energy Proceda 5 (0) Regon c Bejng -0.9(-3.6 * ) 0.49 (.9 ** ) 0.0 (-.79 * ).0(8.5 * ) Tanjn 5.6(-3.6 * ) 0.77(9.76 * ) 0.9(-3.59 ** ) 0.94(.37) Hebe -4.88(-3.6 * ) 0.5 (.5) 0.7 (8.09 * ) 0.80 (5. * ) Shanx 8.59(-3.6 * ) 0.77 (.63 * ) -0.70(-.07) -0.30(.96 *** ) Nemenggu -3.80(-3.6 * ) 0.47 (3.75 * ) 0.88 (.68 * ) (.69 *** ) Laonng 7.33(-3.6 * ) 0.33 (7.8 * ).39 (-0.6).34(.88 *** ) Jln -4.36(-3.6 * ) 0.9 (.7 * ) 0.54 (4.6 * ) 0.75(.8 ** ) Helongjang 5.78(-3.6 * ) 0.63 (.65 * ) 0.95 (-0.67) -0.68(-.8 ** ) Jangsu -34.(-3.6 * ) 0.8 (4.9 * ).6 (.47 ** ).(.53 ** ) Zhejang -0.5(-3.6 * ) 0.9 (4.79 * ) 0.4 (6.9 * ) 0.9(6.86 * ) Anhu -5.40(-3.6 * ) 0.5 (.37 ** ).4 (.7 *** ) 0.68(3.3 * ) Fujan -8.95(-3.6 * ) -0.5 (.05) 0.98 (4.88 * ) 0.7 (.67 *** ) Jangx -8.8(-3.6 * ) 0.4 (3.87 * ).6 (.89 *** ).34 (.5 ** ) Shandong -46.0(-3.6 * ) 0.3 (.47 ** ) 0.94(6.3 ** ).5 (.6 ** ) Henan -7.4(-3.6 * ) 0.5 (3.38 * ) 0.39 (3.6 * ) 0.36(-.65 * ) Hube -6.57(-3.6 * ) 0.65 (3.95 * ) 0.89 (4.4 * ) -0.08(-.68 *** ) Hunan 0.74(-3.6 * ) 0.58 (9.98 * ) (0.3) 0.44 (.8 *** ) Guangdong -3.78(-3.6 * ) 0.8 (.6 ** ) 0.99 (0.89) -0.5(0.88) Guangx 6.98(-3.6 * ) 0.68 (.06 * ).6(-.6 * ) 0. (.63 * ) Hanan -.0(-3.6 * ) 0.44 (.87 *** ) 0.85 (3.5 * ) -0.9 (-.87 *** ) Chongqng -4.03(-3.6 * ) 0.67 (40.3 * ) 0.69 (3.33 * ) -0.0(.76 *** ) Schuan (-3.6 * ) 0.49 (4.6 * ).4 (0.8) (.85 *** ) Guzhou 5.37(-3.6 * ) 0.89 (4.6 * ) 0.48(-4.48 * ) 0.63 (.54 ** ) Yunnan -4.09(-3.6 * ) 0.4 (0.45 * ).39 (.77 *** ) (-5.76 * ) Shanx -.36(-3.6 * ) 0.66 (7.79 * ) 0.75(-0.8) (.69 *** ) Gans u 8.70(-3.6 * ) 080 (6.8 * ) 0.50 (.88 *** ) 0.08 (.99 ** ) Qngha -6.5(-3.6 * ) 0.53 (.88 * ).4 (.3 ** ) (3.08 * ) Nngxa 4.4(-3.6 * ) 0.8 (0.79 * ).09(.8 *** ) 0.3 (. ** ) Xnjang 0.60(-3.6 * ) 0.9 (4.0 * ).4 (.7 *** ) -0.5(.) Adjusted R =0.9995, F =458.99, DW =.05 Note: T-statstc n parentheses, *denotes statstcal sgnfcance at the % confdence level, **denotes statstcal sgnfcance at the 5% confdence level whle***denotes statstcal sgnfcance at the 0% confdence level. 3. Man Conclusons and Polcy Recommendatons In ths paper, usng the panel data of 9 Chnese provnces from 999 to 008 and GLS, we analyze the mpact of carbon tax on economc growth n Chna. The man results and polcy recommendatons are as follows: 3. Basc conclusons 3... The mpact of carbon tax on economc growth changes regon by regon n Chna Energy consumpton and carbon doxde emssons are varous n Chnese regons because of dfferent economc structures. So the effect of mposng carbon tax on regonal economy s dfferent. Poor provnces wth abundant natural resources produce prmary products and hgh-carbon products. Therefore,

5 Zhang Zhxn and L Ya / Energy Proceda 5 (0) carbon tax wll drectly ncrease the producton costs of local frms, not conducve to economc development. However, provnces n eastern regon are engaged n deep processng and hgh -tech ndustres wth less carbon doxde emsson. So, t has just lttle mpact on economy to mpose carbon tax Carbon tax wll change the pattern of regonal economc development n Chna There are obvous dfferences of the economc structure n regons n Chna. Economy s developed n eastern regon, and ts ndustral structure s more reasonable than the mddle and western regons, whle economc development n mddle and western regons s relatvely backward and reles too much on abundant natural resources. Therefore, ther energy consumpton per unt of s more than that n eastern regon. In ths way, carbon tax constrants of economc development n mddle and western regons, whch wll change Chna's current economc development pattern. 3. Polcy recommendatons 3... Implement varous carbon tax polces; encourage nter-regonal transfer of ndustry Accordng to negatve mpact of carbon tax on mddle and western economy, carbon tax and coordnated development of regonal economy should be consdered. In the begnnng, the Chnese government can carry out varous taxes accordng to economc development and ndustral structure, and then contnue to remove polcy dfferences. For nstance, hgh carbon tax s putted nto effect n developed regons and low carbon s carred out n poor regons or provnces wth large energy producton. Ths method not only promotes ndustry's structure of eastern regons but also protects local enterprses of mddle and western regons Provde polcy and fnancal support to mddle and western regons; acheve harmonous development of the regonal economy Carbon tax, a "double-edged sword" has a larger negatve mpact on economc development of the central and western regons, not conducve to Chna's regonal economc development. If handled properly, t can promote regonal economc development. Ths requres the government to nvest new carbon tax revenue n the backward areas n mddle and western, strongly gves ad to local enterprses, and gve polces and fnancal support to the local low-carbon enterprses. Also government should ncrease nvestment n human captal n mddle and western regons, to mprove the qualty of the local workforce. In the producton, the necessary techncal should be provded, the producton chan extended, and the ndustral structure optmzed and upgraded. References [] Floros,N., Vlachou,A. Energy Demand and Energy-Related CO Emsson n Greek Manufacturng:Assessng the Impact of a Carbon T ax. J, Energy Economcs, 005; (7): [] Goto,N. Macroeconomc and Sectoral Impacts of Carbon Taxaton.. J, Energy Economcs, 995; 7(4):77-9. [3] Lee,C.F., Ln,S.J., Lews.C. Analyss of the Impact of Combnng Carbon taxaton and Emsson Tradng on Dfferent Industry Sectors. J, Energy Polcy, 008; (36):7-79. [4] Gao Pengfe, Chen Wenyng. Carbon Tax and Carbon Emsson. J, Journal of Tsnghua Unversty (Natural Scence), 00, ; 4 (0): [5] We Taoyuan et al. The mpact of A carbon tax on greenhouse gas emssons and economy n Chna. J, World Economcs and Poltcs, 00; (8): [6] Zhu Yongbn, Lu Xao, Wang Zheng. Abatement Effect of Carbon Tax and Its Impacts on Economy n Chna. J, Chna Soft Scence, 00; (4) :-9.