Does a Recycling Carbon Tax with Technological Progress in Clean Electricity Drive the Green Economy?

Abstract

The environmental issue is a significant challenge that China faces in leading the development of the green economy. In this context, reducing CO2 emissions is the key to combatting this problem. Taking the 2017 social accounting matrix (SAM) as the database and combing macroeconomic parameters from previous studies, this article constructed the environmentally computable general equilibrium (CGE) model as an analytical model to analyze the economic–environmental–energy impacts of recycling carbon tax with technological progress in clean electricity. We found that when the rate of clean electricity technological progress reaches 10%, the carbon recycling tax that reduces corporate income taxes will achieve a triple dividend of the carbon tax, namely, promoting economic development, reducing carbon emissions, and improving social welfare. In the meantime, on the basis of carbon tax policies that raise the price of fossil energy, clean electricity technological progress will help accelerate the transformation of electricity structure, reduce the proportion of thermal power generation, and better promote emission reduction. In addition, due to the high carbon emission coefficient, coal contributes significantly to carbon emission reduction. Therefore, China should implement a carbon tax recycling policy supplemented by the progress of clean power technology as soon as possible to better promote green economy development.

The synergistic effect of carbon performance and technological innovation on corporate financial performance

“…To sum up, companies with good carbon performance will bring the following positive effects: Firstly, the better the carbon performance of an enterprise, the more positive signals it sends to the outside world that its development is in line with the current economic situation, establishing a good corporate image that responds positively to the national policy and strengthening the confidence of investors. Secondly, good carbon performance indicates that the company has an irreducible advantage in terms of environmental cost, which improves the competitive advantage of the company’s products and sustainable development ( Liu et al, 2022 ). Zhu and Zhang (2022) believe that energy enterprises focusing on environmental performance can optimize resource allocation and promote enterprise development.…”

The impact of environmental taxes on economic benefits and technology innovation input of heavily polluting industries in China

“…Dagar et al (2022) suggested that environmental degradation will be reduced in the long run if real GDP growth moves towards greener (Qiu et al, 2018), more technologically advanced, and more environmentally friendly areas. Therefore, they proposed that under certain conditions, environmental taxes will not negatively impact enterprises (Adamou et al, 2012;Liu et al, 2022). Feng et al (2022) proved the existence of a double dividend effect in China under the low-carbon tax policy.…”

Social welfare Promotion, Carbon Emission and Tax

“…11 with 𝑊 * * − 𝑊 * = [𝑎(2𝑟 − 𝑏)] 2 /[(3𝑟 + 𝑏 + 2𝑔)(𝑟 + 2𝑏 + 2𝑔) 2 ] ≥ 0, if the gap between 𝑡 * * 𝑎𝑛𝑑 𝑡 * is bigger when 𝑊 * * 𝑎𝑛𝑑 𝑊 * has big gap also. For Proposal 3, one may refer to Liu et al[31] who find that a carbon tax can generate comprehensive effects on promoting economic development,…”