The Impacts of Carbon-Motivated Border Tax Adjustment to China's Industrial Exports—A CGE Based Analysis
SHEN Keting(Zhejiang Gongshang University,310018)LI Gang(Institute of Industrial Economics,CASS,100086)
Carbon-motivated border tax adjustment is a unilateral international trade policy aiming at compensating the loss of competitiveness of carbon intensive products due to carbon dioxide abatement actions. It violates fundamental principles of the UNFCCC,and potentially conflict with the core WTO principle of non-discrimination,reflected in the GATT Articles I and III. Based on the analysis of embodied carbon emission of China's industrial exports,this paper evaluates the potential impacts of carbon duty to China's industrial production,exports,and employments with a recursive dynamic CGE model. The results of simulation show that with a rate of 30 or 60 US dollar per ton of carbon the output of China's industrial sectors would decline 0.62%～1.22%,exports would experience a drop of 3.53%～6.95%,and employment opportunities would go down 1.22%～2.39%. The shock of the border tax adjustment would probably persist for more than 5-7years. Furthermore,some of non-carbon-intensive sectors,such as manufacture of electrical machinery and equipment,would probably be affected more seriously. The authors also suggest for several measures of alleviating the impacts of carbon duty,and put forward a policy of carbon duty based on carbon consumption per capita as a countermeasure.