Abstract
China is planning to introduce carbon tax policy to control the carbon emissions of the country better and achieve the “3060 goals”, but there is still widespread discussion about how to introduce it and how to combine it with cap and trade. China has already established a national carbon emission trading market; however, there is also disagreement on whether to impose the carbon tax on companies and projects that have been included in scope of cap and trade. This paper adopts the research method of experimental economics to study the effect on social economy and social emission reduction under cap and trade, carbon tax, and carbon tax-carbon trading policies, and analyzes average prices of carbon market under cap and trade and carbon tax-carbon trading policies. The study finds that under the carbon tax-carbon trading policy, carbon emissions cannot be reduced significantly; but the profits of manufacturers will be reduced significantly; meanwhile, this reduction effect is even more severe for high consumption manufacturers; and it will be resulting in a lower average carbon market price under the carbon tax-carbon trading policies than under the cap and trade policy. This paper will provide theoretical suggestions for introducing carbon tax policy into China in the future and make policy recommendations for the better development of China’s carbon market.
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The authors declare that the data related to the experiments in this paper are available to the journal or to the readers upon request.
Notes
• https://openknowledge.worldbank.org/bitstream/handle/10986/35620/211728CH.pdf?sequence=14&isAllowed=y Data on carbon tax rates for selected countries in 2021 are from Word Bank.
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Funding
This work was supported by “2022 Guangdong University Student Innovation and Entrepreneurship Training Program” (S202210559156) and “Special Funds for the Cultivation of Guangdong College Students’ Scientific and Technological Innovation. (“Climbing Program” Special Funds.)”(pdjh2023b0069).
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The author, Hanting Wang, was responsible for Ztree experimental programming, experimental data analysis, and paper writing. And the author Yuxuan Li was responsible for organizing the experiments, graphing, writing the introduction of the paper, and searching for relevant data. Author Bu Guoqin was responsible for the formulation of the thesis topic, the revision of this paper, and the guidance of the thesis writing.
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The authors declare that all subjects who participated in the experiment were informed and volunteered to participate in the experiment and were eventually paid for the experiment, which was approved by the Dean of International Business School of **an University. The ethical and moral issues related to this experiment are not related to the journal, and the authors and their organization assume the ethical and moral responsibility.
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The 3060 goals refer to the Chinese government’s proposal that China will strive to achieve its carbon peak by 2030 and its carbon neutrality by 2060.
In this paper, cap-and-trade and carbon trading are the same policy, and they both represent the policy of trading carbon allowances in the carbon market for emission-controlled enterprises under government carbon quota control. Two representations are used in this paper to avoid ambiguity in expressing compound policies.
Appendix
Appendix
The following figure shows a carbon trading market scenario simulated by Ztree software (Since the subjects were all Chinese, the software interface language settings were all in Chinese):
The following figure shows the production decision screen simulated by Ztree software (since the subjects were all Chinese, the software interface language settings were all in Chinese).
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Wang, H., Li, Y. & Bu, G. How carbon trading policy should be integrated with carbon tax policy—laboratory evidence from a model of the current state of carbon pricing policy in China. Environ Sci Pollut Res 30, 23851–23869 (2023). https://doi.org/10.1007/s11356-022-23787-y
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DOI: https://doi.org/10.1007/s11356-022-23787-y