Carbon-Based Border Tax Adjustments and China's International Trade: Analysis Based on a Dynamic Computable General Equilibrium Model

39 Pages Posted: 14 Mar 2013 Last revised: 18 Mar 2013

See all articles by Ling Tang

Ling Tang

Beijing University of Chemical Technology

Qin Bao

Chinese Academy of Sciences (CAS) - Institute of Systems Science, Academy of Mathematics and Systems Science

ZhongXiang Zhang

Tianjin University - Ma Yinchu School of Economics

Shouyang Wang

Chinese Academy of Sciences (CAS) - Center for Forecasting Science; Academy of Mathematics and Systems Sciences

Multiple version iconThere are 2 versions of this paper

Date Written: March 13, 2013

Abstract

With large shares in global trade and carbon emissions, China’s international trade is supposed to be significantly affected by the proposed carbon-based border tax adjustments (BTAs). This paper examines the impacts of BTAs imposed by the USA and EU on China’s international trade, based on a multi-sector dynamic computable general equilibrium (CGE) model. The simulation results suggest that BTAs would have a negative impact on China’s international trade in terms of large losses in both exports and imports. As an additional border tariff, BTAs will directly affect China’s exports by cutting down exports price level, whereas Chinese exporting enterprises will accordingly modify their strategies, significantly shifting from exports to domestic markets and from regions with BTAs policies towards other regions without them. Moreover, BTAs will affect China’s total imports and sectoral import through influencing the whole economy in an indirect but more intricate way. Furthermore, the simulation results for coping policies indicate that enhancing China’s power in world price determination and improving energy technology efficiency will effectively help mitigate the damages caused by BTAs.

Keywords: Border Carbon Tax Adjustments, International Trade, Dynamic Computable General Equilibrium Model, Price Determination Power, Technological Change

JEL Classification: D58, F18, Q43, Q48, Q52, Q54, Q56, Q58

Suggested Citation

Tang, Ling and Bao, Qin and Zhang, ZhongXiang and Wang, Shouyang, Carbon-Based Border Tax Adjustments and China's International Trade: Analysis Based on a Dynamic Computable General Equilibrium Model (March 13, 2013). FEEM Working Paper No. 17.2013. Available at SSRN: https://ssrn.com/abstract=2232733 or http://dx.doi.org/10.2139/ssrn.2232733

Ling Tang

Beijing University of Chemical Technology ( email )

15 N. 3rd Ring Rd E
Chaoyang, Beijing, 201204
China

Qin Bao

Chinese Academy of Sciences (CAS) - Institute of Systems Science, Academy of Mathematics and Systems Science ( email )

52 Sanlihe Rd.
Datun Road, Anwai
Beijing, Xicheng District 100864
China

ZhongXiang Zhang (Contact Author)

Tianjin University - Ma Yinchu School of Economics ( email )

92 Weijin Road, Nankai District
Tianjin 300072
China
+86 22 87370560 (Phone)

HOME PAGE: http://ideas.repec.org/f/pzh243.html

Shouyang Wang

Chinese Academy of Sciences (CAS) - Center for Forecasting Science; Academy of Mathematics and Systems Sciences ( email )

China

Register to save articles to
your library

Register

Paper statistics

Downloads
53
Abstract Views
527
rank
296,617
PlumX Metrics