A clean innovation comparison between carbon tax and cap-and-trade system

Energy Strategy Reviews

Zi-rui Chen¹  Pu-yan Nie²  You-hua Chen³  Chan Wang⁴ 

[1] Industry, Guangdong University of Finance &;Social Development, Collaborative Innovation Center of Scientific Finance &College of Economics and Management, South China Agricultural University Guangzhou, 510420, PR China;;School of Finance, Institute of Guangdong Economy &

关键词: Cap-and-trade system;    Carbon tax;    Innovation investment;    Emission reduction;   

DOI  :  

来源: DOAJ

【 摘 要 】

Both carbon tax and cap-and-trade systems are widely applied to reduce emission. This article compares the clean innovation effects of carbon tax with cap-and-trade systems by a static optimal model. Firstly, both cap-and-trade system and carbon tax stimulates clean innovation and reduce emission. Secondly, cap-and-trade system is more efficient to reduce emission and to promote clean innovation than carbon tax. Finally, firms undertake a loss under carbon tax, while the effects of cap-and-trade system on firms' profits are uncertain, which depends on the carbon cap. In summary, this article supports cap-and-trade system to cope with global climate change, but the regulator should choose the suitable emission cap and carbon trading price to guarantee the efficiency of cap-and-trade system. So, different purposes match with different carbon emission tax policies.

【 授权许可】

Unknown