IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v10y2017i12p2026-d121239.html
   My bibliography  Save this article

Research on CO 2 Emission Reduction Mechanism of China’s Iron and Steel Industry under Various Emission Reduction Policies

Author

Listed:
  • Ye Duan

    () (Key Laboratory of Ocean Energy Utilization and Energy Conservation of Ministry of Education, Dalian University of Technology, Dalian 116024, China)

  • Nan Li

    () (Key Laboratory of Ocean Energy Utilization and Energy Conservation of Ministry of Education, Dalian University of Technology, Dalian 116024, China)

  • Hailin Mu

    () (Key Laboratory of Ocean Energy Utilization and Energy Conservation of Ministry of Education, Dalian University of Technology, Dalian 116024, China)

  • Shusen Gui

    () (Faculty of Management and Economics, Dalian University of Technology, Dalian 116024, China)

Abstract

In this paper, a two-stage dynamic game model of China’s iron and steel industry is constructed. Carbon tax levy, product subsidy, carbon capture and sequestration (CCS) and other factors are included in the emission reduction mechanism. The effects of emissions reduction and the economic impact of China’s overall steel industry (and that of its six main regions) are investigated for the first time under different scenarios. As new findings, we report the following: (1) Not all factors declined. The overall social welfare, consumer surplus, output and emissions decrease with a gradual increase in the reduction target, whereas the carbon tax value, unit value of product subsidies and total subsidies show a rising trend; (2) A combination of multiple emissions reduction policies is more effective than a single policy. With the implementation of a combined policy, regional output polarization has eased; (3) Steel output does not exceed 950 million tons, far below the current peak. These results will help the industry to formulate reasonable emissions reduction and output targets. In short, in effort to eliminate industry poverty and to alleviate overcapacity, the industry should not only adopt the various coordinated reduction policies, but also fully consider regional differences and reduction needs.

Suggested Citation

  • Ye Duan & Nan Li & Hailin Mu & Shusen Gui, 2017. "Research on CO 2 Emission Reduction Mechanism of China’s Iron and Steel Industry under Various Emission Reduction Policies," Energies, MDPI, Open Access Journal, vol. 10(12), pages 1-24, December.
  • Handle: RePEc:gam:jeners:v:10:y:2017:i:12:p:2026-:d:121239
    as

    Download full text from publisher

    File URL: http://www.mdpi.com/1996-1073/10/12/2026/pdf
    Download Restriction: no

    File URL: http://www.mdpi.com/1996-1073/10/12/2026/
    Download Restriction: no

    References listed on IDEAS

    as
    1. Lambertini, Luca & Poyago-Theotoky, Joanna & Tampieri, Alessandro, 2017. "Cournot competition and “green” innovation: An inverted-U relationship," Energy Economics, Elsevier, vol. 68(C), pages 116-123.
    2. Dale W. Jorgenson & Peter J. Wilcoxen, 1997. "Fundamental U.S. Tax Reform and Energy Markets," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-30.
    3. Demailly, Damien & Quirion, Philippe, 2008. "European Emission Trading Scheme and competitiveness: A case study on the iron and steel industry," Energy Economics, Elsevier, vol. 30(4), pages 2009-2027, July.
    4. repec:bla:jpbect:v:19:y:2017:i:2:p:362-376 is not listed on IDEAS
    5. repec:gam:jsusta:v:9:y:2017:i:5:p:681-:d:96751 is not listed on IDEAS
    6. Poyago-Theotoky, J.A., 2007. "The organization of R&D and environmental policy," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 63-75, January.
    7. Manne, Alan & Mendelsohn, Robert & Richels, Richard, 1995. "MERGE : A model for evaluating regional and global effects of GHG reduction policies," Energy Policy, Elsevier, vol. 23(1), pages 17-34, January.
    8. Carlos Benavides & Luis Gonzales & Manuel Diaz & Rodrigo Fuentes & Gonzalo García & Rodrigo Palma-Behnke & Catalina Ravizza, 2015. "The Impact of a Carbon Tax on the Chilean Electricity Generation Sector," Energies, MDPI, Open Access Journal, vol. 8(4), pages 1-27, April.
    9. Zhang, Zhong Xiang, 1998. "Macroeconomic Effects of CO2 Emission Limits: A Computable General Equilibrium Analysis for China," Journal of Policy Modeling, Elsevier, vol. 20(2), pages 213-250, April.
    10. Susumu Cato, 2011. "Environmental policy in a mixed market: abatement subsidies and emission taxes," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(4), pages 283-301, December.
    11. Zhou, X. & Fan, L.W. & Zhou, P., 2015. "Marginal CO2 abatement costs: Findings from alternative shadow price estimates for Shanghai industrial sectors," Energy Policy, Elsevier, vol. 77(C), pages 109-117.
    12. Liang, Qiao-Mei & Fan, Ying & Wei, Yi-Ming, 2007. "Carbon taxation policy in China: How to protect energy- and trade-intensive sectors?," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 311-333.
    13. repec:taf:apeclt:v:23:y:2016:i:5:p:324-331 is not listed on IDEAS
    14. Kemfert, Claudia & Welsch, Heinz, 2000. "Energy-Capital-Labor Substitution and the Economic Effects of CO2 Abatement: Evidence for Germany," Journal of Policy Modeling, Elsevier, vol. 22(6), pages 641-660, November.
    15. Wendner, Ronald, 2001. "An applied dynamic general equilibrium model of environmental tax reforms and pension policy," Journal of Policy Modeling, Elsevier, vol. 23(1), pages 25-50, January.
    16. Moner-Colonques Rafael & Rubio Santiago J., 2016. "The Strategic Use of Innovation to Influence Environmental Policy: Taxes versus Standards," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 973-1000, April.
    17. Ouchida, Yasunori & Goto, Daisaku, 2014. "Do emission subsidies reduce emission? In the context of environmental R&D organization," Economic Modelling, Elsevier, vol. 36(C), pages 511-516.
    18. Carlos Benavides & Luis Gonzales & Manuel Diaz & Rodrigo Fuentes & Gonzalo García & Rodrigo Palma-Behnke & Catalina Ravizza, 2015. "Correction: The Impact of a Carbon Tax on the Chilean Electricity Generation Sector," Energies, MDPI, Open Access Journal, vol. 8(6), pages 1-2, June.
    19. Bruneau, Joel F., 2004. "A note on permits, standards, and technological innovation," Journal of Environmental Economics and Management, Elsevier, vol. 48(3), pages 1192-1199, November.
    20. Poyago-Theotoky, Joanna & Teerasuwannajak, Khemarat, 2002. "The Timing of Environmental Policy: A Note on the Role of Product Differentiation," Journal of Regulatory Economics, Springer, vol. 21(3), pages 305-316, May.
    21. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl A., 2007. "Environmental production functions and environmental directional distance functions," Energy, Elsevier, vol. 32(7), pages 1055-1066.
    22. Jan van Heerden & Reyer Gerlagh & James Blignaut & Mark Horridge & Sebastiaan Hess & Ramos Mabugu & Margaret Mabugu, 2006. "Searching for Triple Dividends in South Africa: Fighting CO2 Pollution and Poverty while Promoting Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 113-142.
    23. STUART McDONALD & JOANNA POYAGO-THEOTOKY, 2017. "Green Technology and Optimal Emissions Taxation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(2), pages 362-376, April.
    24. Jorgenson, Dale W. & Wilcoxen, Peter J., 1990. "Intertemporal general equilibrium modeling of U.S. environmental regulation," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 715-744.
    25. Requate, Till, 2005. "Dynamic incentives by environmental policy instruments--a survey," Ecological Economics, Elsevier, vol. 54(2-3), pages 175-195, August.
    26. Puller, Steven L., 2006. "The strategic use of innovation to influence regulatory standards," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 690-706, November.
    27. Xie, Jian & Saltzman, Sidney, 2000. "Environmental Policy Analysis: An Environmental Computable General-Equilibrium Approach for Developing Countries," Journal of Policy Modeling, Elsevier, vol. 22(4), pages 453-489, July.
    28. repec:wsi:igtrxx:v:14:y:2012:i:03:n:s0219198912500168 is not listed on IDEAS
    29. Yasunori Ouchida & Daisaku Goto, 2016. "Cournot duopoly and environmental R&D under regulator’s precommitment to an emissions tax," Applied Economics Letters, Taylor & Francis Journals, vol. 23(5), pages 324-331, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    emission reduction mechanism research; China’s iron and steel industry; a two-stage dynamic game; inter-regional product yield selection;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:10:y:2017:i:12:p:2026-:d:121239. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team). General contact details of provider: http://www.mdpi.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.