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Mitigation Effect of Carbon Emission Tax in Dairy Farming: An Empirical Study of Heilongjiang Province in China

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  • Shuai Shi

    (School of Economics and Management, Northeast Agricultural University, Harbin 150030, China)

  • Yu Jing

    (School of Economics and Management, Northeast Agricultural University, Harbin 150030, China)

  • Cuixia Li

    (School of Economics and Management, Northeast Agricultural University, Harbin 150030, China)

Abstract

From a production perspective, this study evaluates the mitigation effect of a carbon emission tax (CET) on dairy farming in Heilongjiang Province. The marginal analysis method is used in the paper. The total cost and operation cost are respectively considered in the long and short run. We have five types of CETs and four scales of dairy farming. A CET is levied on milk, the main dairy product. We investigate the marginal costs and benefits of different scales and simulate the exit rates and mitigations. We conclude that 30 yuan/t CO 2e is the suitable CET, leading to the mitigation of 0.79% with the cost of 0.17% revenue loss. The heterogeneity of marginal cost (MC) of each scale is a major factor affecting the exit rate, rather than the average MC. We also find there is a larger mitigation response in long run, and economies of scale are effective in resisting the CET. The revenue of CET can subsidize low-carbon dairy farms and silage, which will promote biogas digester engineering and harmless treatment of manure.

Suggested Citation

  • Shuai Shi & Yu Jing & Cuixia Li, 2019. "Mitigation Effect of Carbon Emission Tax in Dairy Farming: An Empirical Study of Heilongjiang Province in China," Sustainability, MDPI, vol. 11(2), pages 1-16, January.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:2:p:333-:d:196694
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