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Energy conservation and emission reduction effects of fuel tax and assessment of economic impacts-based on the Beijing 3E-CGE model

Author

Listed:
  • Hui Shao

    (Beijing Normal University)

  • Biao Ye

    (Beijing Normal University)

  • Hao-ran Pan

    (Beijing Normal University)

Abstract

Fuel tax levy is an appropriate measure to reduce motor vehicle pollution since the government can’t directly tax drifting source of pollution. However, this action will affect every part of residents’ life, we should take many factors into consideration. This paper is devoted to the environmental and economic effects of various fuel taxes for different departments based on Beijing economy-energy-environment computable general equilibrium (3E-CGE) model. Researches show that raising fuel tax rates for production & import and consumption contributes to air pollution and emission reduction. However, tax increase may hinder economic growth. Higher tax on production & import will lead to stagflation while on consumption will lead to depression. Besides, the influences on different industries also vary. My conclusion is that government should levy fuel taxes as well as pay subsidies to optimize industrial structure and decrease the impact on economy.

Suggested Citation

  • Hui Shao & Biao Ye & Hao-ran Pan, 2022. "Energy conservation and emission reduction effects of fuel tax and assessment of economic impacts-based on the Beijing 3E-CGE model," Letters in Spatial and Resource Sciences, Springer, vol. 15(3), pages 377-399, December.
    • Handle: RePEc:spr:lsprsc:v:15:y:2022:i:3:d:10.1007_s12076-021-00294-1
    DOI: 10.1007/s12076-021-00294-1
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    References listed on IDEAS

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    1. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
    2. Austin, David & Dinan, Terry, 2005. "Clearing the air: The costs and consequences of higher CAFE standards and increased gasoline taxes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 562-582, November.
    3. Qin, Ping & Zheng, Xinye & Wang, Lanlan, 2014. "Travel mode choice and impact of fuel tax in Beijing," Environment and Development Economics, Cambridge University Press, vol. 19(1), pages 92-110, February.
    4. Akihiro Kawase, 2011. "Gasoline Tax Rates from the Perspective of Optimal Taxation Theory," Japanese Economy, Taylor & Francis Journals, vol. 38(4), pages 3-27.
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    More about this item

    Keywords

    Fuel tax; 3E-CGE; Energy conservation and emission reduction; Economic effect;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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