Abstract

A unique GHG emission decline target was released by the Chinese government to facilitate the decrease in GHG emission per unit of GDP in China. In other words, an increase in GHG is permitted under a GDP reflecting a better quality environment quality. Therefore, technology promotion and policy evolution are necessary to realize this within a limited period. This research considered a GHG emission tax and subsidy policy to achieve environmental targets via environment friendly vehicle introduction and clean energy promotion. An optimization simulation model based on extended input-output model was explored to compare with four policy scenarios. The simulation result shows that hybrid vehicle and electric vehicle introduction are powerless to meet environment targets unless more attention is paid to solar power and wind power along with thermal power. This research proposed an optimal GHG emission tax rate and subsidy rate for policy makers in China to reach their environment goal.

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