Emission Reduction and Economic Impacts of US Carbon Tariffs on China: Based on CGE Model analysis

Based on GTAP-E model, a recursive dynamic method is adopted to analyze emission reduction and economic impact of carbon tariffs levied by US on China's economy and the effects on carbon emission. The results show that China's macroeconomic would suffer a lot. The export of sectors with high embodied carbon emission would decrease significantly. While for sectors with low embodied carbon emission although some of them have high dependence on US, the negative impact on their export would be lower due to trade diversion to other regions. While the implementation of carbon tariffs could reduce global carbon emissions, the effects are quite limited.