Would the expected emission reduction policy lead to green paradox" effect? An investigation based on the supply side reform and capital scarcityin of China
A global climate agreement sometimes produces accelerating climate change as a result, in the future under the new governance framework of the Paris Agreement, we should try to avoid the "green paradox happen again. In this paper, based on the supply side structural reform in our national condition, through the theoretical models,empirical test and prediction research of the green paradox effect, we have comprehensively introduced the trigger mechanism of the green paradox effect. Theoretical model results show that in a perfectly competitive market, with fossil energy mining Hotelling rule,when interest rates are exogenous given and remain the same in two stages, the gradually rising carbon taxes is expected to lead to the green paradox effect; Under the increasing interest rate changes, the change degree of a carbon tax would be faster than the rate change, the green paradox effect will become irreversible; The carbon price policy will make the pollutant discharge has the general nature of commodity market and capital market, the government should prevent the abnormal price fluctuations and the potential inflation problems maybe caused by the carbon market. Empirical results show that China after 1999 by The China National Plan to Phase out Ozone-Depleting Substances (Revised) does not appear a continuous decline in energy price,which does not exist the green paradox effect, but this conclusion also with our country has not yet formed a unified system to reduce emissions and the marketization level of energy and other factors. By CGE simulation study,we have found that among the shocks of reform on the supply side,a carbon tax policy and a R&D subsidy policy theses impacts of the different external conditions, the supply side reform has the largest macroeconomic effect for the future, a single carbon tax policy will not trigger the green paradox effect, the carbon tax policy and consider the supply side of the capital markets reflect the reform scenario, the possibility trigger the green paradox" effect is enhanced greatly, which China will face the risk of a conditional green paradox effect, the combination of a carbon tax and R&D subsidy policy has the best effect on energy conservation and emissions reduction. Finally,we give the policy recommendations to reduce the market risk for China reduction policies.