The effects of carbon taxes on the Chinese economy

China's contribution to global CO2 emissions, which is already high, is expected to grow significantly. Thus, advocates of CO2 emissions control are calling for substantial efforts in China. However, the Chinese authorities have argued that China cannot be expected to make a significant contribution to the carbon emission problem unless the country receives substantial international aid for this purpose. This contrasts sharply with the wishes of proponents of CO2 emissions control. This paper explains this difference in opinion by analysing the economic implications of possible future CO2 emissions limits in China through a newly-developed dynamic computable general equilibrium (CGE) model of the Chinese economy. The authors believe that such an analysis is also useful in broadening the picture painted by global models, thus serving as a complement to the results obtained through global models. 4 tabs