Research on the Impact of Various Emission Reduction Policies on China’s Iron and Steel Industry Production and Economic Level under the Carbon Trading Mechanism

Abstract

To study the emission reduction policies’ impact on the production and economic level of the steel industry, this paper constructs a two-stage dynamic game model and analyzes various emission reduction policies’ impact on the steel industry and enterprises. New results are observed in the study: (1) With the increasing emission reduction target (15%–30%) and carbon quota trading price (12.65–137.59 Yuan), social welfare and producer surplus show an increasing trend and emission macro losses show a decreasing trend. (2) Enterprises’ reduction ranges in northwestern and southwestern regions are much higher than that of the other regions; the northeastern enterprise has the smallest reductions range. (3) When the market is balanced (0.8543–0.9320 billion tons), the steel output has decreased and the polarization in various regions has been alleviated to some extent. The model is the abstraction and assumption of reality, which makes the results have some deviations. However, these will provide references to formulate reasonable emissions reduction and production targets. In addition, the government needs to consider the whole and regional balance and carbon trading benchmark value when deciding the implementation of a single or mixed policy. Future research will be more closely linked to national policies and gradually extended to other high-energy industries.

Research on the applicability and impact of CO2 emission reduction policies on China’s steel industry

“…According to the research of Duan (2019) and the research ideas in this paper, this section analyzes the impact of these two emission reduction mechanisms (carbon tax and carbon trading) on the overall indicators of the steel industry at three time points, namely, 2020, 2025 and 2030. The inverse demand curve, emission reduction cost curve, CO 2 emission intensity reduction target, production cost, CCS curve, external macro environmental loss caused by CO 2 emissions and other functional relationships and parameters have referred to the previous research results (Färe et al, 2007;Lee et al, 2002;Guenno and Tiezzi, 1998).…”

“…According to the traditional Chinese geographical division method and references (Duan et al, 2019;Duan et al, 2020), the main research focus of this paper encompasses the government and six regions1. The regional steel industry data are regarded as a steel enterprise entity.…”

“…In the previous research (Duan et al, 2019), three emission reduction scenarios in the near, medium-and long-term were set. This paper will follow these three emission reduction scenarios and examine the changes in the overall economic and environmental indicators of the steel industry under different emission reduction scenarios.…”

Carbon Emission Reduction—Carbon Tax, Carbon Trading, and Carbon Offset

“…To study the emission reduction policies' impact on the production and economic level of the steel industry, Duan, Han, Mu, Yang, and Li [10] constructed a two-stage dynamic game model and analyzed various emission reduction policies' impact on the steel industry and enterprises. The research results indicated that with the increasing emission reduction target (15-30%) and carbon quota trading price (12.65-137.59 Yuan), social welfare and producer surplus show an increasing trend and emission macro losses show a decreasing trend.…”

Design of Combined Auction Model for Emission Rights of International Forestry Carbon Sequestration and Other Pollutants Based on SMRA

“…The main goal of the study is to improve the efficiency of an auction, and the design of the unified standard of pollutant auction and the supervision mechanism is not perfect; • Most importantly, there are relatively few studies on forestry carbon sequestration and pollutant combination trade. With the increase of pollutant emission reduction target and carbon quota trading price, more and more attention will be paid to the study of forestry carbon sequestration and pollutant trading [45].…”