Carbon tax,cap-and-trade or mixed policy:Which is better for carbon mitigation?

This paper developed a China energy-economic-environmental policy model based on a dynamic CGE model,designed a carbon tax scenario,a cap-and-trade scenario and a policy mix scenario,and simulated the economic and mitigation effects under different scenarios. The results show that only carbon tax policy cannot realize the 2020 mitigation target. Only cap-and-trade will cause high mitigation costs and tremendous mitigation pressure to regulated sectors. Combination of cap-and-trade with a low carbon tax can realize the2020 mitigation target with modest mitigation costs and mitigation pressures for regulated sectors. Meanwhile,the dispersed emitter will also bear mitigation commitments at a certain extent. The results of this paper suggest a mixed policy combining cap-and-trade with a low carbon tax as the first choice for carbon mitigation policy in China.