The emission abatement of enterprises in China: a Bayesian DSGE approach under carbon tax scenarios

In this study, we establish an environmental DSGE model embodying carbon tax to compare the impact of technology and consumption shock on macro-environment and emission abatement of enterprises under carbon tax and non-tax scenario in China. The results show that the carbon tax policy will exert greater effect on technology and consumption shock. In carbon tax scenario, the economic expansion effect caused by a technology shock is likely to be dampened and emission abatement will increase. The response of emission abatement of enterprises in carbon tax scenario is contrary to that in non-tax scenario under a positive consumption shock.