Carbon tax effect difference on net-zero carbon emissions target and social welfare level promotion

Abstract

This research aims to find the best carbon tax regime for the achievement of net-zero carbon emissions and promotion of social welfare level. We discuss two regimes in this study, including carbon tax on total social welfare level (CTTW) and carbon tax on single social welfare level (CTSW). Findings show that the best regime depends on product substitution and product price elasticity of demand. Industrial transformation not only causes changes in product substitution and product price elasticity of demand, but also makes these two regimes have different effects on the achievement of net-zero carbon emissions and promotion of social welfare level.