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Climate Change Mitigation Through Market-based instruments in Large Asian Emitters

Nopiah, Ririn and Widodo, Tri (2019): Climate Change Mitigation Through Market-based instruments in Large Asian Emitters.

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Abstract

Climate change is responsibility of the economic system like households, firms, and governments that produces Greenhouse Gases (GHG). This paper aims to analyze effectiveness and efficiency of climate change mitigation policies for Japan, China and India that are large Asian emitters through market-based instruments. GTAP-E model is used to analyze the impact of carbon tax policy using their global commitments to reduce carbon emissions. The result shows that carbon tax is best alternative choice for Japan, China, and India to reduce CO2 emissions as a climate change mitigation. The carbon tax provides that in a GDP increase of 0,44% in Japan. But in China and India find that reducing CO2 emission causes GDP is decline around 0,82% for China and 1,98 for India. Thus, all regions can get emission target by cost-effectively and each welfare loss can be compensated by carbon tax revenues. However, carbon tax is not one way fits to climate change mitigation.

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