Synergistic Effects of International Oil Price Fluctuations and Carbon Tax Policies on the Energy–Economy–Environment System in China

Abstract

Catalyzed by COVID-19 and the Russia–Ukraine conflict, oil prices fluctuate dramatically on the worldwide market. Both international oil price changes and carbon tax policies have a direct impact on energy costs, thus influencing energy security and emission reduction impacts. Therefore, assessing the interaction effects of international oil price variations and carbon tax policies can assist in resolving the competing challenges of energy security and carbon emission reduction. The impact of international oil price fluctuations on China’s energy–economic–environment system under the baseline scenario and carbon taxation scenario is analyzed by constructing a computable general equilibrium model comprising six modules: production, trade, institutions, price, environment, and equilibrium. The findings indicate that, in addition to reducing high-carbon energy consumption and increasing demand for clean electricity, rising international oil prices have a negative effect on real GDP, resulting in lower output in sectors other than construction, and a positive effect on the environmental system by driving carbon emission reductions. In contrast, decreasing international oil prices have the opposite effect. Nevertheless, the impact of rising and decreasing international oil prices is asymmetrical, with the positive shock effect being smaller than the negative. The carbon tax policy can effectively offset the increase in carbon emissions caused by the decline in international oil prices, which is conducive to promoting the development of clean energy, while simultaneously causing an increase in product prices and arousing a contraction in consumer demand, which has a limited negative impact on the macroeconomy.