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Carbon taxation has long been proposed to mitigate carbon emissions. Carbon tax rate determination and tax revenue recycling are two key steps to achieve a double dividend under carbon taxation. However, few research has sought to optimize the allocation proportion of tax revenue to various categories of taxpayers (households, enterprises, sectors, etc.), or to optimize the two steps synchronously based on nonlinear optimization methods. In this study, a computable general equilibrium model was established to explore the influence of carbon tax rate and tax revenue recycling shares on the economy and on carbon emissions. Meanwhile, a nonlinear optimization model was proposed, for optimizing both steps of carbon taxation synchronously, as well as for promoting GDP and CO 2 emission reduction. The Bohai Bay area, a typical area with enormous carbon emissions in China, was adopted as the study case for this research. The results showed that the optimized taxation scheme could lead to lower carbon emissions and greater economic growth, i.e., a strong double dividend was obtained. The optimized taxation scheme could lead to both cleaner air and cleaner energy and industrial structures while still promoting economic growth. • CGE model is used for effect analysis under different taxation schemes. • Carbon tax rate and revenue recycling are optimized synchronously. • Lower CO 2 emissions can be achieved without economic decline. [ABSTRACT FROM AUTHOR]

Energy and water are closely related resources, so environmental tax policies for energy resources will also influence the use of water resources. Different environmental tax policies have different emphases. However, few research has compared their effects on the energy – water nexus. In the present study, we considered two commonly used environmental tax policies to regulate energy use (energy and carbon taxes), and established a dynamic computable general equilibrium model to compare the comprehensive impacts of different tax types and intensities on the energy – water nexus. In addition to the direct-use nexus (direct water and energy consumption), we also considered the embodied-use nexus (energy-related water consumption and water-related energy consumption) and the hybrid-use nexus (hybrid water and energy consumption). Besides, both the effects of tax rates and time spans are simulated simultaneously. China was adopted as a case study. For the direct-use nexus, both taxes would increase the proportion of direct water consumption versus direct energy consumption. The average differences in the proportion change rates between the two taxes were 3.8, 7.8, and 9.7% for the low, medium, and high tax intensities, respectively. For the embodied-use nexus, the carbon tax could increase the proportion of energy-related water consumption versus water-related energy consumption. The average differences in the proportion change rates between the two taxes were 4.4, 8.4, and 10.2% for the low, medium, and high tax intensities, respectively. For the hybrid-use nexus, the effects of the taxes were similar to those for the direct-use nexus. • A dynamic CGE model is used for effect analysis under different taxes. • The effects of energy and carbon taxes on energy–water nexus are compared. • The direct-use, embodied-use and hybrid-use nexus are analyzed simultaneously. • The combined effects are simulated under different tax rates and time spans. [ABSTRACT FROM AUTHOR]

Reducing carbon emissions is part of an international agreement to alleviate the negative effects of climate change, and a carbon tax is a widely used measure to decrease carbon intensity. A carbon tax's impacts on economic development and carbon emissions reduction vary among sectors, and differentiated carbon tax rates across sectors may offer better potential for balancing the two objectives. However, seldom has any research proposed differentiated carbon tax rates. In this study, a carbon tax rate optimization method based on the computable general equilibrium (CGE) model is proposed, to more effectively control carbon emissions and reduce carbon intensity. Two alternative models are proposed: maximizing GDP and minimizing carbon emissions. China is adopted as a study case to demonstrate the method. The results show that an optimized taxation scheme is more effective in reducing the carbon intensity, and additional CO 2 can be reduced without additional GDP decline. Besides, the optimized taxation scheme could lead to greener energy structure. • CGE model is used for effect analysis under different taxation schemes. • Differentiated carbon taxation across sectors is proposed. • The optimized taxation scheme can decrease the carbon intensity. [ABSTRACT FROM AUTHOR]