Comparative Analysis of Carbon Reduction Policies: Cap-And-Trade in Shanghai Vs. Carbon Tax in British Columbia
Zixiao Zhang, MLWS 2024
Global Climate Change (GCC) has been a critical concern for decades, prompting international agreements like the Kyoto Protocol and the Paris Agreement to address emission reduction. Carbon pricing, including Carbon Tax (CT) and Cap-and-Trade (CAT) systems, has emerged as effective strategies for balancing economic growth with greenhouse gas (GHG) reductions. The Carbon Tax, exemplified by British Columbia's implementation in 2008, incentivizes reduced fossil fuel use and encourages low-carbon alternatives while providing tax exemptions to ease financial burdens. In contrast, the Cap-and-Trade system, such as Shanghai's launched in 2013, sets emission caps that allow companies to trade allowances, leading to significant GHG reductions while fostering economic growth. Comparative analyses indicate that CAT systems are generally more effective than CT policies in reducing emissions. The study concludes that a hybrid model, combining CAT as the primary strategy and CT as a supplementary measure, can optimize emission reduction efforts, promoting both environmental sustainability and economic stability.
