Abstract
On the basis of provincial data on carbon dioxide and sulfur dioxide emissions, GDP, and the energy price index, and using modern econometric methods, we examine the benefit (carbon dioxide emissions reduction), collateral benefit (sulfur dioxide emissions reduction) and related costs (reduction in GDP) of carbon taxes. We also offer an assessment of the scale and burden of environmental taxes on economic growth, as well as what strategic premises underlie the deliberations about carbon taxes by makers of policies regarding taxation and income distribution. Building on the basis of research on these two topics, and borrowing from international experiences in carbon taxes, we put forward four options for carbon dioxide emission reduction policies. And through comparison among the four, we suggest that carbon tax reform start with that of the consumption tax.