The Dual Effects of the Carbon Pricing Mechanism: A Balanced Path between Economic Costs and Environmental Benefits

DOI

10.2991/978-94-6463-874-5_65How to use a DOI?

Keywords

Carbon Pricing Economic Effect; Environmental Effect; Policy synergy Carbon neutrality

Abstract

Global climate governance increasingly relies on carbon pricing mechanisms to achieve emission reduction targets. As of 2024, 75 carbon pricing policies have been implemented globally, covering 24% of greenhouse gas emissions. As the largest carbon emitter, China launched its national carbon market in 2021 but still faces the challenge of balancing economic growth and low-carbon transformation. This study systematically assesses the economic and environmental effects of carbon pricing mechanisms (carbon taxes, carbon trading systems, and hybrid models) by comparing international practices (such as the EU carbon market and the Canadian carbon tax) with China’s policy framework. Hybrid mechanisms (such as the connection between China’s pilot markets and the national carbon market) can enhance policy flexibility and reduce the compliance costs of emission control enterprises. At the same time, it encourages technological innovation, such as hydrogen energy steelmaking projects. Finally, long-term decarbonization relies on technological transformation and policy coordination, such as the combination of the EU carbon market and renewable energy subsidies, to promote the average annual stable growth of wind power installed capacity. The research emphasizes the necessity of differentiated policy design (such as free quota allocation and carbon tax rebates). The above conclusion provides a feasible path for optimizing China’s carbon pricing framework and coordinating the “dual carbon” goals, highlighting the importance of cross-departmental policy coordination and risk adjustment carbon pricing mechanisms.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Shuming Zhang
PY  - 2025
DA  - 2025/11/03
TI  - The Dual Effects of the Carbon Pricing Mechanism: A Balanced Path between Economic Costs and Environmental Benefits
BT  - Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025)
PB  - Atlantis Press
SP  - 555
EP  - 563
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-874-5_65
DO  - 10.2991/978-94-6463-874-5_65
ID  - Zhang2025
ER  -