1.1. Introduction
With the goal of carbon neutralization proposed by China’s government, the low-carbon transformation of the energy economy has become an inevitable trend [
1]. As the world’s largest energy consumer, China’s CO
2 emissions have risen as a result of its rapid economic growth. According to the 2021 BP World Energy Statistical Yearbook [
2], China’s carbon dioxide emissions were 9.90 billion tons in 2020, about 30.66% of the global carbon dioxide emission. Even though China’s CO
2 emission growth rate has slowed down in recent years, achieving the carbon peak goal in 2030 is a difficult challenge especially when industrialization and urbanization are advancing rapidly. According to the Environmental Kuznets Curve (EKC), when the economy grows to a certain extent, the environmental quality will be improved with the continuous growth of per capita income [
3]. The EKC has been confirmed in many developed countries. To reduce CO
2 emissions and ensure China’s sustainable development, the energy reform of traditional industries is imperative.
As China’s traditional heavy industry, the mining industry (MI) is vital to the national economy and infrastructure construction. Although the central government has put forward the control for the total energy consumption and intensity and implemented strict control over all kinds of coal power projects, optimizing the energy structure and reducing coal consumption has been a gradual process. At present, coal is still China’s primary energy source. According to the 2021 BP World Energy Statistical Yearbook [
2], China’s coal energy consumption accounted for 56.56% of its national energy consumption in 2020. Therefore, ensuring China’s coal supply at this stage is essential for energy security. On the other hand, the MI provides an important material guarantee for China’s industrial development and various infrastructure construction, which makes it a pillar industry for China’s modernization. However, the MI’s CO
2 emission cannot be ignored as a high energy-consuming industry. Based on the China Energy Statistical Yearbook [
4], China’s MI’s CO
2 emission in 2019 was about 747 million tons, which exceeded the total CO
2 emission of many countries in 2019. Reducing the MI’s CO
2 emissions and improving its energy efficiency are essential for carbon neutralization.
A variety of policy means must be employed to decrease CO
2 emissions. The carbon trade market and carbon tax have attracted extensive attention in recent years. The carbon trade market means that the government department formulates the total carbon emission and allocates carbon emission quotas to each enterprise participating in the carbon market. If the enterprise’s CO
2 emission is below the quota, the enterprise sells the remaining quota to obtain income. If the enterprise’s CO
2 emission exceeds the quota, it must purchase quotas from other enterprises. Since 2011, China has carried out the pilot work of the carbon market construction in seven provinces and cities, which has taken an essential step towards the national carbon emission reduction and carbon peak goal in 2030 [
5,
6,
7,
8]. In 2021, the national carbon emission trading market launched online trading, and more than 2000 key emission units were included in the market. China’s carbon market will become the largest market in the world, covering about 4.5 billion tons of CO
2 emission [
9]. However, the carbon market mainly covers the power generation industry and key emission units. Even when the carbon market is mature in the future, it is still difficult to cover the whole industry.
Conversely, allocating carbon emission quotas can also be very complex as the carbon tax is a price policy. The government department stipulates the tax rate, and the market determines the carbon dioxide emission reduction. Although the carbon tax policy cannot control the total amount of carbon dioxide emission, it has a lower administrative cost, broader coverage, and is easier to coordinate with other policies [
10]. On the other hand, the carbon tax policy can also increase government revenue to enable the government to continue its investments in emission reduction projects to form a sustainable emission reduction path. As a carbon tax is a valuable way to control carbon emission, Japan, Australia, the Netherlands, Norway, Sweden, and Colombia have successively implemented carbon tax policies [
11]. To sum up, the carbon tax is essential for rationalizing the policy system and accelerating China’s carbon neutralization process.
1.2. Literature Review and Motivation of the Paper
In recent years, the carbon tax has been a hot issue in economics. Although China’s government has begun to levy resource taxes on fossil fuels, it has not yet set up a tax aimed explicitly at carbon dioxide emission. The carbon tax is a type of environmental tax, and environmental tax is the general name of a series of tax systems aimed at protecting the ecological environment. The research on environmental tax can be traced back to Arthur Cecil Pigou [
12]. Pigou first proposed to make up the gap between the private cost and social cost of polluters’ production through levying a tax, which is the “Pigouvian tax”. Tullock [
13] pointed out that the Pigouvian tax can achieve a “double benefit” effect through the internalization of external costs. Pearce [
14] proposed the concept of “double dividend” when studying the influence of the carbon tax on global warming. The research pointed out that levying carbon tax can reduce carbon dioxide emission and support environmental protection services or economic development. There has been long-standing research on carbon tax in academia, as most economists believe that carbon tax policy can bring multiple benefits. Newell and Pizer [
15] believe that the carbon tax is generally higher than the carbon market under uncertain terms of net social welfare. The research of Wittneben [
10] and Goulder and Schein [
16] showed that the total administrative cost of carbon tax policy is low, and it is easy to coordinate with other carbon emission reduction policies. However, some scholars question the carbon tax. The enterprises’ profits will reduce because the carbon tax policy raises carbon dioxide emission costs. A relatively higher carbon tax rate may inhibit the development of enterprises, while a relatively lower tax rate cannot reduce carbon dioxide emission [
17]. Newell and Pizer [
18] believed that a carbon tax will encounter excellent resistance in practice, and levying a carbon tax can be difficult. Chen and Chen [
19] think that carbon tax raises the financial burden of enterprises. He et al. [
20] showed that a carbon tax will reduce the savings and investment of enterprises and squeeze the living space of small and medium-sized enterprises. In conclusion, the formulation of the carbon tax policy is a very complex problem.
In recent years, as the world pays more and more attention to carbon dioxide emissions reduction, carbon tax policies have begun to attract scholars’ attention. Ghaith and Epplin [
21] studied how the carbon tax influences the household electricity cost in the U.S and estimated whether it is sufficient to encourage households to install grid-connected solar or wind energy systems. Chen and Hu [
22] explored the behavior strategies of producers under different carbon taxes and subsidies. They found that levying carbon tax can provide more incentives for the manufacturing industry than low-carbon technology subsidies. The research of Zhou, An, Zha, Wu, and Wang [
11] showed that adopting the block carbon tax can visibly reduce the tax burden of enterprises and encourage enterprises to produce low-carbon products. Brown et al. [
23] showed that the carbon tax policy can increase employment opportunities in the United States. Denstadli and Veisten [
24] believed that Norwegian tourists are willing to accept the higher air costs to pay the carbon tax. Cheng et al. [
25] studied how the carbon tax influences energy innovation in the Swedish economy. They found that when the rate exceeds a certain point, increasing the carbon tax rate will not promote energy innovation. Gokhale [
26] believed that Japan’s carbon tax rate is too low to achieve carbon emission reduction targets in 2030. Hammerle, et al. [
27] investigated the citizens’ acceptance of carbon tax. They found that supporting low-income families is conducive to the promotion of the carbon tax policy.
Due to the proposal of China’s carbon peak and carbon neutralization goal, the academic heat on carbon tax policy is gradually increasing. Although China has not officially launched the carbon tax policy, its research has attracted more and more attention from scholars. The research directions mainly focus on the influence of the carbon tax on economic growth and the actual effect of CO
2 emission reduction. Zhou et al. [
28] discussed the influence of the carbon tax on China’s transportation industry with the CGE model. They found that the carbon tax can bring the most negligible negative impact on the transportation industry. Shi et al. [
29] discussed how different carbon tax rates influence China’s construction industry’s energy consumption. The results showed that when the carbon tax is 60 yuan/ton, it can achieve the emission reduction target and minimize the negative impact. Li et al. [
30] took Shanxi Province of China as an example to prove that carbon tax is instrumental in relieving the employment pressure in coal-rich regions. Hu et al. [
31] contrasted the resource tax and carbon tax from different aspects. They found that the carbon tax’s comprehensive performance is much better than the resource taxes.
The effect of the carbon tax on CO
2 emission reduction is associated with energy substitution [
32]. Levying a carbon tax will cause energy price changes, as the energy cost increases based on its carbon dioxide emission coefficient. Manufacturers will prefer clean energy to replace high-carbon energy. Furthermore, the carbon tax can raise the total energy cost and reduce the relative cost of other input factors, making producers more inclined to use other input factors to replace energy input. Many scholars have studied energy price elasticity and input factors price elasticity in China, but these studies do not consider the relevance between them [
33,
34,
35]. Cho et al. [
36] believed that the price change of a single energy type can lead to the substitution among energy and lead to the substitution among input factors. Therefore, the two kinds of price elasticity should be considered. Pindyck [
37] proposed a two-stage translog cost function to include the correlation of energy price elasticity and input factors price elasticity. In recent years, many pieces of literature have used this method to calculate price elasticity [
38,
39,
40,
41,
42,
43]. Based on these studies, this paper uses the two-stage translog cost function to estimate the price elasticity of the energy and input factors in the MI. Furthermore, based on the price elasticity, the influence of the carbon tax on the energy and carbon performance (ECP) of China’s MI is also explored. The contributions are as follows. Firstly, different from the previous studies [
44,
45,
46], based on estimating the carbon tax’s influence on carbon dioxide emission reduction, a non-radial directional distance function (NDDF) is adopted to calculate the ECP of the MI and the influence of the carbon tax on ECP is explored. Secondly, the translog cost function is employed to measure the price elasticity of energy and input factors in China’s MI, which supplements the existing literature. Finally, according to the empirical results, corresponding policy recommendations are proposed which are vital to achieving China’s carbon peak and carbon neutralization goals.
The second part describes the methodologies and data while the third part calculates the price elasticity of energy and input factors in China’s MI. The fourth part estimates the MI’s carbon dioxide emission reduction potential and the influence of carbon tax on the MI’s ECP. In the fifth part, the corresponding policy suggestions are put forward according to the empirical results of this paper.