Analysis of the demand for fossil fuels such as oil and coal and low-carbon emissions based on the computable general equilibrium model

This paper introduced an environmental module for measuring carbon emissions and carbon tax strategies and a dynamic model to the Computable General Equilibrium (CGE) model to transform it into a dynamic model, which is capable of simulating and analysing various low-carbon emission reduction strategies. A case study was then conducted. A social accounting matrix was constructed. Subsequently, the carbon tax and subsidy strategies were dynamically analysed. The scenarios of increasing the carbon tax rate and subsidy were compared with the baseline scenario. The results indicated that a low-carbon emission reduction strategy that increases the carbon tax could effectively reduce oil and coal consumption and carbon emissions. As the carbon tax rate increased, both oil and coal consumption and carbon emissions decreased. Moreover, implementing a carbon tax subsidy could mitigate the negative impacts on economic development caused by the carbon tax.