Carbon tax for subsidizing photovoltaic power generation systems and its effect on carbon dioxide emissions

This paper proposes a new framework for evaluating quantitatively the effect of carbon taxation. In this study, the tax revenues are supposed to be used only as a subsidy for installing Photovoltaic Power Generation (PV) Systems on houses. The evaluation model developed in this study comprises three sequential modules. The first module is for estimating the demand for the PV system under the subsidy and the carbon taxation policy, the second is the module for life-cycle inventory analysis based on the modified Input–Output table, and the third is the module for calculating the amount of carbon-dioxide emissions from the final-demand vector of the Input–Output table. Major findings of this study are as follows: (1) The amount of CO2-emission reduction increases by advertising the PV system with subsidy policy even under the same tax-rate. (2) The CO2-payback time of the PV system reduces by half if the GDP is assumed not to change after the introduction of carbon taxation.