Abstract

Since the industrial revolution, the much greenhouse gases from human's activities have overused the atmosphere as the global public goods and caused the global warming, leading to many extreme problems of glaciers melting, sea level rising, high temperature and summer drought, torrential rains and sandstorm, which results in tragedy of the commons. It has posed a serious threat to human survival and the sustainable development of society, economy and environment. To prevent the catastrophic from global warming, the governments and social sectors focus on how to control greenhouse gas emissions and solve the contradiction between the economy and environment.

Nowadays the main global energy agencies and nations that advocate carbon emission have already taken CCS as the prime emission reduction technology, including IEA, IEF and OPE. Norway, America, EU, Canada and Australian have formulated development plans of CCS as an important part of national strategy. As the most coal producer and consumer in the world, and one of the countries with the largest carbon emission, the call for CCUS is increasingly high in China. At the present, CCUS has also been incorporate into the national medium and long term technology development plan.

However, CCUS is still in its early stage in China. CCUS must meet the challenge of popularization due to the short time of application in the domestic, the immature and high cost of technologyand the big financial deficit. It is significant to establish a system of public finance to alleviate the capital scarcity to popularize CCUS quickly and massively. In the background that CCUS becomes the new force to decrease the carbon emission, the new researches pay more and more attention to public finance policy about supporting the popularization of CCUS.

So far, the researches about CCUS have concentrated on application prospect, the economics and the legality, not the capital scarcity and public policy. In other words, only a handful of literature has mentioned that the government should introduce economic policy to promote the development of CCUS. Capital is the most critical factor which restricts the development of CCUS, so this paper takes it as breakthroughand applies a combination of theoretical and empirical, quantitative and qualitativeandmulti－disciplinary analysis methods to design the public finance policy about CCUS that not only solves the capital scarcity, but also provides a theoretical foundation for our public finance policy to popularize CCUS, based on the problems of our public finance policy in current stage, the experience from abroadand the assessment of the economic value of CCUS.

This paper that applies a combination of macro－economics and public economics is an applied research with 8 chapters.

Chapter 1 is introduction that describes the topic background, the research objective and significance, the research status at home and abroad, the research ideas, frameworks, content and methods of this paperand possible innovation.

Chapter 2 is theoretical basis about public product theory, externality theory, public finance theory, investment multiplier theory and principle of taxation briefly. And it analyses the theoretical and practical necessity of CCUS included in the public finance system.

Chapter 3 describes our CCUS technology system, technology development, the status of policy formulation, our public finance policy of supporting CCUS and its specific issues.

Chapter 4 describes the representativepracticeof public finance policy of CCUS in abroad, analyzes the characteristics of the policy and application of the applicability and particularity in china, based on the survey and summarizes the enlightment from the experience to provide us with evidences.

Chapter 5 establishes the evaluationmodel of CCUS to provide support to formulate public finance policy according to the enlightment in chapter 4. This chapter discusses the importance of CCUS evaluation, analyzes the composition of CCUS value－chainand the operation mode of its capital flow. Based on these analyses, this chapter constructs the evaluation model of CCUS. At last, this chapter shows the example analysis of the construction of CCUS evaluation model and specific application including value calculation.

Chapter 6 designs our CCUS public finance policy in view of the result of evaluation in chapter 5. This chapter explains the design thought of public finance policy which promotes the development of CCUS from the perspective of the policy objectives, principles and key positioning, and points out that we can establish CCUS public finance policy in accordance with expenditure policy and revenue policy, and then presents the important design of the expenditure policy and revenue policy about CCUS public finance policy from the policy connotation, policy instruments and specific policies.

Chapter 7 discusses some policy recommendations on the formation of CCUS public finance policy on the basis of policy objectives, policy framework and policy content.

Chapter 8 shows research conclusions and outlook, which summarizes the research conclusions of this paper and points out the shortcomings and future research directions of this study.

Based on the research content above, the important conclusions are：

（1）CCUS have particularity including the feature of quasi－public product and externality.

（2）The features of CCUS make market mechanism invalidation in its field, so there is a need for public finance policy. The governments are responsible for constructing a system of public finance which can overcome market failure effectively with public power.

（3）Solving the problems of our CCUS public finance policy can draw lessons from advanced foreign experience. Because of the short time of CCUS development in the domestic, inadequate investment, single investment subject, unstable investment channel, the lack of taxation policy, the imperfect law and regulationsand the unsound supervision system in the development of CCUS public finance policy, CCUS meets the challenges of unstable capital source, low fund guaranteeand the lack of investor confidence, which affect the stability of CCUS technology development and prevent CCUS from further enhance seriously. Some foreign countries, such as America, Norway, EU, Canada and Australian have paid high attention to this technology and have formulated a series of public finance policy to promote the development of CCUS. With clear objectives and sound law, these policies have flexibility in the choice of public fund, government subsidies, research subsidies, tax preference policy, imposition of carbon tax and other policy instruments, which offer us a lot of enlightment to formulate CCUS public finance policy.

（4）The evaluation of CCUS quantifies its economic value that is a necessary technological mean to provide fund supportand is also the significant basic work to build our CCUS public finance policy. Establishing the evaluation model of CCUS that can afford scientific bases to make decisions about funding amount, input methods, tax system and other matched policies.

（5）Our CCUS public finance policy is positioned as public finance expenditure policy and revenue policy. In the current situation that CCUS demands much capital, the long－term investment mechanism dominated by government is not only a need for the sustainable development of CCUS, but also an inevitable orientation of market mechanism in the development of CCUS. According to the problems of our CCUS public finance policy, government takes measures to ensure the stable increase and reasonable use of capital by improving budget of the central government, designing rational ways of public finance subsidies and enhancing the level of government direct investment. Moreover, government should establish CCUS public fiscal revenue policy conformed to the objectives of CCUS development and planning to promote the sustainable development. To offer CCUS diversified capital source, the government needs to put tax preference policy into practice and integrate existing taxes to motivate enterprises. Meanwhile, the government should carry out imposition of carbon tax appropriately which follows the international trends to compensate for CCUS public finance expenditures and finally to establish the support channel of public finance fund and incentive system stimulating the industrial development of CCUS.

（6）What's important for CCUS public finance policy to be implemented successfully is a healthy orderly efficient system of public finance policy. Our CCUS public finance policy support system is based on CCUS evaluation, cored ofpublic finance expenditure policy and revenue policy, assisted with finance support policies, law and regulations, the system of international communication and cooperation and the construction of public consciousness, which is interactional and complementary. Formulating the system of CCUS public finance policy needs the improvement of government support, the construction of diversified finance system, the establishment of systemic legal framework that promotes the development of technology and CCUS industry, the enhancement of international communication and cooperation, the construction of effective public participation. This system of public finance policy can provide the development of CCUS with needed capital support, legal support, international view and ideological guarantee.

The progresses in this paper are：

（1）Establishes the evaluation model of CCUS. According to the treating processes of carbon dioxide, this paper analyses the composition of CCUS value－chainand the operation mode of its capital flow. Based on these analyses, this chapter construct the evaluation model of CCUS, which offer scientific bases to formulate investment decision and national public finance policy.

（2）Design the public finance policy to promote the early development of CCUS. In view of our national conditions, the development situation of CCUS and the advanced foreign experience, this paper explains the design thought of public finance policy with two aspects of expenditure policy and revenue policyfrom the perspective of the policy objectives, principles and key positioning to solve the problem of the big financial deficit.

（3）Construct a support system of public finance policy to promote the early development of CCUS. Based on the design of CCUS public finance policy, this paper constructs the objectives and framework of public finance policy to promote the early development of CCUS and provides government with recommendations about the formation of the system to formulate policies.

Keywords:carbon dioxide; CCUS; public financial support; public finance policy