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GTAP Resource #2692

"Leveling the Global Playing Field: Taxing Energy Use and Carbon Emissions"
by McDonald, Scott, Sherman Robinson and Karen Thierfelder

This study uses a Social Accounting Matrix (SAM) representation of the GTAP database together with satellite accounts for the volumes of energy commodities used and volumes of emissions (primarily CO2) to derive estimates of the implied taxes on carbon emissions by region, energy commodity, and purchasing agent. Identifying existing differences in incentives represents an important first step in response to the threat of climate change. A series of experiments are conducted using the GLOBE_EN computable general equilibrium (CGE) model to estimate the impact of reducing the differences in tax structures within and across regions on implied CO2 emissions.

When the average EU energy tax rates – the highest rates - are applied to all developed countries the model indicates that there would be substantial reductions in global energy use and CO2 emissions. If these rates are extended to all regions there are further reductions in energy use and emissions but the welfare costs for developing countries are appreciable. Subsequent simulations consider the impact of replacing energy use taxes with taxes on CO2 emissions - initially as revenue neutral taxes within regions and then as common carbon tax rates across developed and all regions. By changing tax instruments, one eliminates a distortion for targeting CO2 emissions. Additional simulations consider the effect of using taxes on CO2 emissions to attain carbon emission targets.

Resource Details (Export Citation) GTAP Keywords
Category: 2008 Conference Paper
Status: Published
By/In: Presented at the 11th Annual Conference on Global Economic Analysis, Helsinki, Finland
Date: 2008
Created: Thierfelder, K. (4/14/2008)
Updated: Batta, G. (4/15/2008)
Visits: 2,309
No keywords have been specified.

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