THIS DOCUMENT STUDIES the sensitivity of the optimal carbon tax formulation derived by Golosov, Hassler, Krusell, and Tsyvinski (2014) (“GHKT”). GHKT showed that, under certain assumptions, the optimal carbon tax–GDP ratio can be solved for in closed form, and does not depend on the paths of future output, consumption, and technological change. These assumptions include logarithmic preferences ...

THIS DOCUMENT STUDIES the sensitivity of the optimal carbon tax formulation derived by Golosov, Hassler, Krusell, and Tsyvinski (2014) (“GHKT”). GHKT showed that, under certain assumptions, the optimal carbon tax–GDP ratio can be solved for in closed form, and does not depend on the paths of future output, consumption, and technological change. These assumptions include logarithmic preferences ...

With the Opposition party and various interest groups objecting to the Australian Government’s proposal of a carbon tax, public opinion about pricing carbon is divided. Some of the disagreement may be due to misunderstandings about the effects of the policy. In an effort to clarify some of the issues, this paper reports the simulated effects of a carbon tax of $23 per tonne of carbon dioxide on...

During the last decade, Norway has carried out an ambitious climate policy by implementing a relatively high carbon tax already in 1991. The Norwegian carbon taxes are among the highest in the world. Data for the development in CO2 emissions provide a unique opportunity to evaluate carbon taxes as a policy tool for CO2 abatement. We combine a divisia index decomposition method and applied gener...

Objective: This paper, using a Computable General Equilibrium (CGE) model with highly disaggregated household groups, analyses the distributional impact of a carbon tax in a developing economy. Scope: Indonesia, one of the largest carbon emitters among developing countries, is utilized as a case study in this paper. Conclusions: The result suggests that, in contrast to most industrialised count...

The government as a policy maker wishing to promote remanufacturing and proper disposal of hazardous old products which are harmful to environment has taken many actions, ranging from carbon regulation and financial incentives such as trade-in subsidy. However, carbon tax can result in loss of profit for firms to some degree, so the government has to give other subsidy to balance the profits an...

Integrated assessment models (IAMs) combine simple models of the carbon cycle and of the response of the climate system to changes in atmospheric carbon dioxide (CO2) concentration with models of economic growth that incorporate the effects of imposing a carbon tax. They calculate the resulting social utility after estimated damages from climate change and costs of measures adopted – as a resul...

A simulation model of international tourist flows is used to estimate the impact of a carbon tax on aviation fuel. The effect of the tax on travel behaviour is small: A global $1000/tC would change travel behaviour to reduce carbon dioxide emissions from international aviation by 0.8%. This is because the imposed tax is probably small relative to the air fare. A $1000/tC tax would less than dou...

1 Background Uniform carbon tax and cap-and-trade system are the first choices according to the Kyoto protocol when the policy makers consider the carbon control policies. As is well known, these two options theoretically give identical carbon emission distribution. However, in reality, carbon tax has hardly been accepted by industries while emission certificate as a part of cap-and-trade syste...