After twenty years of democracy, the most pressing problem facing South Africa is the absence of sustainable economic growth and job creation. Since 1994, major economic reforms and adjustments have been made, which were seen as a requirement for achieving economic growth and development. However, despite these efforts, unemployment in South Africa remains a challenging problem. The main objectives of the study are, firstly, to examine South Africa’s economic policy initiatives implemented since 1994. Secondly, to determine whether the issue of unemployment has improved under a review of the economic policies that have been implemented since 1994. Finally, this is achieved by examining the changes in employment and, more specifically, the changes in the cost-neutral change in the capital/labour (K/L) ratio between 1995 and 2013 by means of a historical Computable General Equilibrium (CGE) modelling approach. The literature study focuses on employment, growth and human capital theories to reflect on the present state of knowledge and to contribute to evidence-based policy debates. It also provides an overview of South Africa’s economic policy, programmes and strategy decisions and of the country’s economic stance since the transition to democracy in 1994, with a specific focus on the labour market. Historical CGE modelling, applied using the PEKGEM – a dynamic CGE model of the South African economy, was chosen to examine the relationship between growth and structural changes under the different economic and development policies in South Africa between 1995 and 2013. The primary aim was to determine how the dynamics and structure of South African employment changed during the period in which these policies were implemented, using the historical CGE modelling approach. The focus was primarily on changes in the capital and labour markets across all sectors over this period. The results indicate an increase in capital relative to labour (K/L) over the period 1995 to 2013, despite the increase seen in the rental price of capital relative to wages (PK/PL). To better understand the structural shift, the theoretical specification of the capital/labour preference within PEKGEM was considered. The results suggests that at any given ratio of real wages relative to the rental price of capital, industries would choose a K/L ratio 8.1 per cent higher in 2013 than it would have in 1995. Considering the fact that South Africa has a comparative advantage in unskilled labour-intensive goods, especially given the country’s abundance of labour and high levels of unemployment, the shortcomings of South Africa’s economic policies in addressing the pressing issue of unemployment is emphasised. / MCom (Economics), North-West University, Potchefstroom Campus, 2015

After twenty years of democracy, the most pressing problem facing South Africa is the absence of sustainable economic growth and job creation. Since 1994, major economic reforms and adjustments have been made, which were seen as a requirement for achieving economic growth and development. However, despite these efforts, unemployment in South Africa remains a challenging problem. The main objectives of the study are, firstly, to examine South Africa’s economic policy initiatives implemented since 1994. Secondly, to determine whether the issue of unemployment has improved under a review of the economic policies that have been implemented since 1994. Finally, this is achieved by examining the changes in employment and, more specifically, the changes in the cost-neutral change in the capital/labour (K/L) ratio between 1995 and 2013 by means of a historical Computable General Equilibrium (CGE) modelling approach. The literature study focuses on employment, growth and human capital theories to reflect on the present state of knowledge and to contribute to evidence-based policy debates. It also provides an overview of South Africa’s economic policy, programmes and strategy decisions and of the country’s economic stance since the transition to democracy in 1994, with a specific focus on the labour market. Historical CGE modelling, applied using the PEKGEM – a dynamic CGE model of the South African economy, was chosen to examine the relationship between growth and structural changes under the different economic and development policies in South Africa between 1995 and 2013. The primary aim was to determine how the dynamics and structure of South African employment changed during the period in which these policies were implemented, using the historical CGE modelling approach. The focus was primarily on changes in the capital and labour markets across all sectors over this period. The results indicate an increase in capital relative to labour (K/L) over the period 1995 to 2013, despite the increase seen in the rental price of capital relative to wages (PK/PL). To better understand the structural shift, the theoretical specification of the capital/labour preference within PEKGEM was considered. The results suggests that at any given ratio of real wages relative to the rental price of capital, industries would choose a K/L ratio 8.1 per cent higher in 2013 than it would have in 1995. Considering the fact that South Africa has a comparative advantage in unskilled labour-intensive goods, especially given the country’s abundance of labour and high levels of unemployment, the shortcomings of South Africa’s economic policies in addressing the pressing issue of unemployment is emphasised. / MCom (Economics), North-West University, Potchefstroom Campus, 2015

Para atender os seus compromissos climáticos, o Brasil planeja elevar a participação das fontes renováveis, além da hidrelétrica, na oferta de eletricidade. Segundo o Plano Decenal de Expansão de Energia (PDE 2026), a expansão da capacidade instalada no período 2017-2026 será predominantemente com investimentos na geração à gás, eólica e solar. No entanto, as áreas disponíveis e aptas para tais projetos estão concentradas, em sua maioria, nas regiões com menor PIB per capita, a exemplo da Nordeste, de modo que a expansão da capacidade instalada pode ter implicações econômico-regionais, que podem ser intensificados a depender da configuração da matriz elétrica. Não obstante a importância da temática, ainda há uma evidente lacuna na literatura. Este trabalho, portanto, analisa essa questão com o objetivo de verificar quais os impactos econômicos e regionais dos investimentos em geração de energia elétrica, com base nos cenários de expansão delineados no PDE 2026. Para tanto, é utilizado o TERM-BR10, modelo de equilíbrio geral computável, regional (bottom-up), dinâmico-recursivo e para o qual foi desenvolvido um módulo específico para simulações com o setor elétrico em que são representados oito tipos de geração de eletricidade (eólica, solar, hidráulica, biomassa, térmicas à gás, carvão, diesel e óleo combustível e outras térmicas) e em que se permite a substituição entre os diferentes tipos de geração em nível regional. Para as simulações, assume-se como linha de base a expansão prevista no Caso 8 - Expansão Dirigida, do PDE 2026, por ser a que tem menos interferência de diretrizes políticas. Já as expansões previstas para o Caso 1 (cenário de referência), o Caso 4 (redução no custo de investimento na geração solar) e o Caso 5 (sem novas usinas hidrelétricas) foram adotadas como cenários alternativos. Os resultados obtidos evidenciam que, em relação a linha de base, um plano de expansão com maior inserção de geração solar (Caso 4) pode impactar elevação acumulada de 0,45% no PIB brasileiro e de até 2,15% em regiões específicas, sendo as áreas mais beneficiadas aquelas da região Nordeste do país. Também verifica-se que um cenário sem novas usinas hidrelétricas (UHE) não implica perdas ao Brasil em termos de PIB ou emprego, o que é particularmente relevante face as exigências ambientais cada vez mais rigorosas sob esse tipo de geração. Ademais, foi também observado que as diretrizes de política inseridas nos cenários alternativos do PDE têm benefícios distributivos, com impactos positivos maiores para as regiões mais pobres e famílias com renda mais baixa. / To comply with climate agreements, Brazil intends to raise the share of non-hydro renewables in electricity supply. According to the Brazilian Decennial Energy Plan (PDE 2026), the country will expand its installed capacity in the period 2017-2026 mostly by investments in gas, wind and solar sources. However, areas suitable for those projects are regionally concentrated and, in some cases, in the poorest regions such as the Northeast. Hence, the expansion of power supply also have economic and regional implications that could be enhanced according to the configuration of the electricity matrix. Despite that, there is still a gap in the literature regarding to this topic. We explore this analyzing the economic and regional impacts of the investments in electricity generation, under various policy scenarios provided by the PDE 2026. For that, we apply a regional recursive-dynamic CGE model for Brazil, TERM-BR10, specially enhanced to deal with electricity features. TERM-BR10 has eight electricity generation types (wind, solar, hydropower, biomass, gas, diesel and oil, coal and others) and allows substitution between them in a regional level. For simulation purposes, we assume the expansion of electricity matrix of Case 8 from PDE 2026 as our baseline. In fact, this expansion is the one with less policy interventions. As our policy scenarios we assume: Case 1 (reference scenario), Case 4 (scenario with reduction in cost of investment for solar) and Case 5 (no new hydro dams). Our results show that in comparison to the baseline a supply plan with more insertion of solar source, as Case 4, could increase the national GDP by 0.45% and by 2.15% in specific regions. In this case, the Northeast regions are the most benefited. The results also show that a scenario without new hydro dams does not imply in economic loss, in terms of national GDP or employment. This is quite relevant, specially when take into account that environmental concerns have been raising for hydro projects. Besides, we also came to the conclusion that policy guidelines have welfare and distributive benefits, with greater impact to poorest regions and low income households.

This thesis investigates how different policies and measures designed to reduce CO2 emissions – i.e. carbon tax and energy efficiency policies – in South Africa will affect South African households. The contribution of this study lies with evaluating South African households at a disaggregated income level from low to high-income appreciating the fact that households at different levels are impacted differently by the implementation of policies at national level. In order to evaluate such impacts, the study started with profiling the households’ electricity consumption patterns in South Africa through the years and comparing them with the rest of the world. The next objective was to comprehend – implementing an Auto Regressive Distributed Lag (ARDL) econometric model – the determinants of electricity consumption of the residential sector in the country. Finally, by using a Computable General Equilibrium (CGE), the study examined various policy scenarios designed to reduce emissions and its effects on different households, particularly the low-income ones that do not have the capital to absorb the impacts. The results showed that low-income households are affected differently than the rest of South African households by the national policies implemented to reduce CO2 emissions and combat climate change. However, given the way the carbon tax and energy efficiency policies are designed, low-income households should be affected minimally. / Thesis (PhD)--University of Pretoria, 2020. / National Research Foundation (NRF) / Economics / PhD (Economics) / Unrestricted

Strutturata in 3 articoli, la tesi analizza il ruolo delle foreste all’interno delle politiche climatiche. Il Capitolo 1 valuta diversi tentativi di rappresentazione della mitigazione land-based - di cui il carbonio forestale rappresenta un importante componente - e offre spunti per migliorare la ricerca in quest’ambito. I Capitoli 2 e 3 presentano due diversi approcci modellistici sul ruolo delle foreste nella mitigazione climatica, all’interno di un modello di equilibrio generale computazionale. Entrambi i metodi assumono un impegno unilaterale Europeo nel ridurre del 20% e 30% le emissioni di CO2 entro il 2020. Il primo approccio, sviluppato nel Capitolo 2, viene rifinito nel Capitolo 3, dove le scelte di allocazione della terra risultano pienamente endogene e il carbonio derivante dall’intensificazione e l’estensificazione forestale è modellizzato separatamente. L’attribuzione di un ruolo alle foreste riduce costi della politica climatica, corrispondenti prezzi del carbonio, e l’effetto leakage. I risultati si presentano qualitativamente simili per entrambe le analisi. Nonostante le foreste europee possano alleviare lo sforzo di mitigazione dei settori energy-intensive, la loro contribuzione come unica strategia di abbattimento risulta insufficiente per il raggiungimento dei targets di riduzione delle emissioni. Un miglior risultato si otterrebbe se altre regioni prendessero parte agli accordi di stabilizzazione climatica. / This thesis, structured in 3 Chapters, analyses the role of forests within a climate policy framework. Chapter 1 critically assesses main existing approaches attempting to represent land-based mitigation, of which forest carbon is a prominent component. It offers important insights on aspects to be improved when modelling land-using activity and forestry. Chapters 2 and 3 present two different methods to model the role of forests in climate mitigation within a global computable-general-equilibrium-model (CGE). Both approaches assume Europe independently committed to reduce CO2 emissions of 20% or 30% by 2020. The first methodology, presented in Chapter 2, is further refined in Chapter 3, to render landowners’ choices on land allocation fully endogenous, and to model carbon from forestry intensification and extensification separately. Envisioning a role for forests reduces climate policy costs, the corresponding carbon price, as well as the leakage effect. These outcomes result qualitatively similar in sign for both analysis. Although European forests can alleviate the burden on energy-intensive sectors, their contribution as a stand-alone abatement strategy results insufficient to comply with the emissions reduction targets. A better result would have been reached if other regions were allowed to take part in climate stabilization agreement.

This dissertation contains three essays on environmental economics and on credit market imperfections. The literature on carbon tax incidence generally finds that carbon taxes have a regressive impact on the distribution of income. The main reason for that finding stems from the fact that poor households spend a larger share of their total expenditure on energy products than the rich households do. This literature, however, has ignored the impact of carbon taxes on income stemming from changes in relative factor prices. Yet, changes in household welfare depend not only on variations in commodity prices, but also on changes in income. Chapter 1 provides a comprehensive analysis of the distributional impact of carbon taxes on inequality by considering both demand-side and supply-side channels. We use a multi-sector, multi-household general equilibrium model to analyze the distributional impact of carbon taxes on inequality. Using equivalent income as the household welfare metric, we apply the Shapley value and concentration index approaches to decomposing household inequality. Our simulation results suggest that carbon taxes exert a larger negative impact on the income of the rich than that of the poor, and are thereby progressive. On the other hand, when assessed from the use side alone (i.e., commodity prices alone), our results confirm previous findings, whereas carbon taxes are regressive. However, due to the stronger incidence of carbon taxes on inequality from the income side, our results suggest that the carbon tax tends to reduce inequality. These findings further suggest that the traditional approach of assessing the impact of carbon taxes on inequality through changes in commodity prices alone may be misleading. Chapter 2 investigates the economic impacts of creating an emissions bubble between Canada and the US in a context of subglobal participation in efforts to reduce pollution with market based-instruments. One of the advantages of an emissions bubble is that it can be beneficial to countries that differ in their production and consumption patterns. To address the competitiveness issue that arises from the free-rider problem in the area of climate-change mitigation, we consider the imposition of a border tax adjustment (BTA) - a commonly suggested solution in the literature. We develop a detailed multisector and multi-regional general equilibrium model to analyze the welfare, aggregate, sectoral and trade impacts of the formation of an emissions bubble between Canada and the US with and without BTA. Our simulation results suggest that, in the absence of BTA, the creation of the bubble would make both countries better off through a positive terms-of-trade effect, and more importantly, through a significant reduction in Canada’s marginal abatement cost. The benefits of these positive effects would spill over to the non-participating countries, leading them to increase their trade shares in non-emissions-intensive goods. Moreover, the simulation results also indicate that a unilateral implementation of a BTA by any one of the two countries is welfare deteriorating in the imposing country and welfare improving in the other. In contrast, a joint implementation of a BTA by the two countries would make Canada better off and the US worse off. Chapter 3 shows that learning by lending is a potential channel of understanding the business cycle fluctuation under an imperfect credit market. An endogenous link among the learning parameter, lending rates, and the size of investment makes it possible to generate an internal propagation even due to a temporary shock. The main finding of this chapter is the explanation of how ex post non-financial factors such as information losses by individual agents in a credit market may account for a persistence in real indicators such as capital stock and output.

This dissertation contains three essays on environmental economics and on credit market imperfections. The literature on carbon tax incidence generally finds that carbon taxes have a regressive impact on the distribution of income. The main reason for that finding stems from the fact that poor households spend a larger share of their total expenditure on energy products than the rich households do. This literature, however, has ignored the impact of carbon taxes on income stemming from changes in relative factor prices. Yet, changes in household welfare depend not only on variations in commodity prices, but also on changes in income. Chapter 1 provides a comprehensive analysis of the distributional impact of carbon taxes on inequality by considering both demand-side and supply-side channels. We use a multi-sector, multi-household general equilibrium model to analyze the distributional impact of carbon taxes on inequality. Using equivalent income as the household welfare metric, we apply the Shapley value and concentration index approaches to decomposing household inequality. Our simulation results suggest that carbon taxes exert a larger negative impact on the income of the rich than that of the poor, and are thereby progressive. On the other hand, when assessed from the use side alone (i.e., commodity prices alone), our results confirm previous findings, whereas carbon taxes are regressive. However, due to the stronger incidence of carbon taxes on inequality from the income side, our results suggest that the carbon tax tends to reduce inequality. These findings further suggest that the traditional approach of assessing the impact of carbon taxes on inequality through changes in commodity prices alone may be misleading. Chapter 2 investigates the economic impacts of creating an emissions bubble between Canada and the US in a context of subglobal participation in efforts to reduce pollution with market based-instruments. One of the advantages of an emissions bubble is that it can be beneficial to countries that differ in their production and consumption patterns. To address the competitiveness issue that arises from the free-rider problem in the area of climate-change mitigation, we consider the imposition of a border tax adjustment (BTA) - a commonly suggested solution in the literature. We develop a detailed multisector and multi-regional general equilibrium model to analyze the welfare, aggregate, sectoral and trade impacts of the formation of an emissions bubble between Canada and the US with and without BTA. Our simulation results suggest that, in the absence of BTA, the creation of the bubble would make both countries better off through a positive terms-of-trade effect, and more importantly, through a significant reduction in Canada’s marginal abatement cost. The benefits of these positive effects would spill over to the non-participating countries, leading them to increase their trade shares in non-emissions-intensive goods. Moreover, the simulation results also indicate that a unilateral implementation of a BTA by any one of the two countries is welfare deteriorating in the imposing country and welfare improving in the other. In contrast, a joint implementation of a BTA by the two countries would make Canada better off and the US worse off. Chapter 3 shows that learning by lending is a potential channel of understanding the business cycle fluctuation under an imperfect credit market. An endogenous link among the learning parameter, lending rates, and the size of investment makes it possible to generate an internal propagation even due to a temporary shock. The main finding of this chapter is the explanation of how ex post non-financial factors such as information losses by individual agents in a credit market may account for a persistence in real indicators such as capital stock and output.

Festivals have become a global phenomenon and now serve as a platform to promote the leisure and tourism industry within a nation. These events have an undisputed economic effect – not only on the hosting community – but also on the global community. Despite the encouraging community support and the socio-economic impact and spin-offs that are generated by means of such events, the financing of art festivals remains an intricate issue. The fact remains that not all festivals are financially self-sustainable and so require extensive sponsorship in order to ensure the continuation of the event. Limited government funding available due to budget constraints curbs the financial support forthcoming from municipalities and so forces event organisers to seek alternative funding to ensure the survival and feasibility of events. This responsibility places an additional burden on event organisers and so necessitates the use of assessment tools in order to convince private and public institutions or individuals to invest in such events through sponsorships. During an extensive literature study, it became apparent that the need exists to re-assess fully the economic impact analysis of events. The literature revealed that varying models are used to conduct economic impact analyses. In order to establish a concise framework within which to conduct an economic assessment, it was decided to select only the most-used models – Computable General Equilibrium (CGE), Input-Output (I-O) and Social Accounting Matrix (SAM). The dilemma facing tourism economists is to determine which economic assessment approach is most effective as every methodology has its own advantages and disadvantages. In addition, the type and size of an event also plays a fundamental role when selecting an appropriate measuring tool. This research was further motivated because of the existing gap that exists in the South African context for no study has yet been conducted where the various models that assess economic impact have been applied to the collated data of the same event. This study thus aims to provide an overview and a comparison of competing and supplementing methodologies for modelling the regional economic dynamics and the impacts of events. It further investigates the manner in which regional CGE, I-O and SAM based (multiplier) models operate towards capturing the region-specific, inter-regional and multi-regional production, consumption and factor market patterns as result of expenditures incurred during events. An analysis of the virtues and the limitations of these economic assessment methodologies suggests that it may be the considerations such as the data collection/compilation, expected output, research objectives and costs involved that ultimately determine the choice of a specific modelling framework. While addressing the problem stated above, this study produced the following three articles that are now embodied in the work: * Article 1 - “Critical assessment of economic impact analyses of the ABSA Klein Karoo National Arts Festival”, and * Article 2 - “Critical assessment of economic impact analyses of the Aardklop National Arts Festival”. Article 2 investigated and compared the economic assessment results when applying specific constructed models, being the Social Accounting Matrix (SAM) and Computable General Equilibrium (CGE) for the appropriate provinces, to the available data obtained from previous surveys conducted at the 2010 ABSA Klein Karoo National Arts Festival and from the Aardklop National Arts Festival. The two articles indicated that when different models of assessment are applied to the same data set of an event, the economic impact results might differ significantly. This may serve as a warning to economic assessors, academics and researchers that economic impact results can be misleading and therefore the application thereof should be handled with the utmost care in order to avoid misinterpretations and misconceptions. * Article 3, “Assessing the economic impact of the Aardklop National Arts Festival: a feast of models to opt for – or not?” In this article, data from a visitor and business survey conducted at the 2010 Aardklop National Arts Festival was used in the analyses made by applying SAM, CGE and I-O regional models constructed for South Africa’s Northwest Province. Results from these analyses were then compared in order to give researchers and practitioners a better insight and clarity regarding which approach works best for the economic assessment of an arts festival. This article highlighted the fact that the measured economic impact results differ when various models that are applied to the same event. It also became evident that the most conservative economic impact was measured by an I-O model, followed with a higher SAM measurement, while CGE revealed the highest economic assessment. The most significant contribution of this study is embedded in the fact that within the South African context – and even globally – it is the first study of its kind that aimed to determine the economic impact by means of applying more than one assessment model to the data set of a single event. Further, this study provides guidelines for event organisers, academics and economic advisors to follow in conjunction with the existing body of knowledge and practical implementation structures when assessing the economic impact of events. / Thesis (PhD (Tourism Management))--North-West University, Potchefstroom Campus, 2012

Festivals have become a global phenomenon and now serve as a platform to promote the leisure and tourism industry within a nation. These events have an undisputed economic effect – not only on the hosting community – but also on the global community. Despite the encouraging community support and the socio-economic impact and spin-offs that are generated by means of such events, the financing of art festivals remains an intricate issue. The fact remains that not all festivals are financially self-sustainable and so require extensive sponsorship in order to ensure the continuation of the event. Limited government funding available due to budget constraints curbs the financial support forthcoming from municipalities and so forces event organisers to seek alternative funding to ensure the survival and feasibility of events. This responsibility places an additional burden on event organisers and so necessitates the use of assessment tools in order to convince private and public institutions or individuals to invest in such events through sponsorships. During an extensive literature study, it became apparent that the need exists to re-assess fully the economic impact analysis of events. The literature revealed that varying models are used to conduct economic impact analyses. In order to establish a concise framework within which to conduct an economic assessment, it was decided to select only the most-used models – Computable General Equilibrium (CGE), Input-Output (I-O) and Social Accounting Matrix (SAM). The dilemma facing tourism economists is to determine which economic assessment approach is most effective as every methodology has its own advantages and disadvantages. In addition, the type and size of an event also plays a fundamental role when selecting an appropriate measuring tool. This research was further motivated because of the existing gap that exists in the South African context for no study has yet been conducted where the various models that assess economic impact have been applied to the collated data of the same event. This study thus aims to provide an overview and a comparison of competing and supplementing methodologies for modelling the regional economic dynamics and the impacts of events. It further investigates the manner in which regional CGE, I-O and SAM based (multiplier) models operate towards capturing the region-specific, inter-regional and multi-regional production, consumption and factor market patterns as result of expenditures incurred during events. An analysis of the virtues and the limitations of these economic assessment methodologies suggests that it may be the considerations such as the data collection/compilation, expected output, research objectives and costs involved that ultimately determine the choice of a specific modelling framework. While addressing the problem stated above, this study produced the following three articles that are now embodied in the work: * Article 1 - “Critical assessment of economic impact analyses of the ABSA Klein Karoo National Arts Festival”, and * Article 2 - “Critical assessment of economic impact analyses of the Aardklop National Arts Festival”. Article 2 investigated and compared the economic assessment results when applying specific constructed models, being the Social Accounting Matrix (SAM) and Computable General Equilibrium (CGE) for the appropriate provinces, to the available data obtained from previous surveys conducted at the 2010 ABSA Klein Karoo National Arts Festival and from the Aardklop National Arts Festival. The two articles indicated that when different models of assessment are applied to the same data set of an event, the economic impact results might differ significantly. This may serve as a warning to economic assessors, academics and researchers that economic impact results can be misleading and therefore the application thereof should be handled with the utmost care in order to avoid misinterpretations and misconceptions. * Article 3, “Assessing the economic impact of the Aardklop National Arts Festival: a feast of models to opt for – or not?” In this article, data from a visitor and business survey conducted at the 2010 Aardklop National Arts Festival was used in the analyses made by applying SAM, CGE and I-O regional models constructed for South Africa’s Northwest Province. Results from these analyses were then compared in order to give researchers and practitioners a better insight and clarity regarding which approach works best for the economic assessment of an arts festival. This article highlighted the fact that the measured economic impact results differ when various models that are applied to the same event. It also became evident that the most conservative economic impact was measured by an I-O model, followed with a higher SAM measurement, while CGE revealed the highest economic assessment. The most significant contribution of this study is embedded in the fact that within the South African context – and even globally – it is the first study of its kind that aimed to determine the economic impact by means of applying more than one assessment model to the data set of a single event. Further, this study provides guidelines for event organisers, academics and economic advisors to follow in conjunction with the existing body of knowledge and practical implementation structures when assessing the economic impact of events. / Thesis (PhD (Tourism Management))--North-West University, Potchefstroom Campus, 2012

This dissertation contains three essays on environmental economics and on credit market imperfections. The literature on carbon tax incidence generally finds that carbon taxes have a regressive impact on the distribution of income. The main reason for that finding stems from the fact that poor households spend a larger share of their total expenditure on energy products than the rich households do. This literature, however, has ignored the impact of carbon taxes on income stemming from changes in relative factor prices. Yet, changes in household welfare depend not only on variations in commodity prices, but also on changes in income. Chapter 1 provides a comprehensive analysis of the distributional impact of carbon taxes on inequality by considering both demand-side and supply-side channels. We use a multi-sector, multi-household general equilibrium model to analyze the distributional impact of carbon taxes on inequality. Using equivalent income as the household welfare metric, we apply the Shapley value and concentration index approaches to decomposing household inequality. Our simulation results suggest that carbon taxes exert a larger negative impact on the income of the rich than that of the poor, and are thereby progressive. On the other hand, when assessed from the use side alone (i.e., commodity prices alone), our results confirm previous findings, whereas carbon taxes are regressive. However, due to the stronger incidence of carbon taxes on inequality from the income side, our results suggest that the carbon tax tends to reduce inequality. These findings further suggest that the traditional approach of assessing the impact of carbon taxes on inequality through changes in commodity prices alone may be misleading. Chapter 2 investigates the economic impacts of creating an emissions bubble between Canada and the US in a context of subglobal participation in efforts to reduce pollution with market based-instruments. One of the advantages of an emissions bubble is that it can be beneficial to countries that differ in their production and consumption patterns. To address the competitiveness issue that arises from the free-rider problem in the area of climate-change mitigation, we consider the imposition of a border tax adjustment (BTA) - a commonly suggested solution in the literature. We develop a detailed multisector and multi-regional general equilibrium model to analyze the welfare, aggregate, sectoral and trade impacts of the formation of an emissions bubble between Canada and the US with and without BTA. Our simulation results suggest that, in the absence of BTA, the creation of the bubble would make both countries better off through a positive terms-of-trade effect, and more importantly, through a significant reduction in Canada’s marginal abatement cost. The benefits of these positive effects would spill over to the non-participating countries, leading them to increase their trade shares in non-emissions-intensive goods. Moreover, the simulation results also indicate that a unilateral implementation of a BTA by any one of the two countries is welfare deteriorating in the imposing country and welfare improving in the other. In contrast, a joint implementation of a BTA by the two countries would make Canada better off and the US worse off. Chapter 3 shows that learning by lending is a potential channel of understanding the business cycle fluctuation under an imperfect credit market. An endogenous link among the learning parameter, lending rates, and the size of investment makes it possible to generate an internal propagation even due to a temporary shock. The main finding of this chapter is the explanation of how ex post non-financial factors such as information losses by individual agents in a credit market may account for a persistence in real indicators such as capital stock and output.