This thesis investigates the link between optimal carbon tax and endogenous longevity. It considers an overlapping generation model with clean and dirty intermediate goods. Externality caused by producing dirty intermediate goods damages the final goods productionas well as the agents’ longevity. From the social planner’s problem, the cost of carbon emission is formulated. Then, the Pigouvian carbon tax rate is used to internalize such costs. With the two channels of impact of carbon emission combined, the theoretical results suggest that (i) the current carbon tax may abstract from local health costs of carbon emission, especially in rich economies, (ii) in poor economies, the government may be lowering the carbon tax at the expense of their elderly’s welfare, and (iii) the government in economies transitioning from poverty to richness should raise their carbon tax level above that of poor economies. Deeper investigation into the mechanism and a quantitative analysis would beneeded. Future studies can also include endogenous technological change or extend to amulti-economy model.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-504690 |
| Date | January 2023 |
| Creators | Banh, Chi |
| Publisher | Uppsala universitet, Nationalekonomiska institutionen |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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