We consider the efficiency implications of policies to reduce global carbon emissions in a world with pre-existing tax distortions. We first show that the weak double dividend, the proposition that the welfare improvement from a tax reform where environme ntal taxes are used to lower distorting taxes must be greater than the welfare improvement from a reform where the environmental taxes are returned in a lump sum fashion, need not hold in a world with multiple distortions. A small analytic general equilib rium model is constructed to demonstrate this result. We then present a large-scale computable general equilibrium model of the world economy with distortionary taxation. We use this model to evaluate a number of policies to reduce carbon emissions. We find that the weak double dividend is not obtained in a number of European countries. Results also demonstrate the point that the interplay between carbon policies and pre-existing taxes can differ markedly across countries. Thus one must be cautious in extrapolating the results from a country specific analysis to other countries. / Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change Website. (http://mit.edu/globalchange/www/) / Includes bibliographical references (p. 17-18).
Identifer | oai:union.ndltd.org:MIT/oai:dspace.mit.edu:1721.1/3559 |
Date | 05 1900 |
Contributors | Babiker, Mustafa H.M., Metcalf, Gilbert E., Reilly, John M. |
Publisher | MIT Joint Program on the Science and Policy of Global Change |
Source Sets | M.I.T. Theses and Dissertation |
Language | English |
Detected Language | English |
Format | 22 p., 1080442 bytes, application/pdf |
Rights | http://mit.edu/globalchange/www/abstracts.html#a85 |
Relation | Report no. 85 |
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