The PAGE09 model is a revised version of the earlier PAGE2002 and PAGE95 integrated assessment models (IAMs) that have been extensively used to evaluate climate change impacts and the social costs and benefits of different abatement and adaptation policies under uncertainty. This paper investigates the use of the latest PAGE09 model as a policy-oriented tool in determining an efficient climate change policy that internalises the mean social cost of carbon dioxide (SCCO 2 ). We show that the choice of final analysis year, time horizon and the carbon dioxide (CO 2 ) emissions pathway in the PAGE09 model do significantly affect the model results for the SCCO 2 and its trajectory over time and so the prescriptions of future climate policy. Further analysis shows that a constant time horizon and a slight modification of the penultimate analysis year which is currently fixed in the default model help avoid the underestimation of the SCCO 2 in future years. This paper also highlights the potential benefit of a consensus position on the specification of time horizon for the development of future IAMs to aid policy making.
On 1 July 2014, the Australian Government announced the abolition of its new carbon tax policy barely two years into implementation. The Australia’s policy U-turn raises a very important question: Should an emerging economy such as Malaysia adopt carbon and climate change policy as part of a larger tax reform? In order to answer this, the key issues, main driving forces and barriers in the use of carbon tax as an incentive-based instrument for economic and environmental policies purposes are examined. With the recent global climate challenges and the fiscal needs of the national budget, it is submitted that the implementation of a carbon tax framework in Malaysia should be regarded not as an ultimate goal in itself but as a starting point to develop the right behavioural response for a better and more comprehensive national fiscal and climate policy reform in the future.
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