Testing the Double Dividend Hypothesis for a Carbon Tax in a Small Open Economy

Proost, Stef; Regemorter, Denise Van

doi:10.1007/978-3-0348-9012-0_6

Cited by 1 publication

(1 citation statement)

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“…The higher CO 2 tax allows on average a greater reduction of the social security contributions which in turn induces a higher increase in the EU average real wage rate as is evident from Table 2. The terms of trade effects are also presented in this table as previous research indicates that this is an important element in the explanation of the double dividend that can be realised by CO 2 taxes in the EU (see, for example, de Mooij (1999) and Proost and Van Regemorter (1998)). However, in our exercise it does not play a major role in explaining the difference in impacts between the two models, as the terms of trade effect hardly changes between the two versions of the GEM-E3 model.…”

Section: The Scenario Resultsmentioning

confidence: 99%

Modelling the Health Related Benefits of Environmental Policies and Their Feedback Effects: A CGE Analysis for the EU Countries with GEM-E3

Mayeres¹,

Regemorter

2008

The Energy Journal

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A number of recent studies on taxation in the presence of externalities in a second-best framework consider the implications of taking into account the feedback effects of environmental quality. This paper explores by means of GEM-E3, a computable general equilibrium model for the EU countries, the importance of the feedback effects of the health related benefits from an environmental policy. The modelling framework implemented in GEM-E3 allows for three channels through which the feedback can occur: a decrease in medical expenditure, an increase in the consumers' available time and an increase of labour productivity in the production sectors. The results show that the explicit modelling of the health related effect of air pollution on consumers and producers allows for a better evaluation of the impact of environmental policies on private consumption and employment. However, in terms of global effect, the impacts of the feedback are small, compared to the standard GEM-E3 model where the health related benefits are evaluated ex-post.

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Section: The Scenario Resultsmentioning

confidence: 99%