Neutral carbon tax and environmental targets in Brazil

We evaluate the effects of a carbon tax in the Brazilian economy using an input-output framework. First, we consider the impacts of a carbon tax of US$ 10 and US$ 50/metric ton of CO 2 equivalent. As usual, the adoption of the carbon tax generates adverse effects on GDP, wages and jobs in the short...

Full description

Saved in:
Bibliographic Details
Published in:Economic systems research 2019-01, Vol.31 (1), p.70-91
Main Authors: Pereda, Paula Carvalho, Lucchesi, Andrea, Garcia, Carolina Policarpo, Palialol, Bruno Toni
Format: Article
Language:English
Subjects:
Carbon tax
input-output analysis
neutral tax burden
revenue-recycling effect
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We evaluate the effects of a carbon tax in the Brazilian economy using an input-output framework. First, we consider the impacts of a carbon tax of US$ 10 and US$ 50/metric ton of CO 2 equivalent. As usual, the adoption of the carbon tax generates adverse effects on GDP, wages and jobs in the short term, but reduces emissions and generates new government revenues, especially in the case of the greater tax. Second, we consider a broader tax system reform. In this reform, we replace distortionary taxes by a tax on value added. To compensate for the loss of government revenue, we assume a carbon tax with equivalent revenue. We find that the net effect is a GDP increase of 0.47%, the creation of 533 thousand jobs and reduction of 1.6 million tons of CO 2 emissions. Both scenarios exempt exports and levy imports to correct adverse effects on the country's competitiveness.
ISSN:0953-5314
1469-5758
DOI:10.1080/09535314.2018.1431611