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Carbon Taxes: Their Macroeconomic Effects and Prospects for Global Adoption: A Survey of the Literature
Author:
Mr. Ved P. Gandhi null

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Mr. Javier Cuervo null

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Series:
IMF Working Papers
Volume/Issue:
Volume 1998: Issue 073
Language:
English
Publication Date:
01 May 1998
DOI:
https://doi.org/10.5089/9781451849431.001
ISBN:
9781451849431
ISSN:
1018-5941
Pages:
39
Keywords:
WP; polluting firm; reducing Co; economic growth; abatement cost; cost increase; energy firm; carbon tax; climate change; double dividend; greenhouse gas emissions; global warming; income distribution; international competitiveness; Kyoto protocol; carbon tax revenue; tax-cum-wage subsidy; air pollution; distortionary tax; adoption of carbon taxes; carbon tax tax revenue; greenhouse gas; market clearing price; heating cost; effect of a carbon tax; Global; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The carbon tax is a major instrument for curbing greenhouse gas emissions that cause global warming. Yet its adoption has been limited because of concerns over its effects on economic growth, income distribution, and international competitiveness. The paper shows that policymakers can minimize the effects of the tax on economic growth through an efficient recycling of tax revenues and on equity through the adoption of appropriate mitigating or compensating measures. To eliminate the worry about the loss of competitiveness, the paper suggests an international agreement on a coordinated adoption of the tax.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund