Using input–output models to estimate sectoral effects of carbon tax policy: Applications of the <scp>NGFS</scp> scenarios

The Network of Central Banks and Supervisors for Greening the Financial System (NGFS) has engaged in scenario analysis that estimates a $200/ton carbon tax would be required to transition net zero by 2050. Using as base, this paper uses input–output (IO) modeling generate price revenue effects tax. Results from these models, which can only interpreted short-run, upper-bound policy, imply response on CO2e emissions, carbon-intensive industries, such agriculture, extraction, transportation, utilities, chemicals, may experience increases range 10-30 percent. Other industries will also increases, but lesser degree, due increased input costs associated with In addition, results suggest facing elastic pricing regimes face similar-sized declines revenues consequence Rank-ordered impact models utilized bank supervisors firms adequately plan sectoral-level risk within their lending and/or investment portfolios.