Economic Assessment of Carbon Tax policy: Applied Computable General Equilibrium Model

Unbalanced use of fossil fuels has made the environmental crisis as major challenge for governments. In the same methods, international and domestic institutions have designed and implemented various policies and plans to reduce greenhouse gas emissions, which are the cause of environmental pollution. One of the successful policies to reduce emissions is carbon tax policy. Considering the environmental pollution situation in Iran as well as the successful experience of carbon tax policy in other countries, this study simulates carbon tax policy in the Iran economy, Accordingly, evaluate and calculate the probable effects of carbon tax on the Iran economy in the form of designing a computable general equilibrium (CGE) model using the latest Iran social accounting matrix (SAM) in 2011 and in different scenarios. The results show that the carbon tax rate in all scenarios, in terms of improving emissions, decreases the gross domestic product (GDP); So that in the last scenario, which is accompanied by the highest carbon tax, in exchange for a reduction of 0.54 percent in GDP, carbon dioxide emissions are reduced by 10.7 percent.