1 Overview This document studies the sensitivity of the optimal carbon tax formulation derived by Golosov, Hassler, Krusell, and Tsyvinski (2013) ("GHKT"). GHKT show that, under certain assumptions, the optimal carbon tax-GDP ratio can be solved for in closed form, and does not depend on the paths of future output, consumption, and technological change. These assumptions include logarithmic pre...

Simulation experiments are conducted, comparing the effects of a common reduction of CO2 emissions within the European Union to a Swedish unilateral decision to reduce CO2 emissions. A numerical general equilibrium model, GEME3, has been used as analytical tool. The model covers all European Union countries, with production disaggregated into 18 sectors. The 13 consumption goods included are cl...

THIS DOCUMENT STUDIES the sensitivity of the optimal carbon tax formulation derived by Golosov, Hassler, Krusell, and Tsyvinski (2014) (“GHKT”). GHKT showed that, under certain assumptions, the optimal carbon tax–GDP ratio can be solved for in closed form, and does not depend on the paths of future output, consumption, and technological change. These assumptions include logarithmic preferences ...

THIS DOCUMENT STUDIES the sensitivity of the optimal carbon tax formulation derived by Golosov, Hassler, Krusell, and Tsyvinski (2014) (“GHKT”). GHKT showed that, under certain assumptions, the optimal carbon tax–GDP ratio can be solved for in closed form, and does not depend on the paths of future output, consumption, and technological change. These assumptions include logarithmic preferences ...

Do carbon taxes kill jobs? With pricing at $30/tonne of carbon dioxide equivalent emissions, the BC policy is currently the most aggressive revenue-neutral carbon tax and serves as a role model for many jurisdictions world-wide. There are concerns, however, that this policy negatively impacts employment. This study uses firm-level synthetic control methods (SCM) to estimate employment effects o...

Cement manufacturing is an emission-intensive process. The cement industry responsible for 8% of the global CO2 emissions, and produces a ton uses up to 102 kWh electrical energy, leading significant amount indirect emissions depending on emission intensity electricity source. Captive power generation can be potentially utilised as mitigation approach reduce well expenditure tariffs. In this st...

The present paper applies a theoretical two-sector three-factor model to analyze a variety of energy tax reforms with the common feature of at least partly exempting the energy-intensive export sector from the tax. As a result, all scenarios with exemptions reduce energy less than the non-discriminating textbook version of the energy tax. Moreover, in the two scenarios that exemplify typical at...

With the Opposition party and various interest groups objecting to the Australian Government’s proposal of a carbon tax, public opinion about pricing carbon is divided. Some of the disagreement may be due to misunderstandings about the effects of the policy. In an effort to clarify some of the issues, this paper reports the simulated effects of a carbon tax of $23 per tonne of carbon dioxide on...