Home

Selective Carbon Taxation in Production Networks: Evidence from Mexico

Abstract Views
457
Author
Mattis Bös Kasper Vrolijk
Category
Quantitative
Date Posted
2021/11/03
Date Retrieved
2022/05/18
Date Revised
2022/05/02
Date Written
2021/11/03
Description
Many governments consider carbon taxation as an efficient tool to reduce carbon emissions. How can carbon taxation be best introduced? This paper examines the effect of selective carbon taxation on aggregate emissions in the context of input-output linkages. Our contribution is to model carbon taxes as a charge on the emissions of individual energy sources rather than on output or the final consumption good. We show theoretically the difference between taxing sectors and energy sources for the effect of carbon taxation on aggregate emissions. We then introduce the measure of emission centrality and show that it is a helpful statistic to evaluate how price effects influence emissions within the production network following the introduction of a carbon tax. Our empirical contribution is to exploit the introduction of carbon taxation in Mexico in 2014 and use input-output data to show that the political economy effects that made government eliminate taxation on some energy sources resulte
Downloads
82
Exports
0
JEL Classifications
H23 O11 C67 O47
Keywords
Carbon Pricing Macroeconomic Development Input-Output Linkages
News Mentions
1
Pages
25
Random
811
Readers
1
Shares and Likes
0
Tweets
0
URL
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4098815
TOP