Double Dividend of Low-carbon Growth in Mexico: A Dynamic General Equilibrium Assessment
Abstract
This paper simulates the medium- and long-term impact of proposed and expected energy policy on the environment and on the Mexican economy. The analysis has been conducted with a Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy (Three-ME). This model is well suited for policy assessment purposes in the context of developing economies as it indicates the transit
ional effects of policy intervention. Three-ME estimates the carbon tax required to meet emissions reduction targets within the Mexican “Climate Change Law”, and assesses alternative policy scenarios, ach reflecting a different strategy for the recycling of tax revenues. With no compensation, the taxation
policy if successful will succeed in reducing CO2 e
missions by more than 75% by 2050 with
respect to Business as Usual (BAU), but at high eco
nomic costs. Under full redistribution of
carbon tax revenues, a double dividend arises and t
he policy is beneficial both in terms of
GDP and CO2 emissions reduction
Domains
Economics and Finance
Origin : Files produced by the author(s)