IDEAS home Printed from https://ideas.repec.org/a/spr/envpol/v5y2003i3d10.1007_bf03353921.html
   My bibliography  Save this article

General equilibrium analysis of economic and environmental effects of carbon tax in a developing country: case of Thailand

Author

Listed:
  • Govinda R. Timilsina

    (Asian Institute of Technology)

  • Ram M. Shrestha

    (Asian Institute of Technology)

Abstract

The study analyzed the economic and environmental consequences of a carbon tax in Thailand using a static general equilibrium model. Various carbon tax rates ranging from US$10/tC to US$40/tC were considered with two alternative revenue recycling schemes: (1) recycling of tax revenue to households through a lump-sum transfer, and (2) using the revenue to finance cuts in the existing income tax. A key finding of the study was that the economic impact of the carbon tax (e.g., reductions in welfare, gross domestic product, gross output) are affected by revenue recycling schemes, but the environmental impact (i.e., reduction in CO2, SO2, and NOx emissions) are almost unaffected. Moreover, at each tax level the cost of the carbon tax (i.e., welfare loss) was less when the tax revenue was used to finance cuts in existing income tax rates than when the revenue is recycled to households through a lump-sum transfer. In addition, the study found that a carbon tax would reduce SO2 emissions in higher proportions than the CO2 emissions in Thailand.

Suggested Citation

  • Govinda R. Timilsina & Ram M. Shrestha, 2003. "General equilibrium analysis of economic and environmental effects of carbon tax in a developing country: case of Thailand," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(3), pages 179-211, April.
  • Handle: RePEc:spr:envpol:v:5:y:2003:i:3:d:10.1007_bf03353921
    DOI: 10.1007/BF03353921
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/BF03353921
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/BF03353921?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Adam Rose & Shih-Mo Lin, 1995. "Regrets or No Regrets-That is the Question: Is Conservation a Costless C02 Mitigation Strategy?," The Energy Journal, , vol. 16(3), pages 67-87, July.
    2. Jorgenson, Dale W. & Wilcoxen, Peter J., 1993. "Reducing US carbon emissions: an econometric general equilibrium assessment," Resource and Energy Economics, Elsevier, vol. 15(1), pages 7-25, March.
    3. Lawrence H. Goulder & Ian W.H. Parry & Roberton C. Williams III & Dallas Burtraw, 2002. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 27, pages 523-554, Edward Elgar Publishing.
    4. Randall Lutter, 2000. "Developing Countries' Greenhouse Emissions: Uncertainty and Implications for Participation in the Kyoto Protocol," The Energy Journal, , vol. 21(4), pages 93-120, October.
    5. Adam Rose & Shih-Mo Lin, 1995. "Regrets or No Regrets -- That is the Question: Is Conservation an Costless CO2 Mitigation Strategy?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 67-88.
    6. Aasness, Jorgen & Bye, Torstein & Mysen, Hans Terje, 1996. "Welfare effects of emission taxes in Norway," Energy Economics, Elsevier, vol. 18(4), pages 335-346, October.
    7. Ian W.H. Parry & Roberton C. Williams III & Lawrence H. Goulder, 2002. "When Can Carbon Abatement Policies Increase Welfare? The Fundamental Role of Distorted Factor Markets," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 25, pages 471-503, Edward Elgar Publishing.
    8. Gottinger, Hans W., 1998. "Greenhouse Gas Economics and Computable General Equilibrium," Journal of Policy Modeling, Elsevier, vol. 20(5), pages 537-580, October.
    9. Bohringer, Christoph & Rutherford, Thomas F., 1997. "Carbon Taxes with Exemptions in an Open Economy: A General Equilibrium Analysis of the German Tax Initiative," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 189-203, February.
    10. Naqvi, Farzana, 1998. "A computable general equilibrium model of energy, economy and equity interactions in Pakistan," Energy Economics, Elsevier, vol. 20(4), pages 347-373, September.
    11. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, January.
    12. Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009. "A General Equilibrium Model for Tax Policy Evaluation," National Bureau of Economic Research Books, University of Chicago Press, number 9780226036335, June.
    13. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "Introduction to "A General Equilibrium Model for Tax Policy Evaluation"," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 1-5, National Bureau of Economic Research, Inc.
    14. ., 1999. "The Environment and Asian Economic Development," Chapters, in: Biodiversity, Conservation and Sustainable Development, chapter 9, pages 121-142, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Govinda R. Timilsina & Ram M. Shrestha, 2002. "General equilibrium analysis of economic and environmental effects of carbon tax in a developing country: case of Thailand," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(3), pages 179-211, September.
    2. Govinda Timilsina & Ram Shrestha, 2002. "General equilibrium analysis of economic and environmental effects of carbon tax in a developing country: case of Thailand," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(3), pages 179-211, September.
    3. Finnoff, David & Tschirhart, John, 2008. "Linking dynamic economic and ecological general equilibrium models," Resource and Energy Economics, Elsevier, vol. 30(2), pages 91-114, May.
    4. Pizer, William A. & Kopp, Raymond, 2005. "Calculating the Costs of Environmental Regulation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 25, pages 1307-1351, Elsevier.
    5. Iain Fraser & Robert Waschik, 2010. "The Double Dividend Hypothesis in a CGE Model: Specific Factors and Variable Labour Supply," Working Papers 2010.02, School of Economics, La Trobe University.
    6. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    7. Lawrence H. Goulder & Ian W.H. Parry & Roberton C. Williams III & Dallas Burtraw, 2002. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 27, pages 523-554, Edward Elgar Publishing.
    8. Xavier Labandeira & Miguel Rodriguez, 2004. "The Effects of a Sudden CO2 reduction in Spain," Others 0412001, University Library of Munich, Germany.
    9. Fullerton, Don & Ta, Chi L., 2019. "Environmental policy on the back of an envelope: A Cobb-Douglas model is not just a teaching tool," Energy Economics, Elsevier, vol. 84(S1).
    10. Zhai, Fan, 2008. "Armington Meets Melitz: Introducing Firm Heterogeneity in a Global CGE Model of Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 575-604.
    11. Peichl, Andreas, 2008. "The benefits of linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 08-6, University of Cologne, FiFo Institute for Public Economics.
    12. González-Eguino, Mikel, 2011. "The importance of the design of market-based instruments for CO2 mitigation: An AGE analysis for Spain," Ecological Economics, Elsevier, vol. 70(12), pages 2292-2302.
    13. José M. Labeaga & Miguel Rodríguez & Xavier Labandeira, 2006. "A Macro and Microeconomic Integrated Approach to Assessing the Effects of Public Policies," Working Papers 2006-02, FEDEA.
    14. Wolfgang Eggert & Andreas Haufler, 1998. "When Do Small Countries Win Tax Wars?," Public Finance Review, , vol. 26(4), pages 327-361, July.
    15. Keshab Bhattarai, 2017. "Welfare and Distributional Impacts of Financial Liberalization in an Open Economy: Lessons from a Multi-Sectoral Dynamic CGE Model for Nepal," International Business Research, Canadian Center of Science and Education, vol. 10(1), pages 181-198, January.
    16. Timilsina, Govinda R., 2007. "The role of revenue recycling schemes in environmental tax selection : a general equilibrium analysis," Policy Research Working Paper Series 4388, The World Bank.
    17. Lawrence H. Goulder & William A. Pizer, 2006. "The Economics of Climate Change," NBER Working Papers 11923, National Bureau of Economic Research, Inc.
    18. Bor, Yunchang Jeffrey & Huang, Yophy, 2010. "Energy taxation and the double dividend effect in Taiwan's energy conservation policy--an empirical study using a computable general equilibrium model," Energy Policy, Elsevier, vol. 38(5), pages 2086-2100, May.
    19. H. Allen Klaiber & V. Kerry Smith, 2013. "Developing general equilibrium benefit analyses for social programs: an introduction and example," Chapters, in: Scott O. Farrow & Richard Zerbe, Jr. (ed.), Principles and Standards for Benefit–Cost Analysis, chapter 6, pages 194-246, Edward Elgar Publishing.
    20. Chang K. Seung & Michael G. Dalton & André E. Punt & Dusanka Poljak & Robert Foy, 2015. "Economic Impacts Of Changes In An Alaska Crab Fishery From Ocean Acidification," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-35, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:envpol:v:5:y:2003:i:3:d:10.1007_bf03353921. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.