IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v54y2022i26p2998-3015.html
   My bibliography  Save this article

Economy-wide and CO2 impacts of carbon taxes and output-based pricing in New Brunswick, Canada

Author

Listed:
  • Patrick Withey
  • Chinmay Sharma
  • Van Lantz
  • Galen McMonagle
  • Thomas O. Ochuodho

Abstract

Economic models suggest that greenhouse gas emission reductions are warranted on a global scale. However, more analysis is needed at a regional level to inform local governments about the economics of alternative carbon policies. To this end, we develop a dynamic computable general equilibrium model for the case-study province of New Brunswick, Canada, and consider economic impacts and costs of two carbon policy scenarios. The first, called the Federal ‘backstop’, consists of a carbon tax on small emitters and an output-based pricing system (OBPS) on large emitters. The second consists of a common carbon tax across all emitters. We also consider different carbon tax revenue recycling options under each scenario. Results show that when a carbon tax is applied to all emitters starting at $20/tonne in 2019 and increasing to $170/tonne in 2030, cumulative present value GDP would decline in the range of 0.60%–0.63% (depending on revenue recycling options), and emissions will decline by more than 32%. Under the Federal backstop scenario, GDP reduction is only 0.24–0.26%, and emissions reduction is only 13%. In all scenarios, the costs range between $21 and 50/tonne on average, and are generally lower than the global social cost of carbon estimated in other research.

Suggested Citation

  • Patrick Withey & Chinmay Sharma & Van Lantz & Galen McMonagle & Thomas O. Ochuodho, 2022. "Economy-wide and CO2 impacts of carbon taxes and output-based pricing in New Brunswick, Canada," Applied Economics, Taylor & Francis Journals, vol. 54(26), pages 2998-3015, June.
  • Handle: RePEc:taf:applec:v:54:y:2022:i:26:p:2998-3015
    DOI: 10.1080/00036846.2021.2001422
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2021.2001422
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00036846.2021.2001422?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.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jie Yan & Ruiliang Wang, 2024. "Green Fiscal and Tax Policies in China: An Environmental Dynamic Stochastic General Equilibrium Approach," Sustainability, MDPI, vol. 16(9), pages 1-24, April.
    2. Lantz, Van & McMonagle, Galen & Hennigar, Chris & Sharma, Chinmay & Withey, Patrick & Ochuodho, Thomas, 2022. "Forest succession, management and the economy under a changing climate: Coupling economic and forest management models to assess impacts and adaptation options," Forest Policy and Economics, Elsevier, vol. 142(C).

    More about this item

    Statistics

    Access and download statistics

    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:taf:applec:v:54:y:2022:i:26:p:2998-3015. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    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.