Toward a low carbon growth in Mexico: is a double dividend possible ? A dynamic general equilibrium assessment

Gissela Landa Rivera, Frederic Raynes, Ivan Islas, François-Xavier Bellocq and Fabio Grazi
Additional contact information
Frederic Raynes: OFCE-SciencesPo & TNO
Ivan Islas: INECC
François-Xavier Bellocq: AFD
Fabio Grazi: AFD

No 2015-24, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

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 transitional 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, each reflecting a different strategy for the recycling of tax revenues. With no compensation, the taxation policy if successful will succeed in in reducing CO2 emissions by more than 75% by 2050 with respect to Business as Usual (BAU), but at high economic costs. Under full redistribution of carbon tax revenues, a double

Date: 2015-10
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:1524

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