 Heterogeneous effects of carbon tax, subsidy and foreign carbon emissions on low- and high-carbon firmsKyounghun Kim, Eunsun Yang and Yoonseok Choi Economic Analysis and Policy, 2024, vol. 83, issue C, 260-279 Abstract: Climate change engendered by carbon emissions has become a major threat to human life and the world economy. Many of early studies corroborate that carbon tax and subsidy are effective policy tools to alleviate climate change. Most of them, however, use closed-economy models with a single firm to analyze the effects of these two policies. This paper explores the effects of carbon tax, subsidy and foreign carbon emissions on economic activities in an open macroeconomic model that features low- and high-carbon firms. The main findings suggest that carbon tax, subsidy and foreign carbon emissions all deliver heterogeneous outcomes by largely affecting high-carbon firms. The shortage of national income due to weak economic activities leads the economy to issue more international bonds. The takeaway from all the analyses is that government should introduce various carbon taxes that are geared towards target firms with different carbon emissions and adopt optimal means to manage national debt. Keywords: Carbon tax; Subsidy; Foreign carbon emissions; High-carbon firms; Low-carbon firms; Small open economy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:83:y:2024:i:c:p:260-279 DOI: 10.1016/j.eap.2024.06.011 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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