Environmental policy and ‘double dividend’ in a transitional economy

Presley K. Wesseh and Boqiang Lin ()

Energy Policy, 2019, vol. 134, issue C

Abstract: Although the environmental benefit from implementing a climate tax is usually realized, the economic dividend still remains a controversial issue warranting further research. This is because the impact of an environmental policy on an economy-wide system will depend on factors that differ from one region to the next. In this paper, we develop a static CGE model for Liberia that is capable of analyzing both a uniform and a partial carbon tax policy. Under the uniform policy instituted to ensure mitigation in the range of 20–50%, an economic dividend is found for energy, employment, and welfare. In particular, energy consumption increases by between 5 and 15.5%, respectively. Interestingly, under a second best policy which exempts economically strategic sectors from the tax, no economic dividend is found for all three variables. This time, energy use declines by between 2 and 9%. These suggest that a uniform environmental tax policy is a more viable option for Liberia, in particular, as it does not only generate economic dividend for employment and welfare, it also incentivizes Liberia's adoption and use of renewable energy technologies. In general, based on the results obtained, further conditions for the feasibility of a double dividend are proposed.

Keywords: Environmental tax; Double dividend; Energy consumption; Renewable energy; Transitional economy (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421519305348
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:134:y:2019:i:c:s0301421519305348

DOI: 10.1016/j.enpol.2019.110947

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().