Carbon pricing and energy efficiency improvement -- why to miss the interaction for developing economies? An illustrative CGE based application to the Pakistan case

Arshad Mahmood and Charles O.P. Marpaung

Energy Policy, 2014, vol. 67, issue C, 87-103

Abstract: Carbon/energy taxes and energy efficiency improvement are studied well in the recent years for their potential adverse impacts on economy, especially for lost production and international competitiveness, and rebound effects. However, little attention has been paid to investigate them jointly, which can not only prevent fall of energy services cost and thereby rebound effect but reduce the associated macroeconomic costs. This study thus employs a 20 sector CGE model to explore separately the impacts of carbon tax and its coordinated implementation with energy efficiency improvement on the Pakistan economy. The country underwent enormous pressure of energy security issues as well as climate change fallouts in the last couple of years and can be regarded as a suitable candidate for energy/environmental conservation policies to be considered at a broader context with more concrete efforts. The simulation results show that the impact of carbon tax on GDP is negative but resulting reductions in pollutant emissions are relatively high. Moreover, the GDP is expected to grow comparatively positive when analyzed with improvements in energy efficiency, with even higher decline in energy consumption demand and so emissions. This simultaneous economic and environmental improvement would thus have positive implications regarding sustainable development of the country.

Keywords: Carbon tax; Energy efficiency improvement; CGE modeling (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421513010288
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:67:y:2014:i:c:p:87-103

DOI: 10.1016/j.enpol.2013.09.072

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 ().