The Distributional Effect of A Carbon Tax on Income in Taiwan

Chun-Chiang Feng, Kuei-Feng Chang, Jin-Xu Lin and Shih-Mo Lin
Additional contact information
Chun-Chiang Feng: Institute of Nuclear Energy Research, Atomic Energy Council, Taoyuan City 32546, Taiwan
Kuei-Feng Chang: PhD Program in Business, Chung Yuan Christian University, Taoyuan City 32023, Taiwan
Jin-Xu Lin: Department of International Business, Chung Yuan Christian University, Taoyuan City 32023, Taiwan
Shih-Mo Lin: Department of International Business, Chung Yuan Christian University, Taoyuan City 32023, Taiwan

Sustainability, 2020, vol. 12, issue 4, 1-17

Abstract: Environmental issues have become more important worldwide. A carbon tax is a strong tool for cutting carbon emissions directly through the internalization of the external costs of pollution. To mitigate the impact of carbon taxation, it is necessary to recycle the tax revenue into other taxes, subsidies, and transfers. In Taiwan, carbon tax policy has been under consideration. To analyze the effect of carbon tax and tax revenue recycling, this paper adopts a recursive dynamic computable general equilibrium (CGE) model—General Equilibrium Model for Energy, Environment, and Technology (GEMEET)—under a comprehensive economic systems framework. The results show that a suitable recycling mechanism is a key factor for the success of green tax reform for a significant improvement in the economy, environment, and in income distribution, simultaneously.

Keywords: carbon tax; tax revenue recycling; computable general equilibrium; double dividend; income distribution (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/4/1530/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/4/1530/ (text/html)

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:gam:jsusta:v:12:y:2020:i:4:p:1530-:d:322232

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().