Role of carbon tax in a sustainable economic growth

Claudio Socci (), Irfan Ahmed (), Silvia D’Andrea (), Stefano Deriu () and Naif Mansour Mathkur ()
Additional contact information
Claudio Socci: University of Macerata
Irfan Ahmed: Jazan University
Silvia D’Andrea: Italian Ministry of Economy and Finance
Stefano Deriu: University of Macerata
Naif Mansour Mathkur: Jazan University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 8, No 75, 20987-21017

Abstract: Abstract The worldwide increasing concern for climate change persuades policy makers to take into account also the environmental aspects when designing and assessing the effectiveness of economic policies. Fiscal reforms can be combined with environmental measures to achieve the complex target represented by economic growth and environmental protection. In this vein, this study proposes the reorganisation of federal taxation on corporate and personal income in USA, financed by the introduction of a carbon tax on economic activities. The study uses a dynamic CGE model calibrated on a US Social Accounting Matrix (SAM) with environmental accounts. The economic, socioeconomic and environmental impact assessed in this study gives two major policy recommendations: firstly, the reduction in personal income tax that is more geared to economic growth compared to the reduction in corporate income tax, and secondly, not to be detrimental for growth, the carbon tax introduction must be part of a policy framework. Indeed, if the personal income tax reduction is financed with the introduction of a carbon tax on economic activities, there is no harm to the economic growth and a benefit for the environment arises.

Keywords: Carbon tax; Dynamic CGE; Income tax; GHG SAM; Sustainable growth (search for similar items in EconPapers)
JEL-codes: C68 E01 E16 H23 Q51 Q58 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10668-023-03516-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:endesu:v:26:y:2024:i:8:d:10.1007_s10668-023-03516-2

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10668

DOI: 10.1007/s10668-023-03516-2

Access Statistics for this article

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development is currently edited by Luc Hens

More articles in Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().