The Economic Consequences of Effective Carbon Taxes

Felix Kapfhammer ()
Authors registered in the RePEc Author Service: Ana María Herrera and Yoosoon Chang ()

No No 01/2023, Working Papers from Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School

Abstract: This paper studies the economic consequences of carbon taxes at the macroeconomic and sectoral level. I propose a novel monthly measure of effective carbon tax rates, which, in contrast to the measures used by the existing literature, accounts for the time-varying emission coverage of taxes that are both explicitly and implicitly levied on greenhouse gas-emitting goods. Employing the new measure for four Nordic countries, I find that effective carbon taxes reduce emissions as expected but also decrease macroeconomic and sectoral activity - though there is some heterogeneity in the effects within and across the Nordic countries.

Pages: 69 pages
Date: 2023-01
New Economics Papers: this item is included in nep-ene, nep-mon and nep-rmg
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Citations: View citations in EconPapers (2)

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https://hdl.handle.net/11250/3053679

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Persistent link: https://EconPapers.repec.org/RePEc:bny:wpaper:0113

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