Economic-environmental assessment of emission tax policy in developing countries: evidence from Iran
China Agricultural Economic Review
ISSN: 1756-137X
Article publication date: 9 May 2024
Issue publication date: 21 May 2024
Abstract
Purpose
The present study aims at quantifying the likely impacts of an environmental tax on macroeconomic variables and pollution in Iran.
Design/methodology/approach
The computable general equilibrium model, which allows the prediction of the economy-wide effects of any change in policy instruments, is applied.
Findings
The main findings reveal that gross domestic product, private consumption and income in both urban and rural areas will follow a declining trend as a result of environmental tax imposition. In a scenario with the highest level of tax, the predicted percentage change to the gross domestic product and private consumption is estimated at −21.32 and −40.96, respectively. In the same scenario, pollution emissions would decrease by 12.4–22.6% for CO2, CH4 and N2O.
Originality/value
This study uses a general equilibrium model to examine the effects of the carbon tax on environmental issues and household welfare, considering the unique conditions and regulations of Iran. While the related literature examines the CO2 tax, the current study covers more pollutants, including CO2, CH4, N2O, CO, SO2 and NOx. In addition, a distinguishing feature of the current study is that it applies a modified version of the social accounting matrix (SAM) database, which includes the heavy subsidies of energy products. Another significant feature of the current study is that it examines tax policy while tax rates are exerted endogenously (compared to previous studies).
Keywords
Citation
Shakerin, S., Moosavi, S.N. and Aminifard, A. (2024), "Economic-environmental assessment of emission tax policy in developing countries: evidence from Iran", China Agricultural Economic Review, Vol. 16 No. 2, pp. 368-386. https://doi.org/10.1108/CAER-05-2023-0141
Publisher
:Emerald Publishing Limited
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