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The effect of carbon tax on per capita CO2 emissions

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  • Lin, Boqiang
  • Li, Xuehui
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    Abstract

    As the most efficient market-based mitigation instrument, carbon tax is highly recommended by economists and international organizations. Countries like Denmark, Finland, Sweden, Netherlands and Norway were the first adopters of carbon tax and as such, research on the impacts and problems of carbon tax implementation in these countries will provide great practical significance as well as caution for countries that are to levy the tax. Different from the existing studies that adopt the model simulation approaches, in this article, we comprehensively estimate the real mitigation effects of the five north European countries by employing the method of difference-in-difference (DID). The results indicate that carbon tax in Finland imposes a significant and negative impact on the growth of its per capita CO2 emissions. Meanwhile, the effects of carbon tax in Denmark, Sweden and Netherlands are negative but not significant. The mitigation effects of carbon tax are weakened due to the tax exemption policies on certain energy intensive industries in these countries. Notwithstanding, in Norway, as the rapid growth of energy products drives a substantial increase of CO2 emissions in oil drilling and natural gas exploitation sectors, carbon tax actually has not realized its mitigation effects.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 39 (2011)
    Issue (Month): 9 (September)
    Pages: 5137-5146

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    Handle: RePEc:eee:enepol:v:39:y:2011:i:9:p:5137-5146

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Per capita CO2 emissions Carbon tax Tax exemption;

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    Cited by:
    1. Nicole A. MATHYS & Jaime de MELO, 2012. "Reconciling Trade and Climate Policies," Working Papers P37, FERDI.
    2. Fang, Guochang & Tian, Lixin & Fu, Min & Sun, Mei, 2013. "The impacts of carbon tax on energy intensity and economic growth – A dynamic evolution analysis on the case of China," Applied Energy, Elsevier, vol. 110(C), pages 17-28.
    3. Dong, Feng & Li, Xiaohui & Long, Ruyin & Liu, Xiaoyan, 2013. "Regional carbon emission performance in China according to a stochastic frontier model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 525-530.
    4. Di Cosmo, Valeria & Hyland, Marie, 2013. "Carbon tax scenarios and their effects on the Irish energy sector," Energy Policy, Elsevier, vol. 59(C), pages 404-414.

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