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Distributive Effects of the Introduction of a Tax to Fossil Fuel Demand

Author

Listed:
  • Héctor Manuel Bravo Pérez

    (Profesor, Facultad de Economía, UNAM. México, D.F. Mexico.)

  • Juan Carlos Castro Ramírez

    (Profesor-investigador, Departamento de Economía, UAM-Iztapalapa. México, D.F. Mexico.)

  • Miguel Ángel Gutiérrez Andrade

    (Profesor-investigador, Departamento de Ingeniería Eléctrica, UAM-Iztapalapa. México, D.F. Mexico.)

Abstract

This paper aims to verify if there is any effect in the income distribution for the Mexican economy when applying a tax on fossil fuels in order to reduce CO2 emissions. In order to reach this goal a computable general equilibrium model was built following the Shoven and Whalley method. It is observed that the application of a tax achieves a reduction in fossil fuel demand, but it does not have any meaningful consequence on the income redistribution of the society. All the levels of the economy have a loss in welfare as a consequence of the application of this tax.

Suggested Citation

  • Héctor Manuel Bravo Pérez & Juan Carlos Castro Ramírez & Miguel Ángel Gutiérrez Andrade, 2013. "Distributive Effects of the Introduction of a Tax to Fossil Fuel Demand," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(4, Cierre), pages 407-439.
    • Handle: RePEc:emc:ecomex:v:22:y:2013:i:4:p:407-439
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    More about this item

    Keywords

    applied general equilibrium; environmental policy; fiscal policy; sustainability; climate change.;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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