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Environmental taxation for reducing greenhouse gases emissions in Chile: an input–output analysis

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  • Cristian Mardones

    (University of Concepción)

  • Tamara Muñoz

    (University of Concepción)

Abstract

This study uses an environmental extension of the Leontief price model to analyse various tax rates on the carbon dioxide (CO2) and other greenhouse gases (GHGs) emissions that are generated by the most polluting sectors of the Chilean economy. By using this methodology, it is possible to obtain a counterfactual scenario for the prices, levels of production and emissions of each economic sector, as well as, for tax collection, consumer spending and the consumer price index. This analysis is important because Chile is internationally committed to reducing its emissions by 30% by 2030. According to the results, to meet the target CO2 emissions only using tax policies, tax should be approximately 20 times higher than their current levels in the electricity sector. Alternatively, a lower tax of US $30/ton of CO2 and other GHGs applied to all sectors of the economy could reduce CO2 and other GHGs emissions by up to 25.7% with less of a negative impact on the economy.

Suggested Citation

  • Cristian Mardones & Tamara Muñoz, 2018. "Environmental taxation for reducing greenhouse gases emissions in Chile: an input–output analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 20(6), pages 2545-2563, December.
    • Handle: RePEc:spr:endesu:v:20:y:2018:i:6:d:10.1007_s10668-017-0004-z
    DOI: 10.1007/s10668-017-0004-z
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    Cited by:

    1. Tao Peng & Zhiyuan Jin & Lujun Xiao, 2022. "Evaluating low-carbon competitiveness under a DPSIR-Game Theory-TOPSIS model—A case study," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5962-5990, April.
    2. Mardones, Cristian & Mena, Camilo, 2020. "Effects of the internalization of the social cost of global and local air pollutants in Chile," Energy Policy, Elsevier, vol. 147(C).
    3. Mardones, Cristian & Velásquez, Andrés, 2021. "Macroeconomic, intersectoral, and environmental effects of R&D subsidies in Chile: An input-output approach," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    4. Li, Zhengda & Zheng, Chengxin & Liu, Aimin & Yang, Yang & Yuan, Xiaoling, 2022. "Environmental taxes, green subsidies, and cleaner production willingness: Evidence from China's publicly traded companies," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    5. Yu Sun & Feng Lian & Zhong-Zhen Yang, 2022. "Optimizing the location of physical shopping centers under the clicks-and-mortar retail mode," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 2288-2314, February.

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    Keywords

    Leontief price model; Environmental taxes; CO2; GHGs;
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