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The Double Dividend Hypothesis in a CGE Model: Specific Factors and Variable Labour Supply

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  • Iain Fraser

    ()

  • Robert Waschik

    ()

Abstract

Employing a CGE model we examine the Double Dividend (DD) hypothesis for Australia and UK. Following Bento and Jacobsen (2007), we analyze specific factors in the production of energy goods and the impact on the DD. By incorporating endogenous labour supply we examine the labour market effect of targeted abatement policies. For Australia the DD is significantly larger with the specific factor characterisation of the economy when recycling revenue through reductions in consumption taxes, but there is no evidence of a DD when employing income tax. We find minimal evidence of a DD for UK for either recycling instrument.

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Bibliographic Info

Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number 1001.

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Date of creation: Apr 2010
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Handle: RePEc:ukc:ukcedp:1001

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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 764000
Fax: +44 (0)1227 827850
Web page: http://www.ukc.ac.uk/economics/

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Keywords: Environmental Taxes; Double Dividend; Specific Factors.;

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Cited by:
  1. Harry Clarke, 2010. "Some Basic Economics of Carbon Taxes," CCEP Working Papers 0410, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  2. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.

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