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Carbon taxation in Russia: Prospects for a double dividend and improved energy efficiency

Listed author(s):
  • Orlov, Anton
  • Grethe, Harald
  • McDonald, Scott

This study analyses the sectoral and macroeconomic impact of carbon taxes on the Russian economy, one of the world's most energy- and carbon-intensive economies, while assessing the hypothesis of a double dividend. Substituting carbon taxes for labour taxes can reduce GHG emissions and enhance welfare by improving the efficiency of the tax system — a strong double dividend. The analyses confirm, when capital is not internationally mobile, that a double dividend is likely to occur under (i) a high elasticity of labour supply, (ii) high elasticities of substitution between labour and the capital-energy aggregate, (iii) low elasticities of substitution between capital and energy. It is the tax-shifting effect between capital and labour that is crucial. In contrast, welfare losses resulting from the environmental tax reform may be substantial if capital is internationally mobile.

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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 37 (2013)
Issue (Month): C ()
Pages: 128-140

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Handle: RePEc:eee:eneeco:v:37:y:2013:i:c:p:128-140
DOI: 10.1016/j.eneco.2013.01.008
Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

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