Effect of Carbon taxation and climate finance on Malagasy economy: application through the use of DSGE Model[Les effets de la tarification carbone et des financements climatiques sur l'économie Malagasy: application à travers un modèle DSGE]

Having become a central global concern, the large-scale spread of greenhouse gas emissions into the atmosphere generates undesirable effects both on the environment and on the economic system. The severity of the consequences of climate change has, however, reshaped economic challenges and strategies. Major reorientations of economic policies—particularly climate policies—based mainly on the level of CO2 emissions have been adopted during the various Conferences of the Parties (COP). This issue has thus led us to investigate the effects of these climate policies on the overall economy. To achieve our objective, a climate DSGE model reflecting the characteristics of Madagascar was implemented. The results of the impulse response analysis revealed that dynamic carbon taxation proves to be more effective in reducing CO2 emissions compared to a quota policy, which tends to be a source of volatility. As for climate finance, it is insufficient to stimulate the economy if not combined with carbon pricing.