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Environmental Tax Reforms in Switzerland A Computable General Equilibrium Impact Analysis

Author

Listed:
  • Christoph Böhringer

    (University of Oldenburg, Department of Economics)

  • André Müller

    (Ecoplan, Bern, Switzerland)

Abstract

The Swiss energy strategy until 2050 envisages ambitious CO2 emission reduction targets along with substantial cutbacks in electricity consumption to establish a low-carbon economy without nuclear energy. Our computable general equilibrium analysis find that compliance with stringent CO2 constraints requires high CO2 taxes on economic activities which are not eligible for international emissions trading; likewise, electricity consumers are burdened with substantial electricity taxes. Environmental tax reforms are not likely to generate welfare gains without accounting for the benefits of improved environmental quality . However, economic adjustment costs to a low carbon economy without nuclear energy remain modest and can be markedly reduced through revenue-neutral cuts of initial distortionary taxes. On the other hand, alternative recycling strategies pose a trade-off between efficiency anddistributional justice which has to be resolved on normative grounds.

Suggested Citation

  • Christoph Böhringer & André Müller, 2014. "Environmental Tax Reforms in Switzerland A Computable General Equilibrium Impact Analysis," Working Papers V-361-14, University of Oldenburg, Department of Economics, revised Jan 2014.
    • Handle: RePEc:old:dpaper:361
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    References listed on IDEAS

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    Cited by:

    1. Orecchia,Carlo & Cala,Valerio Ferdinando & de Cristofaroa,Fabiana & Dudu,Hasan, 2023. "Assessing the Efficiency and Fairness of the Fit for 55 Package toward Net Zero Emissions under Different Revenue Recycling Schemes for Italy," Policy Research Working Paper Series 10592, The World Bank.
    2. Liu, Yu & Lu, Yingying, 2015. "The Economic impact of different carbon tax revenue recycling schemes in China: A model-based scenario analysis," Applied Energy, Elsevier, vol. 141(C), pages 96-105.
    3. Babonneau, Frédéric & Thalmann, Philippe & Vielle, Marc, 2015. "Defining deep decarbonization pathways for Switzerland: An economic evaluation based on the Computable General Equilibrium Model GEMINI-E3," Conference papers 332637, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    environmental tax reforms; computable general equilibrium;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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