Macroeconomic effects of carbon dioxide emission reduction: a computable general equilibrium analysis for Malaysia
This study analyzes the macroeconomic effects of limiting carbon emissions using computable general equilibrium (CGE) model in the Malaysian economy. Doing so, we developed an environmental computable general equilibrium model and investigate carbon tax policy responses in the economy applying exogenously different degrees of carbon tax into the model. Three simulations were carried out using a Malaysian Social Accounting Matrix. The carbon tax policy illustrates that a 1.21% reduction of carbon emission reduces the nominal GDP by 0.82% and exports by 2.08%; a 2.34% reduction of carbon emission reduces the nominal GDP by 1.90% and exports by 3.97%and a 3.40% reduction of carbon emission reduces the nominal GDP by 3.17% and exports by 5.71%. Imposition of successively higher carbon tax results in increased government revenue from baseline by 26.67%, 53.07% and 79.28% respectively. However, fixed capital investment increased in scenario 1a (1st) by 0.43% but decreased in scenarios 1b (2nd) and 1c (3rd) by 0.26% and 1.79% respectively from the baseline. According to our findings policy-makes should consider initial (1st) carbon tax policy. This policy results in achieving reasonably good environmental impacts without losing the investment, fixed capital investment, investment share of nominal GDP and government revenue.
|Date of creation:||12 May 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fisher-Vanden, Karen & Sue Wing, Ian, 2008. "Accounting for quality: Issues with modeling the impact of R&D on economic growth and carbon emissions in developing economies," Energy Economics, Elsevier, vol. 30(6), pages 2771-2784, November.
- Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November.
- Matthew A. Cole & Robert J. R. Elliott, 2005. "FDI and the Capital Intensity of "Dirty" Sectors: A Missing Piece of the Pollution Haven Puzzle," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 530-548, November.
- Hiro Lee & David Roland-Holst, 1993. "International Trade and the Transfer of Environmental Costs and Benefits," OECD Development Centre Working Papers 91, OECD Publishing.
- Blitzer, Charles R. & Eckaus, R.S. & Lahiri, Supriya & Meeraus, Alexander, 1992. "Growth and welfare losses from carbon emissions restrictions : a general equilibrium analysis for Egypt," Policy Research Working Paper Series 963, The World Bank.
- A. Reinert, Kenneth & W. Roland-Holst, David, 2001. "NAFTA and Industrial Pollution: Some General Equilibrium Results," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 165-179.
- Carlo Perroni & Randall M. Wigle, 1994. "International Trade and Environmental Quality: How Important Are the Linkages?," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 551-67, August.
- Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 1998.
"Is Free Trade Good for the Environment?,"
NBER Working Papers
6707, National Bureau of Economic Research, Inc.
- Arik Levinson, 2006.
"Unmasking the Pollution Haven Effect,"
2008-02, Department of Economics, University of Calgary, revised 01 Jan 2008.
- Robinson, Sherman & Yunez-Naude, Antonio & Hinojosa-Ojeda, Raul & Lewis, Jeffrey D. & Devarajan, Shantayanan, 1999. "From stylized to applied models:: Building multisector CGE models for policy analysis," The North American Journal of Economics and Finance, Elsevier, vol. 10(1), pages 5-38.
- Bullard, Clark W. & Herendeen, Robert A., 1975. "The energy cost of goods and services," Energy Policy, Elsevier, vol. 3(4), pages 268-278, December.
- Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 2002. "Trade and the Environment in General Equilibrium: Evidence from Developing Economies," Staff General Research Papers 4090, Iowa State University, Department of Economics.
- Mette Wier, 1998. "Sources of Changes in Emissions from Energy: A Structural Decomposition Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 10(2), pages 99-112.
- Beghin, John & Dessus, Sebastien & Roland-Holst, David & van der Mensbrugghe, Dominique, 1997.
"The trade and environment nexus in Mexican agriculture. A general equilibrium analysis,"
Blackwell, vol. 17(2-3), pages 115-131, December.
- Beghin, John & Dessus, Sebastien & Roland-Holst, David & Mensbrugghe, Dominique van der, 1997. "The trade and environment nexus in Mexican agriculture. A general equilibrium analysis," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 17(2-3), December.
- Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 2005.
"Trade Liberalization and the Environment in the Pacific Basin: Coordinated Approaches to Mexican Trade and Environment Policy,"
Staff General Research Papers
12742, Iowa State University, Department of Economics.
- Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 1995. "Trade Liberalization and the Environment in the Pacific Basin: Coordinated Approaches to Mexican Trade and Environment Policy," Staff General Research Papers 1588, Iowa State University, Department of Economics.
- Jorgenson, Dale W. & Wilcoxen, Peter J., 1990. "Intertemporal general equilibrium modeling of U.S. environmental regulation," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 715-744.
- Munksgaard, Jesper & Pedersen, Klaus Alsted, 2001. "CO2 accounts for open economies: producer or consumer responsibility?," Energy Policy, Elsevier, vol. 29(4), pages 327-334, March.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:8667. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.