Measuring Market Damage of Automobile Related Carbon Tax by Dynamic Computable General Equilibrium model
This paper provides the political evaluation of automobile related carbon tax to control CO2 emissions caused by automobiles. In Japan, the Ministry of Transport presented the target to bring the increasing rate of the CO2 emissions in the transport sector fewer than 17% from 1990 level. We computed the carbon tax needed to accomplish its target by the dynamic computable general equilibrium (DCGE) model. In the DCGE model, the economic activities of households or industries are formulated by mathematical economic model, so we are able to grasp market disbenefits generated from the change of economic activities as well as the regulated volume of the CO2 emissions. The market disbenefits are called by deadweight loss, and we computed those value amounts by the concept of equivalent variation. The CGE approaches have been developed to evaluate economic impacts of the change of taxation or international trade policy, which are surveyed by Shoven and Whalley (1984). Recently, the CGE models to compute general equilibrium effects of environmental policies have been proposed by Jorgenson and Wilcoxen (1990), Bergman (1991), Ballard and Medema (1993) and Zhang (1998), and so on. And the CGE approaches have been extended to the dynamic analysis, in order to measure the environmental effects or economic influences in the point of long-term for environmental problems. The DCGE model, built in this research, follows those previous CGE approaches in principle. We modeled, however, the automobile related industrial or transport sector?s behavior and household travel behavior in full. Especially, the travel behavior for private tips of household is formulated by the probability choice paradigm shown by McFadden. By using this DCGE model, we simulated the automobile related carbon tax needed to accomplish the target in the transport sector. At this simulation, we afraid that the fuel price elasticity might give a lot of impacts to the simulation results. So we executed the sensitivity analysis by giving the fuel price elasticity of two patterns. At the case of fuel price elasticity 0.1, the automobile related carbon tax is calculated by 0.11[million yen/tC] and the market disbenefit is evaluated by 0.16[billion yen/year]. Next, at the case of fuel price elasticity 0.3, the carbon tax is 0.114[million yen/tC] and the market disbenefit is 0.2[billion yen/year].
|Date of creation:||Aug 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Welthandelsplatz 1, 1020 Vienna, Austria|
Web page: http://www.ersa.org
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.:
- Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
- Goulder, Lawrence H. & Parry, Ian W. H. & Williams III, Roberton C. & Burtraw, Dallas, 1999.
"The cost-effectiveness of alternative instruments for environmental protection in a second-best setting,"
Journal of Public Economics,
Elsevier, vol. 72(3), pages 329-360, June.
- Lawrence H. Goulder & Ian W. H. Parry & Roberton C. Williams III & Dallas Burtraw, 1998. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," NBER Working Papers 6464, National Bureau of Economic Research, Inc.
- Burtraw, Dallas & Parry, Ian & Goulder, Lawrence & Williams III, Roberton, 1998. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," Discussion Papers dp-98-22, Resources For the Future.
- DE BORGER, Bruno & SWYSEN, Didier, 1998. "Optimal pricing and regulation of transport externalities: A welfare comparison of some policy alternatives," SESO Working Papers 1998004, University of Antwerp, Faculty of Applied Economics.
- Lars Bergman, 1991. "General equilibrium effects of environmental policy: A CGE-modeling approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 1(1), pages 43-61, March.
- 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.
- Shoven,John B. & Whalley,John, 1992.
"Applying General Equilibrium,"
Cambridge University Press, number 9780521319867.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa03p257. 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: (Gunther Maier)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.