Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia
This study uses a computable general equilibrium model to analyze various policy scenarios for a carbon tax on greenhouse gas emissions from petroleum fuels and kerosene in Ethiopia. The carbon tax starts at $5 per ton of carbon dioxide in 2018 and...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/536761558371853162/Exploring-Carbon-Pricing-in-Developing-Countries-A-Macroeconomic-Analysis-in-Ethiopia http://hdl.handle.net/10986/31738 |
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okr-10986-317382022-09-20T00:14:27Z Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia Telaye, Andualem Benitez, Pablo Tamru, Seneshaw Medhin, Haileselassie Toman, Michael CARBON TAX CARBON PRICING CLIMATE CHANGE CLIMATE CHANGE MITIGATION DISTRIBUTIONAL IMPACT CGE MODEL GREENHOUSE GAS EMISSIONS This study uses a computable general equilibrium model to analyze various policy scenarios for a carbon tax on greenhouse gas emissions from petroleum fuels and kerosene in Ethiopia. The carbon tax starts at $5 per ton of carbon dioxide in 2018 and rises to $30 per ton in 2030. Different scenarios examine the impacts with revenue recycling through a uniform sales tax reduction, reduction of labor income tax, reduction of business income tax, direct transfer back to households, and use by the government to reduce debt. Because petroleum fuels and kerosene are a relatively small part of the Ethiopian economy, the carbon tax has quite small impacts on overall economic activity while having a notable proportionate impact on greenhouse gas emissions from these energy sources, depending on the recycling scenario. The carbon tax can raise significant revenue -- up to $800 million per year by 2030. The impacts on the poor through increased cost of living are not that large, since the share of the poor in total use of petroleum fuels and kerosene is small. In terms of income effects through employment changes, urban households tend to experience more impacts than rural households, but the results also depend on the household skill level and the revenue recycling scenario. 2019-05-21T17:24:48Z 2019-05-21T17:24:48Z 2019-05 Working Paper http://documents.worldbank.org/curated/en/536761558371853162/Exploring-Carbon-Pricing-in-Developing-Countries-A-Macroeconomic-Analysis-in-Ethiopia http://hdl.handle.net/10986/31738 English Policy Research Working Paper;No. 8860 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Ethiopia |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
CARBON TAX CARBON PRICING CLIMATE CHANGE CLIMATE CHANGE MITIGATION DISTRIBUTIONAL IMPACT CGE MODEL GREENHOUSE GAS EMISSIONS |
| spellingShingle |
CARBON TAX CARBON PRICING CLIMATE CHANGE CLIMATE CHANGE MITIGATION DISTRIBUTIONAL IMPACT CGE MODEL GREENHOUSE GAS EMISSIONS Telaye, Andualem Benitez, Pablo Tamru, Seneshaw Medhin, Haileselassie Toman, Michael Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia |
| geographic_facet |
Africa Ethiopia |
| relation |
Policy Research Working Paper;No. 8860 |
| description |
This study uses a computable general
equilibrium model to analyze various policy scenarios for a
carbon tax on greenhouse gas emissions from petroleum fuels
and kerosene in Ethiopia. The carbon tax starts at $5 per
ton of carbon dioxide in 2018 and rises to $30 per ton in
2030. Different scenarios examine the impacts with revenue
recycling through a uniform sales tax reduction, reduction
of labor income tax, reduction of business income tax,
direct transfer back to households, and use by the
government to reduce debt. Because petroleum fuels and
kerosene are a relatively small part of the Ethiopian
economy, the carbon tax has quite small impacts on overall
economic activity while having a notable proportionate
impact on greenhouse gas emissions from these energy
sources, depending on the recycling scenario. The carbon tax
can raise significant revenue -- up to $800 million per year
by 2030. The impacts on the poor through increased cost of
living are not that large, since the share of the poor in
total use of petroleum fuels and kerosene is small. In terms
of income effects through employment changes, urban
households tend to experience more impacts than rural
households, but the results also depend on the household
skill level and the revenue recycling scenario. |
| format |
Working Paper |
| author |
Telaye, Andualem Benitez, Pablo Tamru, Seneshaw Medhin, Haileselassie Toman, Michael |
| author_facet |
Telaye, Andualem Benitez, Pablo Tamru, Seneshaw Medhin, Haileselassie Toman, Michael |
| author_sort |
Telaye, Andualem |
| title |
Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia |
| title_short |
Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia |
| title_full |
Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia |
| title_fullStr |
Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia |
| title_full_unstemmed |
Exploring Carbon Pricing in Developing Countries : A Macroeconomic Analysis in Ethiopia |
| title_sort |
exploring carbon pricing in developing countries : a macroeconomic analysis in ethiopia |
| publisher |
World Bank, Washington, DC |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/536761558371853162/Exploring-Carbon-Pricing-in-Developing-Countries-A-Macroeconomic-Analysis-in-Ethiopia http://hdl.handle.net/10986/31738 |
| _version_ |
1764474984078508032 |