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ID096124
Title ProperDouble dividend effectiveness of energy tax policies and the elasticity of substitution
Other Title Informationa CGE appraisal
LanguageENG
AuthorSancho, Ferran
Publication2010.
Summary / Abstract (Note)There is a considerable body of literature that has studied whether or not an adequately designed tax swap, whereby an ecotax is levied and some other tax is reduced while keeping government income constant, may achieve a so-called double dividend, that is, an increase in environmental quality and an increase in overall efficiency. Arguments in favor and against are abundant. Our position is that the issue should be empirically studied starting from an actual, non-optimal tax system structure and by way of checking the responsiveness of equilibria to revenue neutral tax regimes under alternate scenarios regarding technological substitution. With the use of a CGE model, we find that the most critical elasticity for achieving a double dividend is the substitution elasticity between labor and capital whereas the elasticity that would generate the highest reduction in carbon dioxide emissions is the substitution elasticity among energy goods.
`In' analytical NoteEnergy Policy Vol. 38, No. 6; Jun 2010: p.2927-2933
Journal SourceEnergy Policy Vol. 38, No. 6; Jun 2010: p.2927-2933
Key WordsApplied General Equilibrium ;  Tax Reform ;  Double Dividend