Double Dividend of Low-carbon Growth in Mexico: A Dynamic General Equilibrium Assessment

published in November 2015
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This paper simulates the medium- and long-term impact of proposed and expected energy policy on the environment and on the Mexican economy. The analysis has been conducted with a Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy (Three-ME). This model is well suited for policy assessment purposes in the context of developing economies as it indicates the transitional effects of policy intervention. Three-ME estimates the carbon tax required to meet emissions reduction targets within the Mexican “Climate Change Law”, and assesses alternative policy scenarios, each reflecting a different strategy for the recycling of tax revenues. With no compensation, the taxation policy if successful will succeed in reducing CO2 emissions by more than 75% by 2050 with respect to Business as Usual (BAU), but at high economic costs. Under full redistribution of carbon tax revenues, a double dividend arises and the policy is beneficial both in terms of GDP and CO2 emissions reduction.
pdf : 3.22 MB
author(s) :
Fabio GRAZI
François-Xavier BELLOCQ
Frédéric REYNES
Gisella LANDA
Ivan ISLAS
collection :
Research Papers
issn :
2492-2846
pages :
22
number :
9
available also in : en
3.22 MB (pdf)
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