Template-Type: ReDIF-Paper 1.0
Title: Double Dividend of Low-carbon Growth in Mexico: A Dynamic General Equilibrium Assessment
Number: ebdeaa62-c32a-4c84-baf0-275787967e05
Handle: RePEc:avg:wpaper:en7733
Publication-Status: Published in Research Papers
Author-Name: Fabio GRAZI
Author-Name: François-Xavier BELLOCQ
Author-Name: Frédéric REYNES
Author-Name: Gisella LANDA
Author-Name: Ivan ISLAS
Abstract: 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.
Creation-Date: 2017-11-29
File-URL: https://www.afd.fr/sites/afd/files/imported-files/09-papiers-recherche.pdf
File-Format: Application/pdf
Keywords: Mexique
Classification-JEL: Q
Length: 22