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Taxation As a Policy Instrument to Reduce CO2 Emissions: A Net Benefit Analysis

Publication Type:

Journal Article

Source:

(2005)

URL:

http://scholar.google.com/scholar?as_q=Multiple+Scales+and+Regulatory+Gaps+in+Environmental+Change:+The+Case+of+Salmon+Aquaculture&as_authors=McDaniels

Abstract:

is study evaluates the costs and benefits of energy taxation as a policy instrument to conserve energy and reduce CO{sub 2} emissions. The study combines economic cost estimates generated with a CGE model and monetary estimates of environmental damages in a comprehensive cost/benefit framework. We find that optimal CO{sub 2} emissions reductions range from 5 to 38.; depending on different assumptions about energy substitution elasticities and environmental damages. CO{sub 2} emissions reductions of between 8 and 64% can be attained at no additional welfare cost relative to a policy of not undertaking any action to control CO{sub 2} emissions.