Carbon Taxes : Their Macroeconomic Effects and Prospects for Global Adoption: A Survey of the Literature

Author/Editor:

Ved P. Gandhi ; Javier Cuervo

Publication Date:

May 1, 1998

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The carbon tax is a major instrument for curbing greenhouse gas emissions that cause global warming. Yet its adoption has been limited because of concerns over its effects on economic growth, income distribution, and international competitiveness. The paper shows that policymakers can minimize the effects of the tax on economic growth through an efficient recycling of tax revenues and on equity through the adoption of appropriate mitigating or compensating measures. To eliminate the worry about the loss of competitiveness, the paper suggests an international agreement on a coordinated adoption of the tax.

Series:

Working Paper No. 98/73

English

Publication Date:

May 1, 1998

ISBN/ISSN:

9781451849431/1018-5941

Stock No:

WPIEA0731998

Format:

Paper

Pages:

39

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