Economic Effects of a Tax Policy to Reduce Greenhouse-Gas Emissions in Brazil

Authors

  • Yuri Cesar de Lima e Silva
  • Luis Savio Barbosa Dantas
  • Nelson Leitao Paes Universidade Federal de Pernambuco Universidade Federal do Mato Grosso

DOI:

https://doi.org/10.5380/re.v41i75.68240

Keywords:

Taxes, Emissions, Double Dividend, Growth Model, Environment Policy

Abstract

Brazil has proposed to reduce emissions by 37% below 2005 levels in 2025, and for indicative purposes, to further reduce it by 43% in 2030, following the agreement of COP-21 in Paris. This study seeks to investigate the macroeconomic effects if Brazil adopts a GHG emissions tax to meet the carbon reduction commitment and to simulate the thesis of "double dividend". A neoclassical growth model with the introduction of environment and fiscal policy was used. A tax rate on CO2 emissions of US$ 100.00/tCO2e would be enough to meet Brazil´s target of emission reduction. The double dividend hypothesis was observed in Brazil’s case and the best results occur when capital income tax is reduced.

Author Biography

Nelson Leitao Paes, Universidade Federal de Pernambuco Universidade Federal do Mato Grosso

Professor da Pós-Graduação em Economia da UFPE e da UFMT

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Published

2020-06-30

How to Cite

de Lima e Silva, Y. C., Dantas, L. S. B., & Paes, N. L. (2020). Economic Effects of a Tax Policy to Reduce Greenhouse-Gas Emissions in Brazil. Revista De Economia, 41(75). https://doi.org/10.5380/re.v41i75.68240

Issue

Vol. 41 No. 75 (2020)

Section

Artigos

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