Fiscal limits on first-best climate policy: A CGE analysis for Europe

摘要: We use a standard computable general equilibrium model to explore the fiscal implications of stringent carbon dioxide emission reduction in Europe. Both immediate targets (2030% by 2020) and medium-term (80-90% 2050) for abatement can be met with tax that is modest sizeable. Imposing budget neutrality, would allow all other taxes fall 5% (20%) cut emissions about 40% (80%). For 80% reduction, only third largest terms revenue. A cost 1.5% GDP. Costs are roughly exponential abatement. The economic impact minimized if revenue preferentially used reduce on intermediates import tariffs; such taxes, however, bring little at present. Emission Europe affects trade patterns across world. It hampers economies West Asia Africa, but has stimulating effect elsewhere. Economies everywhere outside become more carbon-intensive. About one four avoided emitted