Carbon Tax Impacts on Producer Costs and Competitiveness as the Main Determinant of Macroeconomic Outcomes
Turner, Karen and Alabi, Oluwafisayo and Katris, Antonios and Swales, Kim (2023) Carbon Tax Impacts on Producer Costs and Competitiveness as the Main Determinant of Macroeconomic Outcomes. University of Strathclyde, Glasgow. (https://doi.org/10.17868/strath.00081038)
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Abstract
This is the first of two policy briefs being produced by the Centre for Energy Policy to help build better policy understanding of what the macroeconomic impacts of introducing greater and broader carbon pricing/taxation may be. We use multiple sector economywide computable general equilibrium (CGE) modelling to consider the impacts of a hypothetical tax impacting the price of both domestically supplied and imported fossil fuels (gas and refined oil/petroleum) on a range of key macroeconomic indicators. At this stage we run stripped down scenario simulations focussing solely on the introduction of the carbon tax, with the aim of isolating and explaining the mechanics of what impacts are likely to arise, and how they are affected by different assumptions. The basic finding presented in this first briefing is that, with no further policy intervention, decarbonisation action(s), or change in international trade conditions, the economy should be expected to contract with a sustained increase in the consumer price index (CPI) and losses in producer competitiveness where carbon costs are more fully internalised. The main determinant of the extent of the contraction is what happens to the costs and competitiveness of UK producers.
ORCID iDs
Turner, Karen, Alabi, Oluwafisayo ORCID: https://orcid.org/0000-0002-3560-5929, Katris, Antonios ORCID: https://orcid.org/0000-0001-9352-2307 and Swales, Kim;Persistent Identifier
https://doi.org/10.17868/strath.00081038-
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Item type: Report ID code: 81038 Dates: DateEvent31 March 2023PublishedSubjects: Social Sciences > Economic Theory Department: Strategic Research Themes > Energy
Faculty of Humanities and Social Sciences (HaSS) > Government and Public Policy > Politics
Strathclyde Business School > EconomicsDepositing user: Pure Administrator Date deposited: 10 Jun 2022 13:49 Last modified: 01 Sep 2024 01:54 URI: https://strathprints.strath.ac.uk/id/eprint/81038