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GTAP Resource #4639

"The Distributional and Welfare Effects of the Australian Emissions Trading Scheme"
by Tran, Trang, Sam Meng, Mahinda Siriwardana, Judith McNeill and Duy Nong


Abstract
The Labor Australian Government introduced a carbon pricing scheme that commenced with a fixed carbon price of $23 per tonne of CO2-e on 1st July 2012, then would switch to an emissions trading scheme on 1st July 2015. The objective of this scheme was to achieve the Kyoto emissions reduction target of at least 5 percent below 2000 levels by 2020. We examine the effects of a domestic emissions trading scheme on prices, distributional income and welfare of Australian households. To do this, a single country, static CGE model is employed with an environmentally-extended Social Accounting Matrix (SAM). Households are disaggregated into 20 household groups and household data is collected from the Household Expenditure Survey, 2009-2010. The results indicate that the emissions price is estimated at around $20 per tonne of CO2-e, and the permit revenue is over $10 billion. The electricity price increases the highest percentage of 13.55 percent. The consumer price index mildly increases at 0.42 percent. All households experience a reduction in income and expenditure with varying degrees. Such changes affect negatively the welfare of all household groups. To mitigate these effects, half of the permit revenue is returned to all household groups in four alternative ways. We find that an equal lump-sum transfer has positive effects on welfare of most household groups.


Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Version:
Created: Tran, T. (4/10/2015)
Updated: Tran, T. (6/3/2015)
Visits: 865
- Climate change policy
- Climate impacts
- Economic development
- Economic growth
- Oceania


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Posted by: Tran, Trang   4/12/2015 4:07:00 AM