GTAP Resources: Resource Display
| GTAP Resource #7565 |
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"Nigeria’s diversification with climate mitigation outcomes – CGE applied to policy analysis" by Peszko, Grzegorz, Maksym Chepeliev and Dominique van der Mensbrugghe Abstract Fiscal policy reforms could fulfill Nigeria’s diversification aspirations, prevent the low-middle income trap and increase economic resilience to energy transition risks. The paper explores how fiscal policy reforms in Nigeria would interact with alternative carbon pricing, green industrial policies and trade-related measures applied by its trading partners. Scenarios simulated with the global CGE model ENVISAGE-NGA assume that the rest of the world form alternative hypothetical climate clubs. In some non-cooperative scenarios Nigeria is assumed to align its fiscal policies with a climate club (small or large). In other scenarios Nigeria aligns with OPEC+ and BRICS+ following business as usual policies The fiscal reforms with potential climate mitigation outcomes simulated in this study include removal of petrol subsidy implemented in 2023, but facing policy reversal, broadening the VAT base to remove waiver for petroleum products, increasing uniform VAT rate to 15 percent, carbon tax announced in Nigeria’s 2024 National Fiscal Policy , alternative uses of fiscal savings and additional revenues of the above tax reforms ( transfer to households through reduction of income taxes and investments in innovation and education to increase productivity. Fiscal reforms simulated in this study can significantly reduce domestic carbon emissions, while enabling diversification with mitigation outcomes and increasing resilience to transition risk. The model explores fiscal reforms that would support Nigeria’s aspirations towards higher income status but also identify a trade-off between long-term GDP growth and short-term welfare impact. Result-based climate payments (RBCP) for policy reforms could cumulatively amount to US$ 9.2 billion over 25 years, assuming US$10 per ton of reduced CO2. Mitigation outcomes of petrol subsidy removal could yield $459 million and of carbon tax $8.7 billion with increasing annual revenues. |
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- Climate change policy - Conventional energy - Trade and the environment - GTAP Data Base and extensions - Domestic policy analysis - Technological change - Multilateral trade negotiations - Partial and general equilibrium models - Africa (West) |
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Public Access  Paper (1.9 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
