Taxing Carbon Under Market Incompleteness
29 Pages Posted: 18 Sep 2013
Date Written: September 17, 2013
This paper is the first attempt, to the best of our knowledge, to study the impact of a carbon tax by means of a heterogeneous agents model. The objectives of the paper are two: i) To assess how the results of a representative agent model compare to those coming from a model accounting for heterogeneity across agents when evaluating aggregate economic and environmental impacts of a carbon tax; ii) To assess the distributional implications of a carbon tax (and equivalent cap) and how they can be mitigated through different recycling schemes or allocations.
Keywords: Carbon Tax, Double Dividend, Heterogeneous Agents Model
JEL Classification: Q58, Q54, E2
Suggested Citation: Suggested Citation