Macroeconomic Effects of an uniform carbon Tax

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21-03-2022
GreenREFORM

This memo describes the effects of an implementation of a Danish greenhouse gas emission tax in the current preliminary version of GreenREFORM.

Abstract

This memo describes the effects of an implementation of a Danish greenhouse gas emission tax (also referred to as carbon tax) in the current preliminary version of the dynamic CGE-model GreenREFORM.

The analysis presented illustrates the qualitative effects of a carbon tax, in terms of macroeconomic and sectoral effects in GreenREFORM. Even though the exact figures will diverge from the final model, the general dynamic effects, as outlined in this memo, are likely to remain.

The results presented in this note is of a preliminary nature. They should not be interpreted as painting the full picture of effects of similar policies in practice. The note is published based on a wish for openness in the development of the model and to encourage professional discussion about GreenREFORM. Please do not cite without prior agreement.