Modelling an ETR for Europe

Terry Barker, Christian Lutz, Bernd Meyer, Hector Pollitt and Stefan Speck

in Environmental Tax Reform (ETR)

Published in print April 2011 | ISBN: 9780199584505
Published online May 2011 | e-ISBN: 9780191725012 | DOI:

Series: Creating Sustainable Growth In Europe

Modelling an ETR for Europe

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This chapter describes the modelling of an ETR for Europe, using the models described in Chapter 8. The chapter starts by describing the role of the baseline in the analysis and why it is important to choose an appropriate baseline. It then describes the main scenarios undertaken, with a discussion of the taxes implemented and the relationship between the EU ETS and the carbon tax applied to the rest of the economy, the role of revenue recycling in the different scenarios, and spending of some of the tax revenues on eco-innovation. The major part of the chapter describes the results of the modelling, including: aggregate energy/environment results (i.e. reduction in emissions and energy demand); aggregate economic results; sectoral energy/environment results; sectoral economic results.

Keywords: baseline; taxes; carbon tax; revenue recycling; eco-innovation

Chapter.  11299 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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