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M. P. Ramos and O. O. Chisari
economy may not necessarily afford. Consequently, we leave aside this option of an
ETR in Argentina.
The literature highlights the possibility that multiple dividends may emerge as a
consequence of an ETR that depends on factors market conditions. Looking for those
multiple dividends, we will evaluate the sensitivity of the results of these scenarios
to:
1. Different conditions for the labour market: full employment, unemployment due
to real constant wages and unemployment due to nominal constant wages.
2. Different degrees of national and international capital mobility: low vs. high
inter-sectoral capital mobility.
3. The possibility of implementing a more ecological production technology
(modelling of latent technology) through the imports of capital goods and FDI
in the EGS market opening scenario.
Multiple Dividends: Results and Discussion
We illustrate the results of applying two ETRs in the case of Argentina, a carbon
tax and a trade agreement on EGS, in order to find the conditions mentioned in the
literature for multiple dividends of an ETR: lower carbon emissions, GDP growth,
lower unemployment rates and more equity (welfare increase for poor households),
and trade increase without too much pressure on the external balance (real exports).
These are the indicators we will look at for simultaneous dividends of the ETR.
We present the results as radar (or spider) charts in order to easily identify multiple
dividends or possible trade-offs between the aforementioned indicators. The results
of all indicators are presented in percentage variation compared to the baseline,
except for unemployment, which is displayed in rates. The baseline scenario is thus
set at the zero point for all indicators, but for the unemployment rate, the baseline
level is 10%.
Carbon Tax and Its Potential Multiple Dividends
Let us start looking at Fig. 3, where the introduction of a carbon tax is unambiguously
effective to reduce carbon emissions (−5.83%) in an economy with full employment,
also leading to a slight increase in real exports (1.18%). However, costs in terms of
real GDP (−0.1%) and income distribution (−0.3%) arise because of this ETR.
According to these results, we can say that the reallocation of resources to relatively
less polluting sectors (composition effect) will be greater than a lower scale to account
for the reduction in carbon emissions. Nevertheless, this is not a realistic benchmark
for a developing economy like that of Argentina, which has a structural positive
unemployment rate (10% in the baseline). As previously discussed in the review
of the literature concerning the double and the third dividends of an ETR, with the
M. P. Ramos and O. O. Chisari
economy may not necessarily afford. Consequently, we leave aside this option of an
ETR in Argentina.
The literature highlights the possibility that multiple dividends may emerge as a
consequence of an ETR that depends on factors market conditions. Looking for those
multiple dividends, we will evaluate the sensitivity of the results of these scenarios
to:
1. Different conditions for the labour market: full employment, unemployment due
to real constant wages and unemployment due to nominal constant wages.
2. Different degrees of national and international capital mobility: low vs. high
inter-sectoral capital mobility.
3. The possibility of implementing a more ecological production technology
(modelling of latent technology) through the imports of capital goods and FDI
in the EGS market opening scenario.
Multiple Dividends: Results and Discussion
We illustrate the results of applying two ETRs in the case of Argentina, a carbon
tax and a trade agreement on EGS, in order to find the conditions mentioned in the
literature for multiple dividends of an ETR: lower carbon emissions, GDP growth,
lower unemployment rates and more equity (welfare increase for poor households),
and trade increase without too much pressure on the external balance (real exports).
These are the indicators we will look at for simultaneous dividends of the ETR.
We present the results as radar (or spider) charts in order to easily identify multiple
dividends or possible trade-offs between the aforementioned indicators. The results
of all indicators are presented in percentage variation compared to the baseline,
except for unemployment, which is displayed in rates. The baseline scenario is thus
set at the zero point for all indicators, but for the unemployment rate, the baseline
level is 10%.
Carbon Tax and Its Potential Multiple Dividends
Let us start looking at Fig. 3, where the introduction of a carbon tax is unambiguously
effective to reduce carbon emissions (−5.83%) in an economy with full employment,
also leading to a slight increase in real exports (1.18%). However, costs in terms of
real GDP (−0.1%) and income distribution (−0.3%) arise because of this ETR.
According to these results, we can say that the reallocation of resources to relatively
less polluting sectors (composition effect) will be greater than a lower scale to account
for the reduction in carbon emissions. Nevertheless, this is not a realistic benchmark
for a developing economy like that of Argentina, which has a structural positive
unemployment rate (10% in the baseline). As previously discussed in the review
of the literature concerning the double and the third dividends of an ETR, with the