Towards a low carbon growth in Mexico: is a double dividend possible? A dynamic general equilibrium assessment
article
This paper simulates the medium- and long-term impact of proposed and expected energy policy on the environment and on the Mexican economy. The analysis has been conducted with a Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy (Three-ME). This model is well suited for policy assessment purposes in the context of developing economies as it indicates the transitional effects of policy intervention. Three-ME estimates the carbon tax required to meet emissions reduction targets within the Mexican "Climate Change Law", and assesses alternative policy scenarios, each reflecting a different strategy for the recycling of tax revenues. With no compensation, the taxation policy would reduce CO2 emissions by more than 75% by 2050 with respect to Business as Usual (BAU), but at high economic costs. Under full redistribution of carbon tax revenues, a double dividend arises: the policy appears beneficial both in terms of GDP and CO2 emissions reduction.
TNO Identifier
537417
ISSN
03014215
Source
Energy Policy, 96, pp. 314-327.
Publisher
Elsevier
Collation
14 p.
Place of publication
Amsterdam
Pages
314-327
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