Carbon tax effects on the poor: a SAM-based approach | Zendy

Joana Chapa | Zendy; Araceli Ortega Díaz | Zendy

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Carbon tax effects on the poor: a SAM-based approach

Author(s) -

Joana Chapa,

Araceli Ortega Díaz

Publication year - 2017

Publication title -

environmental research letters

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 2.37

H-Index - 124

ISSN - 1748-9326

DOI - 10.1088/1748-9326/aa80ed

Subject(s) - social accounting matrix , carbon tax , economics , welfare , tax reform , order (exchange) , poverty , greenhouse gas , carbon fibers , natural resource economics , public economics , macroeconomics , economic growth , market economy , computable general equilibrium , ecology , materials science , finance , composite material , biology , composite number

A SAM-based price model for Mexico is developed in order to assess the effects of the carbon tax, which was part of the fiscal reform approved in 2014. The model is formulated based on a social accounting matrix (SAM) that distinguishes households by the official poverty condition and geographical area. The main results are that the sector that includes coke, refined petroleum and nuclear fuel shows the highest price increase due to the direct impact of the carbon tax; in addition, air transport and inland transport are the most affected sectors, in an indirect manner, because both employ inputs from the former sector. Also, it is found that welfare diminishes more in the rural strata than in the urban one. In the urban area, the carbon tax is regressive: the negative impact of carbon tax on family welfare is greater on the poorest families.

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