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Title: Effects of the Proposed Australian Carbon tax: A CGE Assessment
Contributor(s): Siriwardana, Mahinda (author); Meng, Xianming (author)orcid ; McNeill, Judith (author)
Publication Date: 2011
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Abstract: The Australian government has announced to price carbon at an initial price of $23 per tonne. Despite detailed modelling undertaken by the Commonwealth Treasury, there is widespread speculation about the possible economic impact of a carbon tax in Australia. In this paper we build a computable general equilibrium (CGE) model incorporating many new features to deal with the issue of emissions and model the impact of carbon taxes. The analysis undertaken by simulating the impact of a carbon tax of $23 a tonne reveals some interesting outcomes. For example, in the short run, Australia's real GDP may decline by 0.68 percent, consumer prices may rise by 0.75 percent, and the price of electricity may increase by about 26 percent as a result of the tax. Nevertheless it allows Australia to make a substantial cut in its CO₂ emissions. The simulation results imply an emission reduction of about 12 percent in its first year of operation. The tax burden is unequally distributed among different household groups with low-income households carrying a relatively higher burden.
Publication Type: Conference Publication
Conference Name: World Business and Economics Research Conference, Auckland, New Zealand, 12th - 13th December, 2011
Source of Publication: Proceedings of the World Business and Economics Research Conference, p. 1-19
Publisher: World Business Institute Australia
Place of Publication: Online
Field of Research (FOR): 140205 Environment and Resource Economics
Peer Reviewed: Yes
HERDC Category Description: E1 Refereed Scholarly Conference Publication
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School of Psychology and Behavioural Science

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