Construction of a Social Accounting Matrix (SAM) for Carbon Tax Modelling in Australia

Abstract

The objective of this study is to describe the construction of a Social Accounting Matrix (SAM) for Australia. This environmentally focused SAM appears to be one of the first for Australia. A SAM differs from an input-output table database in that it includes the important inter-industry matrix of the input-output table, but also adds details on the institutions in the economy. The institutions presented in this SAM are households, government, corporations and rest of the world (ROW). The particular policy change for which this SAM is designed is the imposition of a carbon tax. The production sectors of the economy are disaggregated into 35 sectors to be compatible with the estimates of carbon emissions in Australia. The SAM being described in this study further disaggregates the household sector into ten deciles in order to provide scope to analyse the distributive and redistributive aspects of a policy change. Furthermore, labour is disaggregated into nine employment groups which facilitate an in depth analysis of the impact of the tax on the different employment. The SAM developed here is being used in an environmentally extended CGE model to analyse macroeconomic and sectoral impacts of a carbon tax in Australia.