0 a tax on the use of fuels that produce gases that harm the atmosphere (= the mixture of gases around the earth)
1 a tax on the use of fossil fuels or on activities that cause carbon dioxide to be released, harming the environment:
The integrated model can assess the combined impact of a carbon tax and of investments in carbon-saving options.
Their effects will therefore be similar to the effects of an actual carbon tax.
In the case of global climate change, for example, a number of countries have introduced a carbon tax.
In the event where the households are compensated, private welfare can improve significantly under a carbon tax.
If public health improves as expected with a carbon tax, the expression is positive.
These results are similar to the ones derived in our study in the sensitivity analysis where all carbon tax revenue is redistributed to corporations.
With few sectors, substitution possibilities are inherently limited in response to a carbon tax, raising the costs of adjustment.
The above expressions show that the economic welfare of country 2 will be adversely affected by the carbon tax.
