Carbon Tax Essay
Recently, the carbon tax issue has been gaining increasing attention in Australia due to its function of reducing greenhouse gas as well as its extensive economic impacts on a range of industries, such as tourism and hospitality. The conceptual meaning of the carbon tax is “a levy applied to various operations that generate carbon dioxide” (Covey, 2009, p.329). Such a tax is introduced to achieve a desired national emission target (Covey, 2009).
The introduction of the carbon tax in Australia is derived from the serious environmental issue of climate change. According to The Economist (2011), Australia's emissions measured on a per capita basis are the largest of any developed …show more content…
2.2. Assessment model.
In order to assess the future economic impacts of the carbon tax, the CGE model (Computable General Equilibrium models) can be introduced. This model is widely used as a standard tool for the quantitative analysis of environmental policies, such as the carbon tax, in terms of their costs and benefits (Löschel, 2006). This is because the CGE model can “provide answers on the economic effects of changes of the introduction of new taxes or subsidies in a coherent and consistent way” (Amin, 2009, p.334). Based on the general equilibrium theory, CGE model is a standard tool to assess the future impacts of the carbon tax since any