Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238300 
Year of Publication: 
2021
Series/Report no.: 
IRENE Working Paper No. 21-05
Publisher: 
University of Neuchâtel, Institute of Economic Research (IRENE), Neuchâtel
Abstract: 
This paper is a quasi-replication of Andersson (2019). I use the synthetic control method to estimate the effect of a carbon tax starting at $1.41 per tonne of CO2 and increased through successive reforms to $20 by 2011. The results show that, one year after the intervention, the tax reduced CO2 emissions from transport by around 10% relative to the synthetic counterfactual, composed from the weighted average of OECD countries. Five years after the intervention, the effect increases to almost 20% and in 2005, the last year of the dataset, the estimated effect is of around 48%. After some robustness checks, the estimated effect is a 15% reduction in 2005. My results are consistent with Andersson (2019), who finds a 12.5% reduction at the end of his studied period. My paper contributes to the thin literature analyzing the the effect of a carbon tax ex post, providing new evidence of the effectiveness of these instruments.
Subjects: 
Solar systems
Carbon pricing
Emissions reduction
Environmental tax
Greenhouse gas emissions
Synthetic control method
JEL: 
H23
Q54
Q58
Document Type: 
Working Paper

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