Title: The economic consequences of effective carbon taxes
Authors: Felix Kapfhammer - BI Norwegian Business School (Norway) [presenting]
Abstract: The sectoral and macroeconomic consequences of carbon taxes are studied. In contrast to the previous literature, we develop a new monthly measure of effective carbon tax rates, which accounts for the time-varying emission coverage of taxes that are both explicitly and implicitly levied on greenhouse gas-emitting goods. Employing the new measure for four Nordic countries, we find that effective carbon taxes reduce emissions as expected, but they also decrease sectoral and macroeconomic activity - though there is some heterogeneity in the effects within and across the Nordics.