Modified Ramsey Rule, Optimal Carbon  Tax and Economic Growth

This study is designed to investigate the anticipated impact of carbon tax on economic growth in Nigeria using the scenario of the proposed tax rate on the primary carbon emission-related activities. This study therefore employed ARDL bound test and Toda-Yamamoto causality tests to show the existence of long-run relationship between carbon tax and economic growth. The study therefore revealed that: carbon tax has positive impact on economic growth; governance has negative impact on economic growth: non-existence of causal relationship between carbon tax and economic growth in Nigeria. Hence, the study recommended among others, upward review of carbon tax and strict adherence to the regulation of tax rate on carbon emission be enforced, as well as consideration for application of tax rate on other non-primary emitters of carbon in Nigeria.

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PAJAK KARBON, KERUSAKAN KARBON, DAN PERTUMBUHAN EKONOMI DI LIMA BELAS NEGARA SELAMA 27 TAHUN

JMB : Jurnal Manajemen dan Bisnis ◽

10.31000/jmb.v7i2.1060 ◽

2018 ◽

Vol 7 (2) ◽

Author(s):

Riris Rotua Sitorus ◽

Tangguh Pratysto

Keyword(s):

Economic Growth ◽

Open Economy ◽

Carbon Tax ◽

Control Variable ◽

Generalized Least Squares ◽

Consumption Expenditure ◽

Carbon Production ◽

Working People ◽

Per Capita ◽

Generalized Least Squares Estimation

The purpose of this study is to analyze the effect of carbon tax and carbon damage on economic growth in 15 (fifteen) countries from 1990 to 2017. Based on the results of research by weather scientists who stated that there are 50-500 possibilities to limit global warming at 2 degrees Celsius above average global temperatures from pre-industrial times throughout the 21st century.Global warming is caused by cumulative carbon emissions which continue to increase from year to year, resulting in threats to the world's sustainable development. Therefore carbon production must be limited by imposing a tax on carbon so that economic growth can run normally and even increase.Researchers used the open economy model Y = (C, I, G, NX) namely final household consumption expenditure (C), foreign direct investment (I), government final consumption general expenditure (G), and import export per GDP (NX) for control variables. The researcher also used the Cobb-Douglas Y = (K, L) production function, namely gross capital formation (K) and the ratio of working people per population (L) to the control variable. The data used were panel data in 15 countries that applied Carbon Tax from 1990 to 2017. Researchers used GLS (Generalized Least Squares) estimation to analyze the effect of carbon tax and carbon destruction on economic growth.The result is a carbon tax can stimulate the growth of real gross domestic product per capita and carbon damage hinder economic growth.

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3. Extending the Ramsey Rule to an Uncertain Economic Growth

Pricing the Planet's Future ◽

10.1515/9781400845408.41 ◽

2012 ◽

pp. 41-58

Keyword(s):

Economic Growth ◽

Ramsey Rule

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Objections to a Carbon Tax

Paying for Pollution ◽

10.1093/oso/9780190694197.003.0009 ◽

2019 ◽

pp. 115-128

Author(s):

Gilbert E. Metcalf

Keyword(s):

Economic Growth ◽

Greenhouse Gas Emissions ◽

Greenhouse Gas ◽

Climate Policy ◽

Coal Mining ◽

Emission Reduction ◽

Carbon Tax ◽

Coal Miners ◽

Gas Emissions

This chapter addresses common objections to a carbon tax including whether the science is settled enough to put a price on greenhouse gas emissions, whether the tax will hurt economic growth, or whether the tax will kill jobs. It dispels a number of myths about climate policy and coal mining while making the case for providing transitional relief to coal miners and other groups particularly hard hit by the tax. It also discusses how the tax can be designed to ensure that long-term emission reduction goals are met.

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Extending the Ramsey Rule to an Uncertain Economic Growth

Pricing the Planet's Future ◽

10.23943/princeton/9780691148762.003.0003 ◽

2012 ◽

Author(s):

Christian Gollier

Keyword(s):

Economic Growth ◽

Discount Rate ◽

Individual Level ◽

Investment Projects ◽

The Future ◽

Precautionary Motive ◽

The Individual ◽

Ramsey Rule

This chapter considers the prospect of uncertainty in planning for the future. In fact, it is commonly accepted that individuals are ready to sacrifice more in the present for the future when this future becomes more uncertain. Keynes was the first to mention this idea by pointing out the precautionary motive for saving. What is desirable at the individual level is also desirable at the collective one. Thus the chapter argues that a society that wants to reinforce the incentive to invest for the future because of its uncertain nature should select a smaller discount rate to evaluate the set of all possible investment projects.

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The Climate Change Objection to Economic Growth

10.1093/oso/9780190462956.003.0011 ◽

2018 ◽

Author(s):

Bas van der Vossen ◽

Jason Brennan

Keyword(s):

Climate Change ◽

Economic Growth ◽

Carbon Tax ◽

Rich Country ◽

Global Poverty ◽

Poor Countries ◽

Dangerous Climate Change

This book argues for increased economic growth as a cure for poverty. This chapter responds to the objection that such growth is unacceptable because it leads to dangerous climate change. The authors agree that such growth will lead to climate change, that such climate change is dangerous, and endorse a carbon-tax scheme that allows sufficient growth to address global poverty. Two objections to this view are discussed. The first holds that growth should be stopped as much as possible. However, this ignores the fact that dangerous climate cannot be prevented, and the extent of suffering by the world’s poor because of a lack of growth. The second objection wants to reduce growth in rich societies, but not poor societies. But this overlooks the fact that different economies are intertwined, so that a reduction in growth in a rich country can often disproportionally harm poor countries.

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