Effects of Implementation of Green Tax on Environmental Pollutants’ Dispersion on Macroeconomic Variables: Application of Multi-Regional General Equilibrium Model

Document Type : Research Paper


Department of Agricultural Economics, Marvdasht Branch, Islamic Azad University, Marvdasht, Iran


The present paper aims to determine the effects of various scenarios of green tax burden on pollution dispersion and multiple macro-economic variables such as GDP along with welfare and inflation. In addition, the effects of technical progress on major pollutant industries such as coal, oil and gas were evaluated. For this purpose general multiregional equilibrium method (GTAP-E) was used. The results of the study indicated that under low tax rate scenario, GDP remained unchanged. Increase in the carbon tax rate would not followed by increase in GDP. Energy consumption and social welfare increased but inflation decreased. Furthermore, increase in efficiency along with advance technology caused reduction in dispersion of environmental pollutants along with GDP growth and consequent increase in government tax revenue.


Burniaux, Jean-Marc, Truong, Truong 2002, GTAP-E: An Energy-Environmental Version of the GTAP Model.
Boqiang, Lin, Zhijie Jia 2018, The energy, environmental and economic impacts of carbon tax rate and taxation industry: A CGE based study in China. Energy, 2018.06.167.
Borischer, M 1955, An Introduction to Calculable General Equilibrium Models (Text in Persian) Fatemeh Bozazan and Maryam Soleimani Movahed 2013, Tehran: Publishing Nayer Ney.
Dong, HJ, Dai, HC, Dong, L, Tsuyoshi Fujita, Geng, Y 2015, Pursuing air pollutant co-benefits of CO2 mitigation in China: a provincial leveled analysis. Applied Energy, 144: 165–174.
Pearson, K & M, Horridge 2005, Hands-on Computing With Run GTAP and WinGEM to Introduce GTAP and GEMPACK, GEMPACK Center: 58.
Fu, R 2011, Technical and economic analysis on the new emission standard of air pollutants for thermal power plants. Energy Technol. Econ, 23: 56-60.
Mousavi, SN, Mozaffari, Z, Motamed, MK,”The effect of higher fuel price on pollutants emission in Iran” Caspian J. Environ. Sci, 2018, Vol. 16, No. 1, pp. 1~11
He, YX, Zhang, SL, Yang, LY, Wang, YJ, Wang, J 2010, Economic analysis of coal price-electricity price adjustment in China based on the CGE model. Energy Policy (38), 6629–6637.
      https://www.gtap.agecon.purdue.edu/resources/res display.asp?Record ID = 923.
Lin, BQ, Jia, ZJ 2018, Impact of quota decline scheme of emission trading in China: A dynamic
Lin, BQ, and Li, AJ 2012, Impacts of removing fossil fuel subsidies on China: How large and how to
Liu, Y, Lu, YY 2015, The Economic impact of different carbon tax revenue recycling schemes in China: a model-based scenario analysis. Appl. Energy (141), 96–105.
Mahmoodi  2017, Oil price reduction impacts on the Iranian economy Zb. rad. Ekon. fak. Rij, 35: 353-374.
Mahmoodi, A 2015, “Global trade analysis project”. Islamic Azad University, Tehran, Iran.
mitigate? Energy, 44: 741-749.
Purdue University Purdue e-Pubs recursive CGE model. Energy, 149, 190-203. energy.
Technology Management Co. and the Tehran Stock Exchange.
Ziaee 2013, Construction and application of multiregional computable general equilibrium model of Iran. Thesis Submitted for Fulfil the Degree of Ph. D. (Agricultural Economics) January 2013.