S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
School of Business, Örebro University Working Papers, School of Business, Örebro University

No 2012:9:
Effects from consistent internalization of external effects from transport and manufacturing – a CGE analysis for Sweden

Xing Liu () and Lars Bohlin ()

Abstract: This paper uses a static, small open-economy computable General Equilibrium (CGE) model of the Swedish economy to study the effects of consistent internalization of external effects from transport and manufacturing. We look at eight policy scenarios: first a fully implemented Social Marginal Cost Pricing (SMCP) in manufacturing, sea and air transport, road transport, and rail transport; and then SMCP in these sectors separately or in various combinations. We evaluate effects on, among others, national and global emission reductions, GDP, government budget, and social welfare. The results show that the fully implemented SMCP in all sectors generates the highest social welfare surplus, largest emission reduction and largest government net revenue. When this option is not feasible, society still could benefit from correcting prices in or more sectors. Correcting prices only for rail transport generates very small social welfare surplus, emission reduction and government revenue; while correcting prices only for road transport generates much larger effects in all aspects. Taking into consideration that sea and air modes are regulated not only by domestic legislation, the findings from this study suggest that the second-best policy scenario could be to correct prices for the rail, road and manufacturing sectors.

Keywords: social marginal cost; externalities; transport taxation; CO2 taxation; general equilibrium; (follow links to similar papers)

JEL-Codes: C68; H23; R48; (follow links to similar papers)

17 pages, May 22, 2012

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

wp-9-2012.pdf    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Forskningsadministratör ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:oruesi:2012_009 This page was generated on 2016-05-04 15:37:26