THE IMPACT OF A CARBON TAX OVER THE BRAZILIAN ECONOMY IN 2030 -IMACLIM: THE HYBRID CGE MODEL APPROACH

Abstract : This paper analyses the impact of a carbon tax over the Brazilian economy. To assess the consequences of this climate policy the model IMACLIM-S BR was developed by the authors using a hybrid input-output matrix with base year 2005. The model is also innovative due to the integration of bottom-up, expert information, into a CGE framework. This methodology can be an interesting option to assess climate change policies specially if compared to CGE models using CES-like functions because it can simulate very high carbon prices which means large departures from the reference case. Results from the model show that the way that the carbon tax revenues is used by the government strongly influences the growth of the economy as well as GHG emissions, unemployment rate and the total debt of the government.