Journal of Environmental Assessment Policy and Management · 2021 · 266 citations · 46 references
Social SciencesEconomicsEnvironmental PolicyEnergy EconomicsEnvironmental EconomicsTaxationCarbon Emissions ManagementCarbon MarketsCarbon Mitigation PlanningCarbon Neutrality PlanningCarbon PricingClimate FinanceCarbon Policy InstrumentsCarbon Tax ReformEnergy Price ShocksEnvironmental Tax RevenuesNet Zero Emissions PolicyNet-zero Emissions PathwaysTaxation Of Carbon EmissionsVector Autoregression
The study seeks to uncover how implementing a carbon tax can help Japan achieve its long‑term zero‑carbon goal. The authors use a structural vector autoregression on 2005‑2020 quarterly data, supported by a theoretical general equilibrium model, to assess the macroeconomic effects of a carbon tax in Japan. They find that a carbon‑tax‑induced rise in energy prices raises interest rates, exchange rates, and CPI, depresses real GDP, and suggest policy reforms, revenue refunds, and a 2050 net‑zero strategy for Japan’s power sector.
This study tries to find new insights of implementations of carbon tax policy as a suitable way to reach the long-term zero-carbon plan. This paper explores how carbon tax can affect the macroeconomy in Japan through the structural vector autoregression (S-VAR) technique conducted for the quarterly data throughout 2005–2020. A theoretical general equilibrium model backs the empirical analysis. The major findings reveal that any increase in energy price from the carbon tax will lead to an increase in interest rate, exchange rate, and consumer price index while there is a negative relationship between energy price increase from carbon tax and real gross domestic product (GDP) in Japan. Carbon Policy Refolution ([Formula: see text]), refunding carbon tax revenues, and adaptation of long-term policy of net zero GHG emissions by 2050 with the current situation of Japan’s power sectors are the major practical policies of this study.
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