Macroeconomic Simulation of a Global Carbon Tax Shock II
Kemar Whyte
Leading Economist on Carbon Tax Modelling
The world is only getting hotter and we need to understand the potential ramifications of these climate change policies. Previously, Kemar outlined two carbon shock scenarios and their anticipated effects. In this video, he will explore in depth the results of the model simulation.
The world is only getting hotter and we need to understand the potential ramifications of these climate change policies. Previously, Kemar outlined two carbon shock scenarios and their anticipated effects. In this video, he will explore in depth the results of the model simulation.
The National Institute of Economic and Social Research explores the results of the model simulation
Key learning objectives:
Understand the results of the model simulation
Identify how a carbon tax would affect price and emissions
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What are the results of the simulation?
This video explores the impact of a sudden and uniform $100 carbon tax applied across all economies. The effective oil price would rise by approximately 70% on impact, more than 300% for coal and 60% for gas.
The rise in carbon tax is accompanied by a temporary rise in global credit constraints, to capture the heightened uncertainty triggered by the sudden shift in asset valuations. The shock triggers a shift in the energy mix and decline in CO2 emissions. It raises production costs, reduces the available energy input into production, generates fiscal revenue and impacts a country’s terms of trade.
Now free to watch
This video is now available for free. It is also part of a premium, accredited video course. Speak to an expert today to watch more.
Kemar Whyte
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