Publication: Carbon Tax under the Clean Development Mechanism: A Unique Approach for Reducing Greenhouse Gas Emissions in Developing Countries
Abstract
This study examines the economic and environmental implications of a unique Clean Development Mechanism (CDM) scheme in which a non-Annex B country (Thailand) introduces a carbon tax and exports the resulting emission mitigation as certified emission reductions (CERs). A general equilibrium model for Thailand has been developed for analysing this carbon tax-cum-CDM (CT-CDM) policy. The study finds that, unlike a carbon tax policy, the CT-CDM policy could increase economic welfare in Thailand, depending on CER price and schemes of recycling carbon tax- and CER-revenue to the economy. The CT-CDM policy is found to increase economic welfare at a very low CER price (US$55/tCO2).
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