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Climate change mitigation policies have begun to be discussed in Latin American and Caribbean (LAC) countries in recent years. However, the economic effects of such policies—i.e., winners and losers—may vary significantly across countries. This paper attempts to shed light on some of these differences for a set of five LAC countries that may in the future adopt or be forced to accept some form of carbon mitigation policy. To this end a single-country CGE model is used to simulate a set of domestic carbon taxes that the countries could adopt or face. The results show that the costs of reducing 1 percent of emissions are in a range of 0.18 to 0.32 percent of GDP. Although in all instances the primary objective of reducing emissions is achieved, the sectors that win/lose vary, making this type of analysis relevant for countries to use before adopting a given policy. There is evidence, however, that those costs could become benefits when carbon taxes are compensated with reductions in general taxes.
This paper aims to provide an overview of the current state of taxation in the Latin America and Caribbean (LAC) region, and its main reform needs and options. It previews the findings of recent studies prepared or commissioned by the Inter-American Development Bank (IDB) for its forthcoming flagship publication More than Revenue: Taxation as a Development Tool in the -Development in the Americas- ... (View publication)
This paper address options for restructuring the revenue system of Bolivia’s subnational governments, particularly prefectures, emphasizing reduction of dependence on natural resources and strengthening of subnational tax autonomy. The paper additionally identifies tax instruments or tax bases that could be assigned exclusively to regional governments or shared with the central government, assessi ... (View publication)
This paper constructs a small CGE model to study the impact of carbon taxes on GDP and emissions under alternative closure rules and hypotheses (about mobility of factors, availability of alternative technologies and labor market disequilibrium). The model is simulated for Argentina, Brazil, Chile, El Salvador, Jamaica and Peru. The paper evaluates the costs of lowering emissions under different ... (View publication)
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