A Multi-sectoral, Multi-household, General Equilibrium Model to Assess the Impact of Carbon Price on the Australian Economy

By Disna Sajeewani, Mahinda Siriwardana, Judith McNeill and Xianming Meng.

Published by The International Journal of Climate Change: Impacts and Responses

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Article: Print $US10.00
Article: Electronic $US5.00

This paper analyses the macro-economic, sectoral and household effects of a $A23per tonne carbon price to achieve carbon dioxide (CO2-e) emissions reduction targets in the Australian economy by employing a static computable general equilibrium (titled as A3E-G) model. The A3E-G model developed for this study is capable of handling endogenous substitution among energy inputs and alternative allocation of resources among energy and capital. The A3E-G model incorporates an explicit tax system that evaluates carbon price impact on the economy under both short-run and long-run closures. The model has been calibrated using an environmentally-extended social accounting matrix (ESAM) which is disaggregated show detailed picture of carbon emissions by sectors, energy sources, electricity generating sectors, household income groups and various occupations.

Keywords: Australia, Computable General Equilibrium Model, Carbon Price

The International Journal of Climate Change: Impacts and Responses, Volume 4, Issue 4, pp.83-96. Article: Print (Spiral Bound). Article: Electronic (PDF File; 551.149KB).

Dr Disna Sajeewani

Post Graduate Student, School of Business, Economics and Public Policy, University of New England, Armidal, NSW, Australia

I'm currently doing my PhD and my area of interest is on climate change issues. I will be submitting my research study in May 2012. I have obtained my bachelor’s degree in agricultural economics from Sri Lanka (1997-2002) and obtained my master’s degree in Economics from Australia (2006-07). I work as an agricultural economist attached to the Department of Agriculture, Sri Lanka. Currently I have gained expertise with regard to constructing social accounting databases and developing CGE models in the area of environmental policy analysis.

Prof. Mahinda Siriwardana

Professor in Economics, School of Business, Economics and Public Policy, University of New England, Armidale, NSW, Australia

Dr. Judith McNeill

Program Leader, Institute, for Rural Futures, University of New England, Armidale, NSW, Australia

Dr. Xianming Meng

Senior Project Officer, Institute for Rural Futures, University of New England, Armidale, NSW, Australia


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