Simulating the Effects of Energy Taxation on Energy Consumption in a Small Economy: A Computable General Equilibrium (CGE) Approach

This study examines the effects of energy taxes on energy consumption, economic production, and household welfare in small economies. Using a Computable General Equilibrium (CGE) model, it analyzes the impact of different energy tax rates on key economic indicators, including the welfare index, non-energy production, energy consumption, energy prices, factor prices, and household income. The results indicate that as tax rates increase, energy consumption declines, and non-energy production comes under pressure while energy prices and production factor costs rise significantly. Meanwhile, household income grows due to tax revenues; however, this growth is insufficient to offset the welfare loss caused by rising living costs. The findings suggest that although energy taxes can help reduce energy consumption and generate government revenue, their adverse effects on production and welfare require careful consideration. It is recommended that part of the tax revenue be allocated to supporting vulnerable groups and promoting energy-efficient technologies. This analysis provides a comprehensive perspective on the multifaceted impacts of energy taxes. It is a crucial tool for policymakers in designing strategies that minimize adverse effects while maximizing economic and environmental benefits

کلیدواژه ها:

Energy tax ، energy consumption ، economy ، household welfare ، Computable General Equilibrium (CGE)