A Carbon Wealth Tax
Modelling, Empirics, and Policy
Bibliographic Data
| ID | 22123048 |
|---|---|
| Authors | José Pedro Bastos Neves (0000-0002-0275-9788, Brazilian Ministry of Finance, Brasília , Brasília , Brazil), Willi Semmler (0000-0002-8384-8159, New School) |
| Year | 2025 |
| Volume | 245 |
| Issue | 6 |
| Pages | 643-672 |
| Publication date | 2025-12-17 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Jahrbucher fur Nationalokonomie und Statistik (JOURNAL) |
| Journal identifiers | ISSN: 2366-049X • E-ISSN: 0021-4027 |
| Publisher | Walter de Gruyter GmbH (PUBLISHER • DE) |
| DOI | 10.1515/jbnst-2024-0078 |
| OpenAlex | W4410611734 |
| Language | EN |
| References cited | 66 |
Although economists widely advocate carbon pricing as an effective solution to reduce carbon emissions, this mechanism has had so far limited effects. This paper proposes a new type of tax to help finance (and accelerate) the green transition. A carbon wealth tax (CWT) is proposed to be levied on carbon-intensive (brown) wealth rather than primarily on carbon-intensive goods. We consider tax implementation issues such as tax base, incidence, and efficiency. Moreover, we analyze the impacts of such a tax scheme by setting up a model of asset pricing and dynamic portfolio decisions. Green and carbon-intensive returns used in the model are calibrated with low-frequency returns on stock prices between 2010 and 2021. We find that such a tax and subsidy scheme is a feasible and effective instrument in speeding up the transition to a greener economy, particularly in protracted periods of economic contraction. Our approach also brings a new perspective to the wealth inequality discussions
Carbon tax · Economics · Greenhouse gas · Macroeconomics · Monetary economics · Public economics · Climate Change Policy and Economics · Energy, Environment, and Transportation Policies · Fiscal Policy and Economic Growth · Geology · Oceanography
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| Citation velocity | historical |
|---|---|
| Highly cited | No |