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The Impacts Of Climate Change Policies On The Transportation Sector

Faculty of Engineering University of Malaya

This study examines the impact of carbon tax and its alternative, energy tax, on both the Malaysian economy and the transport sector, using a CGE (Computable General Equilibrium) framework. In order to achieve government revenue neutrality, two schemes for revenue recycling, namely lump-sum transfer and labour tax recycling, are employed. The simulation's results show that the carbon tax policy is more effective than the energy tax policy in reducing carbon emissions; because it is less expensive. The negative impact of the carbon tax, on real GDP (Gross Domestic Product) and investment, is less than the energy tax in both recycling …