The Estimation of Optimum Green Tax on Emission of CO2 by Cement Industry in Iran

Environmental crisis is one of the governments challenges in the recent century. Governments and policymakers through plans and policies attempt to overcome challenges in environment area until to decrease man destructive effects on environment. Controlling economics methods is one of the tools of environmental degradation reduction. The aim of this study was to estimate suitable green tax on carbon dioxide emission (carbon tax) in cement industry. Translog cost function, estimated for cement industry to assess suitable Green Tax. Cost function equations and costs share were estimated with ISUR systematic method. The Results show all variables were significant in model parameters estimation, beside the interaction variable of wage cost with maintaining cost. The cost function determination coefficient show that 79% of total cost variation of cement production determined by dependent variables in equation. Also according to results, green tax rate on CO2 emission in cement industry determined was 15 percent. It is suggested environmental protection organization use green tax as an economics tool to control and decrease environmental pollutions with examination of country infrastructure and present conditions.