Price Effects of Carbon Dioxide Taxation on Cost-of-Living Index - Structural Path Analysis Approach

Environmental crises caused by the combustion of energy carriers require efficient economic policies, and carbon dioxide taxation is one of the policies that policymakers have always feared about its distributional effects. therefore, the main purpose of this study is to study the distributive effect of carbon taxation in Iran. The study was conducted using the SAM-based multiplier approach in the first stage and then the structural path analysis in the framework of SAM-based. In the experimental part, in order to operationalize the model, the social accounting matrix of 2011 of the Parliamentary Research Center and the tax rate of eighty thousand Rials per ton have been used as a statistical basis. The results show that among the economic sectors, electricity pays the highest taxes due to high consumption of petroleum products, and households are directly and indirectly affected by the tax situation. They contribute directly to the tax in proportion to the consumption of fossil fuels directly, as well as to the consumption of goods produced indirectly from fossil fuels. The results showed that high-income households in rural and urban areas, and urban households will bear more tax burden and the cost-of-living index of households will increase by 2.8% with the above tax. The results showed, the service, agriculture and food sectors indirectly play an important role in the cost-of-living index of households. In examining the structural path analysis, to the household cost of living index, the direct paths of polluting sectors are more important than the indirect paths.