Short-term and Long-term Evaluation of the Effects of Carbon Tax and Energy Subsidy Removal Policies on CO2 Emissions in Iran: A Computable General Equilibrium Approach.

The main purpose of this research is to investigate the effects of the policies of removing subsidies for energy carriers and applying carbon tax on the variables of economic performance on the one hand and the amount of energy consumption and, consequently, the amount of CO2 gas emissions in Iran on the other hand. For this purpose, Iran ORANI-G computable general equilibrium model has been used, which is used for the simulation and analysis of shocks and economic policies. In this research, 6 scenarios, including 2 scenarios of removing subsidies for energy carriers and 4 scenarios of applying carbon tax in the short and long term, have been investigated. The results indicate that in the scenario of removing the subsidy of energy carriers in the short term, although the GDP has decreased; But on the other hand, the amount of CO2 emission has decreased significantly; Although in the long term, it has faced a more declining trend. The increase of carbon tax in contrast to the removal of subsidies for energy carriers, in addition to having a lower short-term reduction effect on the GDP, has shown the noticeable effectiveness of this scenario on the reduction of carbon emissions in the short and long-term. With the simultaneous application of two carbon tax policies and the removal of subsidies for energy carriers, the emission of carbon dioxide has shown a much greater reduction than the separate application of these policies.