Recycling carbon taxes for reindustrialisation: addressing structural rigidity and financialisation in natural resource exporting countries
Magacho, Guilherme and Godin, Antoine and Spinola, Danilo and Yilmaz, Devrin (2024) Recycling carbon taxes for reindustrialisation: addressing structural rigidity and financialisation in natural resource exporting countries. Working Paper. Agence Française de Développement, Paris, France.
|
Text
Recycling carbon taxes for reindustrialisation.pdf - Published Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (989kB) |
Abstract
Inclusion of developing and emerging countries in the low carbon transition agenda is imperative to meet climate goals, and policies should be tailored to their unique characteristics. Despite their significance, the structural specifics of these countries are frequently overlooked in lowcarbon transition models. In an effort to establish an appropriate framework for such analyses, this article formulates a Structural StockFlow Consistent (Structural SFC)model designed for open developing economies. This model categorizes production into three sectors: resource based exports, non-tradable goods and services, and other tradable sectors. While SFC models play a crucial role in emphasizing financial constraints, they frequently lack a multi-sectoral viewpoint and disregard structural specificities. Our model makes a dual contribution: (1) it offers a flexible framework capable of accommodating diverse country characteristics while balancing short-term demand with long term structural strategies, and (2) it underscores the inadequacy of relying solely on carbon pricing for economies deeply rooted in carbon-intensive sectors. By incorporating structurally distinct sectors within a genuinely monetary framework, the model enables us to comprehend the decisive role played by financial constraints arising from structural rigidities in shaping the dynamics of the low-carbon transition. Our findings show that the efficacy of carbon pricing is contingent on a country’s commercial, financial, and productionstructure. Inclusion of developing and emerging countries in the low carbon transition agenda is imperative to meet climate goals, and policies should be tailored to their unique characteristics. Despite their significance, the structural specifics of these countries are frequently overlooked in lowcarbon transition models. In an effort to establish an appropriate framework for such analyses, this article formulates a Structural StockFlow Consistent (Structural SFC)model designed for open developing economies. This model categorizes production into three sectors: resource based exports, non-tradable goods and services, and other tradable sectors. While SFC models play a crucial role in emphasizing financial constraints, they frequently lack a multi-sectoral viewpoint and disregard structural specificities. Our model makes a dual contribution: (1) it offers a flexible framework capable of accommodating diverse country characteristics while balancing short-term demand with long term structural strategies, and (2) it underscores the inadequacy of relying solely on carbon pricing for economies deeply rooted in carbon-intensive sectors. By incorporating structurally distinct sectors within a genuinely monetary framework, the model enables us to comprehend the decisive role played by financial constraints arising from structural rigidities in shaping the dynamics of the low-carbon transition. Our findings show that the efficacy of carbon pricing is contingent on a country’s commercial, financial, and productionstructure.
| Item Type: | Monograph (Working Paper) | ||||
|---|---|---|---|---|---|
| Dates: |
|
||||
| Uncontrolled Keywords: | Low-carbon transition, Stock-Flow Consistent Model, Developing and emerging countries, Structural Change, Industrialisation | ||||
| Subjects: | CAH17 - business and management > CAH17-01 - business and management > CAH17-01-02 - business studies | ||||
| Divisions: | Faculty of Business, Law and Social Sciences > Birmingham City Business School | ||||
| Depositing User: | Gemma Tonks | ||||
| Date Deposited: | 30 Apr 2024 13:05 | ||||
| Last Modified: | 07 May 2024 12:27 | ||||
| URI: | https://www.open-access.bcu.ac.uk/id/eprint/15459 |
Actions (login required)
 |
View Item |
Tools
Tools