Policies to reduce Greenhouse Gas Emissions induce changes of economy and labor demand. This study develops an evaluation model and constructs new input data in order to analyze the employment and economic impacts of carbon taxes on Small and Medium Enterprises(SMEs) in South Korea. We use a recursive Computable General Equilibrium(CGE) model, and the newly constructed input data provides the three types of labor(high skilled, medium skilled, and low skilled) and the 2010 Korean input output table divided by the size of firms (large firms and SMEs). These facilitate analysis of economic impacts on different labor types and firms by size.
We improve data reliability by using the updated version(v.9) of GTAP data and the benchmark 2010 Korean Input-Output table. For the further research, discordance between the import and export data in Korean I-O table and GTAP 9.0 trade data should be alleviated in order to increase the reliability of data more.
The scenario-based analysis is conducted; recycling carbon tax revenues to 1) increase a lump-sum of household income(CTAX_LS), 2) reduce labor tax of all employees(CTAX_LR), 3) reduce labor tax of employees only working for SMEs(CTAX_LR_S). Carbon price is assumed to be linearly incremented from $(1/6)*50 in 2015 up to $50 in 2020.
Economic indices show the different impacts according to scenarios. The total output is reduced in all scenarios. However, the scenario of transferring carbon tax revenues to household income shows the l ...(To see more, please click on the HTML Viewer above.)