Simulating green tax effects on pollution reduction, mortality and morbidity costs in Iran

Abstract

The direct association between air pollution and morbidity and mortality rates has been proved. This major environmental risk factor has been mainly due to extensive use of fossil fuels. Increasing pollution caused by fossil fuels can threaten human health. This study simulated the effect of green taxes on Iran’s health indicators, i.e., mortality and morbidity. We used a Computable General Equilibrium (CGE) model calibrated by Iran’s Social Accounting Matrix (SAM). The results show that when any pollution tax rate is levied on energy products, all eight types of environmental pollutions would be reduced. Almost two thirds of health costs (62%) are related to mortality, one fourth to morbidity (26.4%), and the rest to non-health effects (11.6%). Finally, we found an inverse correlation between green taxes and health costs.

Keywords

• simulation
• green tax
• environmental pollutants
• mortality
• morbidity
• cge