Taylor, M. ScottYamazaki, Akio2019-04-262019-04-262019-04-24Yamazaki, A. (2019). Three Essays in Economic Analyses of Carbon Taxes (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca.http://hdl.handle.net/1880/110221This thesis is a collection of three essays investigating the economic impacts of carbon taxes. In all three essays, I examined British Columbia's revenue-neutral carbon tax implemented in 2008. Chapter 1 focuses on the employment effect of the policy. I find that while all industries appear to benefit from recycling of tax revenues, the most carbon-intensive and trade-sensitive industries see employment fall with the tax, while clean service industries see employment rise. This demonstrates that the policy induces “job-shifts" among industries. I further find the carbon tax generated a small but statistically significant annual increase in employment over the 2007-2013 period. This chapter provides initial evidence showing how a revenue-neutral carbon tax may not adversely affect employment. As Chapter 1 relies on industry-level data, there are a limited number of control units to construct the counterfactual for the treated (taxed) units. To address this issue, Chapter 2, joint with Deven Azevedo and Hendrik Wolff, revisits Chapter 1 by developing a new approach to implement the synthetic control method using confidential firm-level data. We find that aggregate employment was unaffected by the policy. However, we find that the employment effects vary across sectors. Specifically, small service firms see their employment increase, while employment at large manufacturing firms decreases. These results provide further evidence for the “job-shifting hypothesis," especially from energy-intensive and trade-exposed sectors to local small businesses. Chapter 3 investigates how carbon taxes affect manufacturing productivity. I develop a new hypothesis, the “Productivity Dividend Hypothesis," to show that carbon taxes can positively affect productivity by recycling tax revenues to reduce corporate income taxes (CIT). This particular revenue-recycling increases investment and could raise productivity more than carbon taxes lower productivity by diverting resources away from production. I evaluate this hypothesis using detailed confidential plant-level data. I find that the carbon tax lowers productivity, although this is offset to some extent by the revenue-recycling. For some plants, the policy generates a net gain in productivity. A key finding is that recycling tax revenues through the reduction of the CIT was important for alleviating the adverse effects of the carbon tax.engUniversity of Calgary graduate students retain copyright ownership and moral rights for their thesis. You may use this material in any way that is permitted by the Copyright Act or through licensing that has been assigned to the document. For uses that are not allowable under copyright legislation or licensing, you are required to seek permission.Carbon taxesPublic policiesEnvironmental economicsEconomicsdoctoral thesis10.11575/PRISM/36406