The Effect of a Carbon Tax on the Economy, Welfare and Emissions in Morocco: A Computable General Equilibrium Approach

Mohamed Adib Ed-daoudi, Kenza Oubejja

Abstract: In this paper, we are interested in the issue of using a carbon tax as a policy to address the increasing CO2 emissions in the case of Morocco. To do so, we used a computable general equilibrium model of the PEP (1-1) type with 2018 data, and we simulated two scenarios, the first with a tax of 50 MAD/ton of CO2 and the second with a tax of 75 MAD/ton of CO2. The second scenario yields a larger decrease in carbon emissions than the first; however the decreases in GDP and welfare are significantly larger. Overall, both rates are effective, and it remains for policy makers to choose the best scenario according to their priorities.

Keywords: Carbon tax, emissions, GDP, welfare, computable general equilibrium model