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Revista de Matemática Teoría y Aplicaciones

Print version ISSN 1409-2433


CASTRO-RAMIREZ, Juan C.; GUTIERREZ-ANDRADE, Miguel A.; OMANA-PULIDO, Elsa P.  and  DE-LOS-COBOS-SILVA, Sergio G.. A dynamic model for reducing pollution in Mexico. Rev. Mat [online]. 2019, vol.26, n.2, pp.339-369. ISSN 1409-2433.

The objective of this work is to evaluate the effectiveness of an environmental policy that promotes the substitution of fossil fuels for renewable alternatives, to reduce carbon dioxide emissions. A dynamic computable general equilibrium model is used for the Mexican economy simulating economic scenarios with two elasticities of substitution, when two of the energy goods that use fossil fuels are taxed together. The impacts on aggregate production and social well-being are quantified or measured. The analysis shows that the effectiveness of the policy depends on the elasticity of substitution. The rigid scenario is partially effective, since the demands of all the energies, fossils and renewable are reduced. The flexible scenario turns out to be effective, favoring the substitution between energies. The demand of all energies is further reduced in the rigid scenario than in the flexible. In each scenario, increasing the tax reduces GDP and social welfare in relation to the reference equilibrium.

Keywords : environmental policy; sustainable development; computable general equilibrium; energy; dynamic models.

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