Input-output analysis of alternative policies implemented on the energy activities:: An application for Catalonia

The aim of this paper is to analyze the economic impact of alternative policies implemented on the energy activities of the Catalan production system. Specifically, we analyze the effects of a tax on intermediate energy uses, a reduction in intermediate energy demand, and a tax on intermediate uses combined with a reduction in intermediate energy demand. The methodology involves two versions of the input-output price model: a competitive price formulation and a mark-up price formulation. The input-output price framework will make it possible to evaluate how the alternative measures modify production prices, consumption prices, private real income, and intermediate energy uses. The empirical application is for the Catalan economy and uses economic data for the year 2001. The combination of a tax on energy uses and an improvement in the energy efficiency of the production system is a measure that accomplishes both economic and environmental goals, since it has no effects on prices, it has a positive effect on private real income and, finally, energy consumption is considerably reduced. (C) 2008 Elsevier Ltd. All rights reserved.