Evaluation of the economic and budgetary impact of greenhouse gas emissions limits in Portugal

The purpose of this research is to quantify the economic and budgetary impact of greenhouse gas emission limits in Portugal. Carbon dioxide limits clearly affect economic performance and imply a shadow price for carbon associated with a given carbon constraint. This will of course depend, in part, upon the actual required and technically feasible level of abatement. As such, it is important to establish the costs associated with various abatement levels and thereby generate the marginal abatement cost function for carbon dioxide in Portugal. This research will be instrumental in establishing the cost effective tax rate and describing the equilibrium permit price in a competitive emissions market. In addition to assessing the increase in factor market distortions associated with the interaction between tax parameters, this research will assess various revenue recycling options capable of minimizing the costs of greenhouse gas emissions limits. The results of the study will be published in a book assessing the economic and budgetary impact of carbon emissions limits in Portugal. Furthermore, six papers will be submitted to refereed journals for publication: (1) The Estimation of Own Price and Cross Price Elasticity of Substitution parameters between Energy Vectors; (2) the Aggregate Marginal Abatement Cost Function for Portugal; (3) the Sectoral Marginal Abatement Cost Curves and the Incidence of Carbon Emissions Reductions in Portugal; (4) the Economic and Budgetary Impact of Carbon Taxation in Portugal; (5) the Economic and Budgetary Impact of Carbon Markets in Portugal; (6) The Assessment of Least Cost Revenue Recycling Options to Reduce Emissions in Portugal.