The effect of energy tax on Taiwan's service sector and the possible energy-saving strategies

Chi Yuan Liang, Ruei He Jheng, Kyein Lwan Yang, Wen Hsiang Lin

Research output: Contribution to journalArticlepeer-review

Abstract

The main objective of the paper is to present an estimation of the impact of an energy tax and energy price increase on Taiwan's Service sector. The paper applies the producer's model of a dynamic general equilibrium model of Taiwan (DGEMT) to estimate the energy price elasticity of demand in the service sector for measuring the potential effect of energysaving with respect to energy price changes. We also analysis the impact of energy tax on service sector and provide energy saving strategies. The major findings are 1) The energy elasticity of the whole service sector is -0.988. It means that the potential energy consumption will decrease -0.988% when the energy price increases 1%. 2) Energy price rising can elevate incentive of energy-saving and accelerating industrial structure change. 3) The energy tax levied, with 2016 tax calculation, will cause oil, natural gas and electricity consumption of the whole service sector decrease 1.21%, 1.31% and 3.14%, respectively. 4) With 2025 tax calculation, the whole service sector's industrial prices increased 0.141% and the employment decrease about 3,389 people due to the energy tax.

Original languageEnglish
Pages (from-to)6683-6701
Number of pages19
JournalInternational Journal of Applied Business and Economic Research
Volume13
Issue number9
StatePublished - 2015

Keywords

  • Dynamic general equilibrium model of Taiwan
  • Elasticity of demand
  • Energy tax
  • Service sector

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