Investigating the Effect of the Green Tax on Iran’s Health Sector: A General Equilibrium Approach

Despite the positive aspects of energy consumption, their negative externalities, i.e., environmental pollutions, are considerable. Imposition of the green tax on products and services which are not environmentally friendly has been recommended as an efficient way for improving health indices. With regard to the fact that Iran is among the countries with a high energy consumption per capita; pollution can be considered as a kind of threat to the country. In this regard, the present study benefitted from a general equilibrium model, calibrated by Iran’s Social Accounting Matrix in 2011, to examine the effect of green taxes on Iran’s health sector. Based on the findings of the present study, green taxes reduced all kinds of environmental pollutions. Furthermore, 62% of health costs was spent on mortality, 26.4% on morbidity, and 11.6% on non-health effects.