This present paper analyzes an energy tax reform that exempts the energy-intensive export sector from paying the energy tax and uses the additional revenue to cut existing taxes in all sectors. To that end, a two sector two factor model of an open economy that is small on the import side but not...

The present paper applies a theoretical two-sector three-factor model to analyze a variety of energy tax reforms with the common feature of at least partly exempting the energy-intensive export sector from the tax. As a result, all scenarios with exemptions reduce energy less than the...