Climate Change Impact and Structural Reforms in Kiribati
0.8
0.4
energy sector would similarly be shouldered mostly by the richest, but this loss would be small due
to the lack of extractive activities in Kiribati.
Figure 3. Kiribati: Price Increases Due to a Carbon Tax of $25 per Ton
(In percent)
0
4
2
10
8
16
Gasoline
Electricity
LPG
Air Transit
Land Transit
Water Transit
Produce &
Meat
Hotels &
Restaurants
Services
Source: IMF staff estimates based on 2006 Household Income and Expenditure Survey and the IMF's Carbon Pricing
Assessment Tool.
Note: See Alonso and Kilpatrick (2022) for further detail.
Retail
Figure 4. Kiribati: Burden of Higher Prices by Quintile for a Carbon Tax
of $20 per Ton
(In percent of household initial consumption)
2.0
LPG
Electricity
Gasoline
Indirect
1.6
1.2
0.0
Q1 (poorest)
Q2
Note: See Alonso and Kilpatrick (2022) for further detail.
Q3
Source: IMF staff estimates based on 2006 Household Income and Expenditure Survey and the IMF's
Carbon Pricing Assessment Tool.
Q4
Q5 (richest)
20.
Resources raised by the carbon tax would be about 0.35 percent of GDP. These
resources could be partly used to protect the most vulnerable from the increase in prices. For
example, using proxy-means testing to target a uniform cash transfer to the poorest two quintiles
would cost only a fifth of the resources raised by the carbon tax and ensure that this group is no
worse off on average. This would leave the authorities with significant resources to finance
investments in education and health needed to achieve the 2030 Sustainable Development Goals
INTERNATIONAL MONETARY FUND 11
KIRIBATIView entire presentation