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Systems analysis of the impact of environmental tax on competitiveness in international market

We attempt to evaluate the impact of environmental tax on competitiveness. For this purpose, we use an international input-output table as the economic system and make an environmental tax model. To make the model, we use a primal problem and its dual in terms of linear programming. To evaluate the direct and indirect effects, we make a model which is based on input-output analysis. In particular we try to adopt price-competitiveness as the indicator of competitiveness, because competitiveness can be strongly influenced by the price-up and it can be measured quantitatively. In an actual international market, competitiveness is also influenced by wages and exchange rates. However it is difficult to measure the changes in wages and exchange rates because of the existence of the tax. Therefore we assume that wages and exchange rates are constant. We show a numerical example consisting of available data and we evaluate the change of competitiveness between Japan and some major countries.