Analysis of Short-Term Price Increase Rates Following the Introduction of Environmental Taxes in the Textile Industry—Using Multiregional Input–Output Analysis—

Abstract

The textile industry has a significant environmental impact. This study utilized a multi-regional input–output table to examine the short-term price effects of a proposed environmental tax targeting carbon emissions and water usage. The carbon tax, set at 4,000 yen per ton of emissions as recommended by the Organisation for Economic Co-operation and Development in 2016, was designed to match revenue generated by the water usage tax. The analysis revealed that short-term price increases would remain below 5％ for both taxes, suggesting a limited impact on consumer demand. Our findings underscore the need for a comprehensive strategy to mitigate the environmental impact of the textile industry, combining environmental taxes with additional regulatory measures.