摘要：This paper analyses whether recycling revenues from carbon emission permit auctions can reduce
unemployment in the Spanish economy. Spain's deviation from EU's intermediate emission goals is
more serious than for most other EU countries, and the unemployment is also well above the EU
average. We use a CGE model that includes a matching model with two types of labour, and which
allows for different pricing rules and returns-to-scale assumptions. We find that abatement reduces
unemployment due to beneficial impacts of recycling the revenue from permit sales. Unemployment is
more effectively abated when revenues are used to reduce labour taxes rather than indirect taxes.
Contrary to other studies of Europe, we find that the best option is to reduce payroll taxes on skilled
labour. This reform is the most successful both in increasing demand and in dampening the supply
response to rising wages. All the recycling schemes also generate dividends in terms of welfare, but
none offset the abatement costs entirely
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