decarbonizing residential building energy a cost effective approach abstract given the problem of climate change the world economy must eventually switch to carbon neutral energy in this study we present a cost effectiveness approach given a goal of decarbonization the objective is to accomplish this at minimum cost for residential building energy we show that total cost is minimized by equating marginal cost of building energy conserved with marginal cost of obtaining carbon free energy where we express costs of both in dollars per kwh we describe how the cost of solar photovoltaic energy provides an upper bound on the marginal cost of carbon free energy and thus an upper bound on marginal cost of conserved energy one should not necessarily spend more on energy conservation than the cost of photovoltaic energy though there are several caveats a case study from vermont usa illustrates these principles and implementation issues with marginal analysis of energy conservation from a policy perspective the principles presented suggest that either carbon taxes or carbon limits could be used to decarbonize building energy at minimum cost but that approaches using renewable energy subsidies or prescriptive building codes result in greater decarbonization costs to society this suggests that new policy approaches be adopted

from shadow to green linking environmental fiscal reforms and the informal economy in the past few decades many papers have analysed in some depth different environmental tax reforms and the double dividend hypothesis i e the possibility of improving not only the environment but also the economy through the reduction of distortions in the tax system recently more stress has been placed on testing empirically what effects a reduction in labour taxes may have on unemployment when accompanied by a carbon or other environmental tax however such studies have not modelled the effects of the presence of a shadow economy even though informal markets account for a significant and growing part of gdp in many developed economies this paper analyses this link using an applied general equilibrium model for the case of spain which has one of the highest unemployment rates in the world and one of the biggest informal economies of any wealthy country we conclude that our analysis strengthens the case for an environmental tax reform in spain if revenues from a co2 tax are recycled via a labour tax reduction

expectations exchange rates and monetary theory the case of german hyperinflation abstract this paper tests some of the structural coefficient restrictions on goods price equations and foreign exchange rate equations implied by the monetary theory of exchange rates the data are from the german hyperinflation 1922 1923 the results of the tests broadly support the monetary theory of exchange rates and they also support the hypothesis that the foreign exchange market was efficient during this period however the much higher residual volatility in foreign exchange prices is not explained by the monetary theory

a uk carbon energy tax a carbon energy tax has been proposed by the european commission to start as us 3 per barrel oil equivalent in 1993 rising to us 10 in 2000 the effects of this tax on the uk economy can be assessed by using a large scale energy environment economy model in which energy demand is treated by means of aggregate equations for energy users and fuel share equations for electricity and each of the main fossil fuels the electricity supply industry is represented in the model by simulating the characteristics of each existing generating station and of a range of new station types and by allowing the model to choose the fuels used from relative fuel prices and prices of capital inputs this approach contrasts with the multimodel approach used in most studies of the effects of the tax the tax is introduced as a tax on imports and domestic output of fossil fuels in proportion to their carbon and energy content with the tax being passed on through the economic system depending on the use of the fuels thus the electricity industry is faced with higher prices for coal gas and fuel oil and chooses to burn the different fuels according to their relative prices four scenarios are developed which vary according to the way the tax revenues are recycled through reductions in vat or in income tax rates and whether the tax is introduced throughout the european community or throughout the oecd if the tax is european it is assumed that the energy intensive industries will be exempt the outcome is that the tax is sufficient to stabilize co2 emissions over the period 1990 2005 at 12 below base levels by the end of the period there is an overall saving of energy compared to base and a further switch to gas in electricity generation the effects on the macroeconomy are rather small and as the revenues are recycled rather than saved by the government gdp growth is likely to increase under the tax by some 0 2 above base this confirms other studies in which revenues are recycled but contradicts many results from studies in which revenue recycling is ignored or incomplete the effects on the energy intensive industries are expected to be small in all the scenarios but 14 of tax revenues are lost if the industries are exempt

a globally flexible almost ideal demand system the almost ideal demand system is combined with the fourier expenditure system subject to the assumption that preferences are of the price independent generalized logarithmic class the resulting demand system has the desirable features of each of its components aggregate demand equations are consistent with preferences of a representative consumer and consistent estimates of elasticities are obtained for all observed prices application of the new demand system to u s consumption of meats and fish reveals that it fits the data well and that the restriction to the usual specification is rejected

avoiding adverse employment effects from electricity taxation in norway what does it cost accepted author manuscripts post print this is the author s version of a work that was accepted for publication in energy policy changes resulting from the publishing process such as peer review editing corrections structural formatting and other quality control mechanism may not be reflected in this document changes may have been made to this work since it was submitted for publication a definitive version was subsequently published in energy policy vol 39 issue 9 september 2011 doi http dx doi org 10 1016 j enpol 2011 06 049

the impact of a carbon tax on the susquehanna river basin economy abstract this paper presents the first study of the economic impacts of a carbon tax on an environmentally delineated sub national area the study is based on a 32 sector computable general equilibrium model of the susquehanna river basin srb of the us a special feature of the analysis is that it incorporates changes in prices of traded goods facing the focal region as a result of the imposition of a tax imposed globally the results show that a tax of 16 96 per ton of carbon could have rather negligible negative impacts on the srb economy as a whole but that the negative impacts on its energy industries could be sizeable also several sensitivity tests on closure rules and key parameter values indicate that the results are rather robust

re analyzing the economic impact of a global bunker emissions charge abstract regulating bunker emissions continues to be a challenging task largely due to the lack of a globally coordinated scheme providing economic and political incentives to potential participating countries this paper analyses the economic costs and benefits of imposing a global carbon tax on international bunker emissions by employing a computable general equilibrium model approach under the assumption of an emissions reduction of 5 below 2000 levels by 2020 we demonstrate that a global bunker emissions charge on one hand reduces trade volume and change trade patterns between countries and regions while on the other hand accelerates the adoption of energy saving technologies and reallocates the supply of international transportation services throughout the world the net economic impact though negative on average is modest compared to the benefits obtained from the emissions reduction if revenues from a bunker emissions charge are properly distributed among countries and regions the losses to disadvantaged countries are likely to be offset by the benefits to advantaged countries this finding provides useful insights for policy makers a global bunker emissions charge could in future be an economically feasible strategy to reduce the increasing bunker emissions through the implementation requires more political effort and wisdom

consumer demand and the life cycle allocation of household expenditures the purpose of this paper is to estimate the parameters of household preferences that determine the allocation of goods within the period and over the life cycle using micro data in doing so the authors are able to identify important effects of demographics labor market status and other household characteristics on the intertemporal allocation of expenditure they test the validity of the life cycle model using excess sensitivity tests and find that controlling for demographics and labor market status variables can largely explain the excess sensitivity of consumption to anticipated changes in income

a macroeconomic evaluation of a carbon tax in overseas territories a cge model for reunion island reunion island similar to most insular regions is ruled by a carbon based economy that is heavily dependent on fossil fuels in recent years the energy transition towards a low carbon economy has become the watchword of this french overseas region with the objective of a 100 renewable energy mix by 2030 reducing fossil fuel use while maintaining economic growth is an important issue for all countries but is even more important for island territories with structural and geographical handicaps energy transition and drastic greenhouse gas emission reductions represent costs and opportunities that need to be quantified this research paper assesses the environmental and macroeconomic effects of the carbon price policy introduced in france to meet the target of the paris agreement the acceptability of the tax significantly depends on the possibility of recycling tax revenues different schemes for recycling tax revenues are considered in simulations the methodology used is a computable general equilibrium cge model for reunion island getrun nrj that takes into account all island specificities the results show that the carbon tax enables substitutions between fossil and renewable energy production and reduces co 2 emissions however the tax has negative effects on the aggregate economy the implemented tax revenue recycling compensation mechanisms mitigate the negative impacts but the results differ significantly as the recycling schemes do not support the same economic actors

the endogeneity of money during the german hyperinflation a reappraisal this paper provides evidence that casts doubt on the conclusioon of several studies of the german hyperinflation that since government raised most of its revenue from money creation the money supply process was endogenous this conclusion in the literature is based on the assumption that the money supply and the price level can be described by linear arima models it is shown here that the linearity assumption is violated by the data and that relaxing this assumption reverses the earlier results the paper provides additional evidence in support of the finding that the money supply process may be exogenous

expectations in the german hyperinflation reconsidered abstract data on forward foreign exchange rates during the german hyperinflation after world war i provide direct observations of expected changes in the spot rate although levels of these forward rates seem to be efficient predictors of the spot rate the predicted changes in the spot rate are biased downward substantially and do not meet the specific conditions of rationality indeed the bias in the forward rate predictions is similar to bias in adaptive expectations of the spot rate the behavior of the forward rate can be rationalized as a gradual market adaptation to a new regime of volatile and escalating inflation reasonably represented by adaptive expectations the strict definition of rational expectations needs to be broadened to allow for the difficulty of distinguishing between permanent and transitory shocks

how robust is the uniform emissions pricing rule to social equity concerns abstract this paper examines pollution tax differentiation across industries in light of social equity concerns using theoretical and numerical general equilibrium analyses in an optimal tax framework we characterize the drivers for non uniform optimal taxes stemming from the interaction of household heterogeneity with social preferences quantitatively assessing the case of price based co2 emissions control in the u s economy we find that uniform emissions pricing is approximately optimal when social concerns are defined over inequity induced by the environmental tax the deviation from uniform emissions pricing however becomes non negligible when pollution tax rebates deviate much from optimal transfer schemes or when social concerns are defined over both policy induced impacts and inequity unrelated to environmental policy our results are robust to a number of model extensions including the stringency of the environmental target downstream vs upstream taxation pre existing distortionary taxes and parametric uncertainty in firms and households equilibrium tax responses

what do we know about carbon taxes an inquiry into their impacts on competitiveness and distribution of income abstract the kyoto protocol to the united nations framework convention on climate change unfccc has set legally binding emissions targets for a basket of six greenhouse gases and timetables for industrialised countries it has also incorporated three international flexibility mechanisms however the articles defining the flexibility mechanisms carry wording that their use must be supplemental to domestic actions this has led to the open debates on interpretations of these supplementarity provisions such debates ended at the resumed sixth conference of the parties cop to the unfccc held in bonn july 2001 and at the subsequent cop 7 in marrakesh november 2001 the final wording in the bonn agreement reaffirmed in the marrakesh accords at least indicates that domestic policies will have an important role to play in meeting annex b countries emissions commitments carbon taxes have long been advocated because of their cost effectiveness in achieving a given emissions reduction in this paper the main economic impacts of carbon taxes are assessed based on a review of empirical studies on existing carbon energy taxes it is concluded that competitive losses and distributive impacts are generally not significant and definitely less than often perceived however given the ultimate objective of the framework convention future carbon taxes could have higher rates than those already imposed and thus the resulting economic impacts could be more acute in this context it has been shown that how to use the generated fiscal revenues will be of fundamental importance in determining the final economic impacts of carbon taxes finally we briefly discuss carbon taxes in combination with other domestic and international instruments

addressing the competitiveness effects of taxing carbon in china domestic tax cuts versus border tax adjustments abstract this study focuses on the international competitiveness effects of levying a carbon tax in china based on a computable general equilibrium model this study analysed the impacts of a carbon tax on different sectors from the aspect of changes in market shares of domestic producers in the domestic markets and changes in exports the effects of different measures including domestic tax cuts and border tax adjustments in alleviating the unfavourable competitiveness impacts were also analysed and compared as were the impacts of different tax schemes on the macro economy sectoral profits and carbon emissions the results show that without any complementary measures a carbon tax would negatively shock the domestic market shares and exports of almost all tradable sectors and the profits of almost all sectors as for cushioning the unfavourable effects the domestic tax cuts are able to ease the negative impacts on the domestic market shares and exports of almost all tradable sectors moreover the unfavourable impacts of domestic tax cuts on both the macro economy and the sectoral profits are obviously smaller than those of the other schemes regardless of the use of the same tax rate or emission reduction amount among the border tax adjustment measures the best performance in general corresponds to the measure purely implementing adjustments on exports

carbon footprint taxes we analyze whether a carbon consumption tax is logistically feasible we consider a carbon footprint tax cft which would be modeled after a credit method value added tax the basis for the tax would be a product s carbon footprint which includes all of the emissions released during production of the good and its inputs as well as any greenhouse gases latent in the product our analysis suggests that a pure cft requiring the calculation of the carbon footprint of every individual product may be prohibitively costly however a hybrid cft seems economically feasible the hybrid cft would give firms the option to either calculate the carbon footprint of their outputs and have their products taxed based on those footprints or use product class specific default carbon footprints as the tax basis thereby saving on calculation costs because the cft would be levied on all goods consumed domestically the cft would keep domestic firms on an even footing with those producing in countries without active climate policy protecting competitiveness and reducing leakage

rethinking the costs related to global warming a survey of the issues one approach to the economic analysis of global warming seeks to balance the costs of damage from or adaptation to it with the costs of mitigating it the costs of adaptation and damage have been estimated using techniques of environmental evaluation but are subject to a wide margin of uncertainty the costs of mitigation principally by reducing the emissions of co2 have been estimated using different kinds of economic models some of the results of which have suggested that very little abatement of carbon emissions is justified before the costs of abatement exceed the benefits of it in terms of foregone damage and adaptation costs the paper analyses the extent to which this conclusion is a function of the modelling assumptions and techniques used rather than likely practical outcomes with regard to the models treatment of unemployed resources revenue recycling prior distortions in the economy due to the tax system and possible dynamic effects from the introduction of a carbon energy tax it concludes that with different and arguably more appropriate treatment of the above issues especially when the secondary benefits of reducing co2 emissions are also taken into account it is not clear that even substantial reductions in the use of fossil fuels will incur net costs especially if there is the prospect of even moderate costs from global warming

nesting the aids and translog demand systems this paper shows that there exists a relatively simple demand model that is consistent with utility maximization and has nested within it both the almost ideal demand system and translog models this model is exactly aggregated then estimated using aggregate u s demand data the results are used to test the relative adequacy of the almost ideal demand system and translog models copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the effect of carbon tax on per capita co2 emissions new huadu business school 09zd050 national social science foundation of china 09zd050 08ajy022 research foundation of ministry of education of china 10jzd0018 fundamental research funds for the central universities 2010221051

the impact of carbon taxation on the uk economy abstract the paper explores the likely macroeconomic impact of imposing a carbon tax at levels sufficient to reduce co 2 emissions significantly many studies have indicated the probablity of such a tax entailing substantial economic costs however such studies have not tended to take into account the possible positive effects of using carbon tax revenues to reduce distortionary taxes elsewhere in the economy or to offset competitiveness effects or of the possibility that a carbon tax will stimulate innovation and efficiency in the energy sector with positive economic results the paper concludes that when these factors are given due weight imposing a carbon tax is more likely to entail economic benefit than cost

environmental and wider implications of political impediments to environmental tax reform abstract the most common notion of environmental tax reform etr is the use of the revenue from environmental taxes to reduce distortionary labour taxes the petras project 1 has shown that there are a number of social and political impediments to implementing such reform this paper firstly outlines some of the environmental and economic implications of environmental taxes generally it goes on to explore three broad approaches to etr based on the allocation of the tax revenues and explores the environmental and economic implications of each approach and the likelihood of political and social acceptance particular attention is paid to reducing regressive impacts and impacts on competitiveness it is concluded that some combination of earmarking a proportion of revenues to environmental projects and diverting rest to reduce labour taxes is probably the best approach in light of the results of the project the balance should depend upon local labour market and macroeconomic conditions the extent to which environmental projects are already funded and the extent of government failure i e the problems of resource allocation that occur as a result of government intervention in markets funding should only be provided to environmental projects if it can be shown that in themselves they are economically efficient in addition it is most important that a proportion of the funds be used to ameliorate any regressive impacts it is also important to bear in mind that hypothecation or recycling of revenue is not the same as a tax shift which is a reform of the entire system so some of these approaches may take away from the integrity of etr the paper concludes with some of the initiatives that are likely to be necessary to facilitate social and political acceptance of this approach to etr

how large are the impacts of carbon motivated border tax adjustments on china and how to mitigate them shandong social science planning fund program 12djjj12 independent innovation foundation of shandong university iifsdu 2012gn038 ministry of education research of social sciences youth funded projects 13yjc790065 national natural science foundation of china 71203186 71173170 china postdoctoral science foundation 2013m530309 2012t50802

competitiveness and exemptions from environmental taxes in europe a number of european countries have introduced a variety of environmental taxes a common characteristic of their implementation is the inclusion of exemptions and tax relief in particular for some sectors of manufacturing industry this paper analyses the pattern and motivation of exemptions as they have developed in western european countries making clear the difference between the nominal and effective tax rates once the exemptions have been taken into account the principal motivation for exemptions relates to concern about competitiveness while particular environmentally intensive sectors may have some grounds for concern even these might be able to achieve cost effective environmental improvements such that their competitive position is not over disadvantaged while for an economy structured like the uk s an environmental tax plus rebate scheme sometimes called an ecological tax reform would be likely to yield benefits in terms of competitiveness the exemptions usually run counter to the environmental economic logic of using environmental taxes to internalise social costs and give economic signals that are based on the full costs of production and they are likely to increase the costs of achieving a given level of emission reduction with little justification for them also on the grounds of competitiveness it would therefore be undesirable on both economic and environmental grounds for them to remain a feature of the implementation of environmental taxes in the future

carbon pricing and energy efficiency improvement why to miss the interaction for developing economies an illustrative cge based application to the pakistan case abstract carbon energy taxes and energy efficiency improvement are studied well in the recent years for their potential adverse impacts on economy especially for lost production and international competitiveness and rebound effects however little attention has been paid to investigate them jointly which can not only prevent fall of energy services cost and thereby rebound effect but reduce the associated macroeconomic costs this study thus employs a 20 sector cge model to explore separately the impacts of carbon tax and its coordinated implementation with energy efficiency improvement on the pakistan economy the country underwent enormous pressure of energy security issues as well as climate change fallouts in the last couple of years and can be regarded as a suitable candidate for energy environmental conservation policies to be considered at a broader context with more concrete efforts the simulation results show that the impact of carbon tax on gdp is negative but resulting reductions in pollutant emissions are relatively high moreover the gdp is expected to grow comparatively positive when analyzed with improvements in energy efficiency with even higher decline in energy consumption demand and so emissions this simultaneous economic and environmental improvement would thus have positive implications regarding sustainable development of the country

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

the economic and budgetary impact of climate policy in portugal carbon taxation in a dynamic general equilibrium model with endogenous public sector behavior the objective of this paper is to study hbox co 2 taxation in its dual role as a climate and fiscal policy instrument using a dynamic general equilibrium model of the portuguese economy which highlights the mechanisms of endogenous growth and incorporates a detailed modeling of public sector behavior and accounts in addition to the conventional marginal abatement cost curve we present a pair of complementary marginal abatement cost curves which highlight the impact hbox co 2 taxation has on economic performance and public debt and are therefore directly relevant to the terms of the policy debate these marginal abatement cost curves provide an effective tool for understanding the rate at which the environmental effectiveness economic costs and budgetary effects change with the tax level our results indicate that hbox co 2 taxes can be an important policy instrument for reducing emissions and promoting fiscal consolidation although this will come at a cost in terms of economic performance simulation results suggest that a tax of 17 00 euros per hbox tco 2 can satisfy existing climate policy targets the tax revenue effects together with reductions in public spending yield a 4 8 reduction in public debt these desirable outcomes come at the cost of a 1 3 reduction in gdp over the long term our analysis highlights that limiting public consumption expenditures can contribute to larger reductions in public debt albeit at a marginally greater cost to economic activity in turn reducing public investment although effective in reducing public debt produces a much larger negative economic impact this evokes an important trade off particularly pronounced in the present debates regarding austerity measures in the eu between fiscal consolidation efforts and efforts to promote convergence to eu standards of living these results further highlight that modeling assumptions with respect to public spending decision are not innocuous an exogenous trajectory for public spending suggests substantially smaller gdp effects and substantially larger public debt effects for any given emissions target

norwegian emissions of co 2 1987 1994 several countries have introduced taxes on fossil fuels with the aim of reducing atmospheric emissions partly because of local environmental goals so2 nox and partly to participate in a global effort to reduce emissions of greenhouse gases many macroeconomic studies based on both global and national models have been made of how emissions can be reduced with the help of taxes and the consequent reduction in gdp following the introduction of such taxes norway has had a co2 tax for five years thereby providing a unique opportunity to evaluate the effects of this tax on emissions the paper provides a counterfactual analysis of energy consumption and emissions if no co2 taxes had been introduced compared with the actual situation in which such taxes exist the effect of a co2 tax on oil consumption and thus co2 emissions is studied on the basis of partial economic models for various sectors of the norwegian economy the study indicates that the co2 tax has had an impact on co2 emissions in norway

carbon taxation in russia prospects for a double dividend and improved energy efficiency russia is not only one of the world s major sources of carbon based energy coal oil and gas but is also one the most intensive users of energy furthermore russia accounts for a disproportionately large share of global carbon dioxide emissions some 5 to 6 of global carbon dioxide emissions eia 2011a it has been estimated world bank 2008 that russia could reduce its use of primary energy use by 45 with consequent economic and environmental benefits high energy and carbon intensity of the russia economy is inter alia explained by low energy prices due to high export taxes as well as administrative regulation of domestic prices of gas and electricity and low environmental taxes carbon taxes are one such pigouvian tax and they would address concerns on several fronts simultaneously in the short to medium term they would inter alia lead to lower ghg emissions and encourage the diffusion of more energy efficient technologies in the longer term the increased cost of energy inputs is expected to induce technological progress in this analysis the macroeconomic and sectoral effects of carbon taxes on the russia economy are examined this analysis addresses the following objectives i to test the double dividend hypothesis under perfect and imperfect competition in output markets to analyse ii the incidence of carbon taxes iii impacts on sectoral competitiveness iv effects on income equity and v interactions of carbon taxes with other taxes a computable single country multi sector comparative static cge model is employed russland verfugt nicht nur uber einen der grosten vorrate an kohlenstoffbasierter energie wie kohle rohol und gas sondern ist auch einer der grosten energieverbraucher daruber hinaus ist russland fur einen uberproportional grosen anteil von kohlendioxid emission etwa 5 bis 6 der weltweiten kohlendioxidemission verantwortlich mit der einfuhrung einer kohlendioxidsteuer konnten gleichzeitig unterschiedliche wirkungen erzielt werden kurz und mittelfristig wurden kohlenstoffsteuern sowohl zu einer reduzierung von treibhausgasemissionen als auch zur einfuhrung von energieeffizienteren technologien fuhren langfristig wird erwartet dass hohe energiekosten den anreiz zur entwicklung und zur investition in energiesparenden technischen fortschritt erhohen die vorliegende arbeit analysiert und bewertet die makrookonomischen und sektoralen auswirkungen einer einfuhrung von kohlenstoffsteuern auf die russische wirtschaft die ziele der arbeit bestehen darin die hypothese der doppelten dividende fur den fall des vollkommenen und des unvollkommenen wettbewerbs auf gutermarkten zu uberprufen und die inzidenz einer kohlenstoffsteuer ihre auswirkungen auf die sektorale wettbewerbsfahigkeit ihre auswirkungen auf die einkommensverteilung und die interaktion von kohlenstoffsteuern mit anderen steuern zu analysieren und zu bewerten als methodischer ansatz wurde ein single country und multi sektor model gewahlt

negative rebound and disinvestment effects in response to an improvement in energy efficiency in the uk economy this paper uses a computable general equilibrium cge framework to investigate the conditions under which rebound effects may occur in response to increases in energy efficiency in the uk national economy previous work for the uk has suggested that rebound effects will occur even where key elasticities of substitution in production are set close to zero the research reported in this paper involves carrying out a systematic sensitivity analysis where relative price sensitivity is gradually introduced into the system focusing specifically on elasticities of substitution in production and trade parameters in order to determine conditions under which rebound effects become a likely outcome the main result is that while there is positive pressure for rebound effects even where direct and indirect demands for energy are very price inelastic this may be partially or wholly offset by negative income competitiveness and disinvestment effects which also occur in response to falling energy prices the occurrence of disinvestment effects is of particular interest these occur where falling energy prices reduce profitability in domestic energy supply sectors leading to a contraction in capital stock in these sectors which may in turn lead to rebound effects that are smaller in the long run than in the short run a result that runs contrary to the predictions of previous theoretical work in this area

economic and welfare influences of an energy excise tax in jiangsu province of china a computable general equilibrium approach abstract in recent years although china s energy intensity has gradually decreased the total consumption of energy commodities has increased sharply levying an excise tax on energy commodities is one of the keys to control energy consumption this paper constructed a computable general equilibrium model to simulate levying an energy excise tax in jiangsu province which is one of china s strong economic provinces with lower endowments of energy resources the results show that the energy excise tax is beneficial for energy saving while levying energy will cause economic and welfare declines when at a level tax rate of 5 10 and 15 the loss of gdp will reach 0 27 0 66 and 1 13 respectively and the incomes of inhabitants and enterprises alike will decrease when the energy tax revenue used to compensate for the welfare losses suffered by inhabitants or enterprises there is a double dividend effect energy saving and increasing income moreover the simulation indicated that a 5 improvement of energy efficiency brings about a backfire phenomenon with an increase of 142 in energy consumption however when considering the cost of energy efficiency improvements the rebound effect will be significantly decreased policy suggestions are further recommended to help improve the energy policy in regard to reducing energy consumption

the control of co2 emissions and its economic impact an age model for a german state since it is believed that co2 is responsible for 55 of the greenhouse effect a co2 levy is now under consideration in several countries for an assessment of the macroeconomic implications of an integrated energy and environmental policy we employ an applied general equilibrium model age since all sectors of an economy and all private households contribute to co2 emission our model is a temporary equilibrium model with capacity extension under adjustment costs and with abatement activities for so2 and nox emissions

the importance of the design of market based instruments for co2 mitigation an age analysis for spain in the past few decades economists have defended the use of market based instruments mbi in environmental and climate policy there have been many papers which have compared the costs of attaining environmental objectives with mbis and with command and control instruments however very few have compared different mbis in examining these costs this paper seeks to analyse various mbis for co2 mitigation from the viewpoint of cost effectiveness using an age applied general equilibrium model for the case of spain a distinction is drawn between 1 quantity instruments which represent different extents of a market for emission permits and 2 price instruments which represent different types of tax each instrument can affect different segments of the emission sources and therefore can have very different effects on the economy as a whole we show how mbi can help to minimise mitigation costs but also how taxes and tradable emission permits that are limited or constrained by many exemptions and distortions can raise costs considerably

the political economy of environmental regulation towards a unifying framework there are several theories that attempt to explain various aspects of environmental policy building on insights from this theoretical work and recent advances in our understanding of instrument performance this paper constructs a more complete theory of environmental regulation there are two primary contributions of this research the first is to provide more satisfactory explanations for a number of observed patterns of environmental policy for example there is as yet no satisfactory theory about the emergence of incentive based mechanisms such as marketable permits and effluent fees the second contribution of this paper is to develop a parsimonious framework for understanding many important aspects of environmental policy this framework suggests the outputs of environmental policy emerge from a struggle between key interest groups

carbon taxes and carbon emissions trading this paper surveys the literature on and examples of current implementation of carbon taxes and carbon emission permits it sets out the theoretical basis for these instruments with special reference to the revenue recycling and tax interaction effects this theoretical work concludes that instruments which raise revenue which can be recycled so as to reduce pre existing distortionary taxes are significantly less costly than those which do not the paper then reviews the sizable literature on the distributional effects of these instruments especially with regard to industrial competitiveness and regressive effects on low income groups evaluating attempts to mitigate these where they are perceived as unacceptable the paper concludes that such efforts at mitigation while possible can substantially reduce the efficiency benefits of the instruments the projected costs of carbon taxes depend on a wide range of assumptions this is still a contested area but the paper concludes that on a range of plausible assumptions these costs need not be high finally the paper notes that early evaluations of the environmental effectiveness of carbon taxes have been generally positive this suggests that if concern about anthropogenic climate change continues to increase more countries will introduce carbon taxes and emission permits with the latter increasingly auctioned

normalized quadratic systems of consumer demand functions empirically estimated demand systems frequently fail to satisfy the appropriate theoretical curvature conditions we propose and estimate two demand systems for which these conditions can be imposed globally the first is derived from a normalized quadratic reciprocal indirect utility function and the second is derived from a normalized quadratic expenditure function the former is flexible if there are no restrictions on its free parameters but loses flexibility if the curvature conditions need to be imposed the latter is flexible in the class of functions satisfying local money metric scaling even if the curvature conditions need to be imposed

energy taxation and the double dividend effect in taiwan s energy conservation policy an empirical study using a computable general equilibrium model abstract faced with pressure from greenhouse gas reductions and energy price hikes the taiwan government is in the process of developing an energy tax regime to reflect environmental external costs and effectively curb energy consumption as well as mitigate co2 emissions through an adequate pricing system this study utilizes a cge model to simulate and analyze the economic impacts of the draft energy tax bill and its complementary fiscal measures under the assumption of tax revenue neutrality the use of energy tax revenue generated for the purpose of reducing income tax is the best choice with double dividend effects since it will effectively stimulate domestic consumption and investment and consequently mitigate the negative impacts of the distortionary tax regime the double dividend effect is less significant however when the supplementary measures being used are for government expenditure nevertheless all supplementary measures have effectively reduced energy consumption which means they have delivered at least the first dividend in the sense of co2 emissions control it has been verified in this study that having adequate public finance policy measures is the key to realizing the double dividend effect

tradeable carbon permit auctions how and why to auction not grandfather abstract an auction of carbon permits is the best way to achieve domestic carbon caps designed to limit global climate change to minimize administrative costs permits would be required at the level of oil refineries natural gas pipe lines natural gas liquid sellers and coal processing plants to maximize liquidity in secondary markets permits would be fully tradable and bankable the government would conduct quarterly auctions a standard ascending clock auction in which price is gradually raised until there is no excess demand would provide reliable price discovery an auction is preferred to grandfathering giving companies permits based on historical output or emissions because it allows reduced tax distortions provides more flexibility in distribution of costs provides greater incentives for innovation and reduces the need for politically contentious arguments over the allocation of rents

hybrid modeling to support energy climate policy effects of feed in tariffs to promote renewable energy in portugal abstract feed in tariffs have been the main policy instrument applied in portugal for the promotion of electricity produced from renewable energy sources under the eu directives on energy and climate regulation in this paper we provide an empirical impact assessment of the economic and environmental effects of portugal s fits policy to promote res e generation impact assessment of policy instruments plays a crucial role on decision making process for numerical simulations we make use of a hybrid top down bottom up general equilibrium modeling approach which represents a reliable tool to analyze the complex interactions between economic energy and environmental issues related to energy policies numerical simulations confirm the empirical evidence that the fits policy implemented by portugal was both an effective and a cost efficient way to increase the generation of electricity from renewable energy sources and thus to achieve the national res e target of 45 in 2010 results show relatively modest macroeconomic impacts indicating potentially low economic adjustment costs from an environmental perspective the deployment of renewable energy source results in significant carbon emissions reductions

the reform of the european energy tax directive exploring potential economic impacts in the eu27 abstract the aim of this study is to analyze the effect that the energy tax directive reform proposed in 2011 would have if implemented on the level of prices in the different sectors of the 27 countries of the european union we apply a multiregional and multisectoral model of trade flows that takes into account all the intersectoral and intercountry interdependences in the production processes using the world input output database we perform two different simulations the first one considers the tax changes proposed by the reform the second one shows the impact the reform would have entailed if it were applied also to sectors belonging to the european trade system the main finding of the first simulation shows that the new energy tax regime would have had a low economic cost in terms of impact on prices less than 1 in all the countries so the concerns about competitiveness do not find empirical support in our results suggesting the need for further analyses to find out the reasons that caused the failure of a reform that was an important step to introduce a taxation explicitly linked to co 2 emissions the second simulation however leads to strongly different results pointing out the relevance of maintaining significant economic incentives to reduce carbon emissions for the european trade system sectors by improving the emission market performance or by applying carbon taxation also to these sectors

energy taxation in a small open economy social efficiency gains versus industrial concerns welfare analyses of energy taxes typically show that systems with uniform rates perform better than differentiated systems especially if revenue can be recycled by cutting taxes that are more distortionary however in practical policy efficiency gains must be traded off against industrial concerns presumably energy dependent industries of small open economies will suffer relatively more if taxed this computable general equilibrium cge study examines the social costs of compensating the energy intensive export industries in norway for their profit losses from imposing the same electricity tax on all industries the costs are surprisingly modest this is explained by the role of the nordic electricity market which is still limited enough to respond to national energy tax reforms thus an electricity price reduction partly neutralizes the direct impact of the tax on profits in addition we examine the effects of different compensation schemes and find significantly lower compensation costs when the scheme is designed to release productivity gains

allocation of carbon permits within a country a general equilibrium analysis of the united kingdom abstract the kyoto agreement includes international trade in carbon permits from 2008 we have used a cge model to evaluate methods of allocating permits within the uk auctioning is broadly similar to a carbon tax with revenues recycled to reduce other distortions grandfathering some permits free to large firms would mean a loss of recycling and possibly give windfall profits to foreigners alternatively regularly revised allocation using best practice estimates would be similar to recycling revenue as an output subsidy such a system could allow much of the potential double dividend to be realised though an auction system might still be preferable

towards a more general version of the almost ideal demand system abstract this note proposes a generalization of the almost ideal demand system two independent parameters provide more flexibility to the shape of the engel curves and to the form of the price effects

effects and mechanism of influence of china s resource tax reform a regional perspective abstract china s resource tax reform beginning with xinjiang as a pilot area in june 2010 marked a new stage in the progression of china s resource tax system based on the 2007 social accounting matrix sam for xinjiang constructed by ourselves this paper takes a regional perspective on china s resource tax reform to quantitatively calculate its degree of influence and qualitatively analyze its mechanism of influence by adopting an energy computable general equilibrium cge model and a sam price model the results show that the main significance of the reform lies in bolstering local government finances rather than energy conservation or carbon reduction this is because revenue will be transferred from resource enterprises and the central government to the local government while simultaneously the low tax rate narrow tax scope and unreasonable price mechanism will combine to prevent the reform from reaching its environmental goals promoting resource price mechanism reform and deepening resource tax reform will be two key elements of china s future energy strategies because resource enterprises will bear the increased burden caused by the reform the degree of sectoral price increases will be limited therefore the fear that resource tax reform will push up inflation is unnecessary and should not be a barrier to reform

fossil fuel subsidies and environmental constraints fossil fuel subsidies are applied in many countries for different policy reasons such as maintaining jobs in fossil fuel sectors securing national energy supply or lowering the energy costs of selected industries to strengthen competitiveness the current economic costs of fossil fuel subsidy policies can be substantially increased by future environmental constraints we illustrate this point in the framework of a general equilibrium analysis for germany where we quantify the economic costs of alternative hard coal subsidy policies at different co2 reduction levels our calculations show that german hard coal subsidies as a means of retaining jobs can get very expensive with additional specific costs of up to annual 70 000 dm per job for a given co2 reduction target of 35 though the empirical analysis is focused on germany the general conclusion that current subsidy policies of fossil fuels must be fundamentally reconsidered in view of forthcoming environmental constraints is also relevant for other countries

curvature restrictions on flexible functional forms an application of the minflex laurent almost ideal demand system to the pattern of spanish demand 1954 1987 this article introduces a new demand model labeled minflex laurent almost ideal demand system which has been achieved by combining the flexible functional minflex laurent form with the price independent generalized logarithm expenditures structure introduced by muellbauer the model has been applied to analyze the aggregate demand behavior of final consumer goods in the spanish economy from 1954 to 1987 when the flexible functional form has been empirically tested the curvature requirements imposed by economic theory have been studied

exemption versus zero rating a hidden problem of vat abstract we examine the difference between exemptions and zero rating under a consumption based vat in a numerical general equilibrium model to allow for a better understanding of the accruing efficiency effects we first develop a method to convert the nominal vat rates into effective tax rates on categories of final demand then we show how these effective tax rates can be used to perform a gradual transition from exemption to zero rating

flexible and semiflexible consumer demands with quadratic engel curves in this paper we introduce three flexible consumer demand systems in which expenditures on goods are quadratic functions of income we view these alternatives as to the demand systems used heretofore in the empirical modeling of rank three demands namely those in which expenditure shares are quadratic functions of the logarithm of income curvature conditions required by theory can be imposed locally during the estimation for each and a semiflexible version can be estimated for illustrative purposes we estimate various forms of two of the systems using canadian data on seven categories of goods for the period 1947 to 1995

a future for carbon taxes abstract carbon taxes have been frequently advocated as a cost effective instrument for reducing emissions however in the practice of environmental policies only six countries have implemented taxes based on the carbon content of the energy products in this paper we evaluate carbon taxes with regard to their competitiveness distributional and environmental impacts the evidence shows that carbon taxes may be an interesting policy option and that their main negative impacts may be compensated through the design of the tax and the use of the generated fiscal revenues

domestic climate policies and the wto the kyoto protocol gives annex 1 countries considerable flexibility in the choice of domestic policies to meet their emissions commitments possible climate policies include carbon energy taxes subsidies energy efficiency standards eco labels and government procurement policies in order to meet their targets with minimum adverse effects on their economies annex 1 governments with differentiated legal and political systems are highly likely to pursue these policies that may have the potential to bring them into conflict with their wto obligations this paper explores the potential interaction between these domestic climate policies and wto rules it argues that their potential conflicts can be avoided or at least minimised if wto rules are carefully scrutinised and efforts are made early on to ensure that the proposed climate policies comply with them it suggests an early process of pursuing consultations between wto members and the parties tclimate change convention and points to the need of further exploring ways to enhance synergies between the trade and climate regimes

energy taxes in the netherlands what are the dividends in this paper the environmental and economic effects of the introduction of a unilateral energy tax in the netherlands are analysed using an applied general equilibrium age model the effects of a small user energy tax and a general energy tax are compared while taking into account different tax recycling mechanisms the model contains a great level of detail with respect to emissions and environmental indicators greenhouse effect acidification eutrophication and waste which is helpful for assessing environmental quality the results show that the introduction of a small environmental tax reform not only improves the environment but also raises non environmental welfare which is due to an improvement of the efficiency of the tax structure

when can carbon abatement policies increase welfare the fundamental role of distorted factor markets abstract this paper employs analytical and numerical models to assess the welfare effects of a revenue neutral carbon tax and nonauctioned carbon emissions permits taking into account preexisting tax distortions in factor markets the presence of preexisting taxes significantly raises the general equilibrium costs of both policies this cost increase is much greater under emissions permits since this policy does not generate revenues to reduce distortionary taxes under our central estimates emissions permits cannot increase welfare unless environmental damages exceed about 18 per ton of carbon in contrast an appropriately scaled carbon tax is welfare improving so long as environmental damages are positive

carbon taxation and market structure a cge analysis for russia abstract russia is one of the world s major sources of carbon based energy as well as one its most intensive users introducing carbon taxes can lead to a reduction in emissions and encourage investment in energy efficiency we investigate the economic effects of carbon taxes on the russian economy under perfect competition and a cournot oligopoly in output markets the main findings are i substituting carbon taxes for labour taxes can yield a strong double dividend in russia however welfare gains strongly depend on the labour supply elasticity and elasticities of substitution between capital labour and energy ii under the assumption of a cournot oligopoly with homogenous products and symmetric firms in the markets for natural gas petroleum and chemical products metals and minerals welfare costs of the environmental tax reform can be higher than under perfect competition this is because introducing carbon taxes leads to a reduction in already sub optimal output thereby exacerbating pre existing distortions arising from imperfect competition iii furthermore increases in energy costs can result in higher mark ups in some markets because of less competition resulting from firms exit

reflections on the double dividend debate we survey the history of carbon taxation the range of market based instruments mbis of environmental control and the state of the double dividend debate in order to suggest directions for future research into mbis returning mbi revenues as lower distortionary taxes rather than as lump sums raises aggregate welfare but we favour mbis which raise little or no revenue for reasons of political acceptability to interest groups at the same time the overall case for any environmental improvement is weaker because of general equilibrium interactions with prior distortionary taxes research seems most necessary on quantifying the efficiency benefits of market control of heterogeneous polluters the benefits of environmental improvement the tax interaction effect and the various information costs of an mbi all on a case by case basis for different pollutants and places

optimal environmental taxation in the presence of other taxes general equilibrium analyses this paper examines the optimal setting of environmental taxes in economies where other distortionary taxes are present we employ analytical and numerical models to explore the degree to which in a second best economy optimal environmental tax rates differ from the rates implied by the pigovian principle according to which the optimal tax rate equals the marginal environmental damages both models indicate contrary to what several analysts have suggested that the optimal tax rate on emissions of a given pollutant is generally less than the rate supported by the pigovian principle moreover the optimal rate is lower the larger are the distortions posed by ordinary taxes numerical results indicate that previous studies may have seriously overstated the size of the optimal carbon tax by disregarding pre existing taxes this abstract was borrowed from another version of this item

fair trade and harmonization of climate change policies in europe abstract in march 2000 the european commission presented a green paper on greenhouse gas emissions trading within europe supporting implementation of a community wide scheme in which the design and regulation of all essential elements would be harmonized at the community level the present paper analyzes economic arguments used to justify such a coordinated scenario showing these arguments to be based on misleading rhetoric about fair trade and harmonization diverse allocations of emissions allowances across member states are justified in theory in practice too no empirical evidence or model based results demonstrate that an uncoordinated european trading scheme would adversely affect competitiveness to any significant extent or substantially increase industrial relocations

eco labeling and market equilibria with noisy certification tests an intriguing alternative to traditional methods for regulating externalities is the provision of information about firms environmental attributes an increasingly important example of this approach is eco labeling where a third party certifies firms products such schemes are currently used in a variety of countries this paper investigates the equilibria that may occur with eco labeling and the attendant welfare effects i model certification as a noisy test subject to both type i and type ii errors but where green firms more likely to pass than brown firms while it commonly leads to an increase in the fraction of green units in the market the introduction of an eco label can either increase or decrease welfare

public preferences for carbon tax attributes the impacts of climate change are already visible throughout the world recognizing the threats posed by climate change the durban platform the 17th session of the conference of parties cop 17 underscores that the global nature of climate change calls for the widest possible cooperation and ambitious action by all countries a crucial starting point for the design of effective and publicly acceptable policies is to explore public preferences for climate policy instruments using a choice experiment this study investigates public preferences for carbon tax attributes in a developing country context the results account for heterogeneity in preferences and show that turkish people prefer a carbon tax with a progressive cost distribution rather than one with a regressive cost distribution the private cost has a negative effect on the probability of choosing the tax earmarking carbon tax revenues increases the public acceptability of the tax moreover there is a preference for a carbon tax that promotes public awareness of climate change

a box cox consumer demand system nesting the almost ideal model this article proposes a consumer demand system that has a generalized functional form characterized by the box cox transformation the new model offers a wider range of responses to both price and expenditure changes than the existing price independent generalized linear models including the almost ideal demand system even with these features its functional form is relatively simple and easy to interpret and implement an empirical illustration is given for japanese demand for nondurable goods and services the results show that the new model is preferable to the nested models in terms of relative explanatory power and producing reasonable elasticities

green fiscal reform in sweden econometric assessment of the carbon and energy taxation scheme abstract empirical econometric assessment of environmental policy effectiveness is capable of demonstrating which tools have been helping to achieve the desired effect of reducing harmful emissions or stimulating technological change this paper employs an econometric approach to analyse the effectiveness of energy and carbon taxes in sweden the country which was one of the first to introduce a co2 tax as well as an extensive environmental tax reform the results showed that taken in isolation a co2 tax was not sufficient to result in a significant change in co2 emissions in sweden except in the case of petrol on the other hand energy taxes for coal and lpg have been statistically significantly effective it was also clear that a technological innovation in the form of development of nuclear and hydro energy played a significant role in reducing co2 emissions and higher oil price was also important in reducing national co2 emissions in sweden at the same time renewable energy excluding hydro a more recent innovation has not been a statistically significant driver of co2 emissions reduction perhaps due to the fact that wind and solar play a much lesser role in sweden at the moment the net electricity imports from other countries have contributed positively towards reducing co2 emissions in sweden while the use of coal and biomass tended to increase co2 emissions compared to the ex ante modelling results from the literature review the findings confirm the role of environmental taxation as a viable policy instrument effective in reducing co2 emissions in sweden although point towards a more nuanced picture the paper raises important policy questions focused on the effectiveness of environmental policy tools

norwegian emissions of co2 1987 1994 a study of some effects of the co2 tax several countries have introduced taxes on fossil fuels with the aim of reducing atmospheric emissions partly because of local environmental goals so2 nox and partly to participate in a global effort to reduce emissions of greenhouse gases many macroeconomic studies based on both global and national models have been made of how emissions can be reduced with the help of taxes and the consequent reduction in gdp following the introduction of such taxes norway has had a co2 tax for five years thereby providing a unique opportunity to evaluate the effects of this tax on emissions the paper provides a counterfactual analysis of energy consumption and emissions if no co2 taxes had been introduced compared with the actual situation in which such taxes exist the effect of a co2 tax on oil consumption and thus co2 emissions is studied on the basis of partial economic models for various sectors of the norwegian economy the study indicates that the co2 tax has had an impact on co2 emissions in norway

impacts of climate policy on the competitiveness of canadian industry how big and how to mitigate competitiveness concerns have been at the forefront of climate policy debates in canada particularly as a result of its high energy intensity and significant exposure to international markets this paper uses a dynamic computable general equilibrium model to assess the likely impacts on sectoral competitiveness that would accompany efforts to meet greenhouse gas mitigation targets that have been set by the canadian government additionally it evaluates several design mechanisms that could be used to reduce the negative competiveness impacts associated with adoption of domestic climate policies the analysis suggests that several sectors would likely face significant competiveness challenges under a reference scenario in which permits are given to emitters in lump sum however it finds that competiveness impacts can be minimized by using output based recycling of permits or by using border tax adjustments

an integrated economic and distributional analysis of energy policies most public policies particularly those in the energy sphere have not only efficiency but also distributional effects however there is a trade off between modelling approaches suitable for calculating those impacts on the economy for the former most of the studies have been conducted with general equilibrium models whereas partial equilibrium models represent the main approach for distributional analysis this paper proposes a methodology to simultaneously carry out an analysis of the distributional and efficiency consequences of changes in energy taxation in order to do so we have integrated a microeconomic household demand model and a computable general equilibrium model for the spanish economy we illustrate the advantages of this approach by simulating a revenue neutral reform in spanish indirect taxation with a large increase of energy taxes that serve an environmental purpose the results show that the reforms bring about significant efficiency and distributional effects in some cases counterintuitive and demonstrate the academic and social utility of this approximation

on the impacts of carbon tax and technological progress on china using a dynamic national computable general equilibrium model we investigate the impact of carbon tax and energy efficiency improvement on the economy and environment of china the chinese social

implications of co2 reduction policies for a high carbon emitting economy this paper uses a dynamic computable general equilibrium model to compare the macroeconomic and sectoral impacts of three environmental policies in australia an emissions trading scheme ets an ets combined with technological innovation in the renewable energy sector and a fuel tax as an alternative to the ets overall the impacts of the ets were not significantly adverse although the fuel tax had similar impacts to the ets on key macro variables such as real gdp employment household consumption exports and imports it was however not effective compared to the latter in reducing emissions neither policy led to inflation growth of more than 0 8 for any coal mining and non mining australian state at the sectoral level the gdp growth of energy intensive industries such as coal iron ore steel and coal powered electricity generators is adversely affected while electricity generators who use gas and renewable energy sources and the forestry sector gain it was also found that a 10 technological change in the renewable energy sector over a decade did not significantly improve the outcome when coupled with the ets thus the australian government s industry assistance to invest in low pollution technologies needs to be more aggressive to meet current and future international emission abatement targets

assessment of european union transition scenarios with a special focus on the issue of carbon leakage this paper uses the model gemini e3 to simulate and assess the transition scenario to 2020 framed by the european union in its energy climate directive and it raises several issues in this connection after a brief description of the model the paper presents the results of the scenarios mainly the values of the major indicators of carbon price both in the ets and in non ets sectors and the welfare cost of the eu policy under the various configurations considered while it is independent of the scenario in the ets sector in the non ets sector the value of carbon is very sensitive to the provisions of the directive and in particular the option of resorting to the flexibility mechanisms the welfare cost also varies significantly according to scenarios and its value for the entire eu is more than double in the scenario closest to the directive as compared to the least cost one the paper also addresses the very sensitive issue of carbon leakage and argues in favor of a new concept of net leakage the analysis shows that while carbon leakage may affect some specific sectors at the aggregate level it does not represent a real concern with a magnitude of at most a few percent of ghg abatement by annex b countries

the welfare effects and the distributive impact of carbon taxation on italian households in this work the welfare effects and the distributive impact on italian households of the italian carbon tax are calculated the carbon tax has been introduced in italy at the beginning of 1999 asking for smooth increases over a number of years in the prices of most fossil fuels its welfare effects have been calculated using true cost of living index numbers and the compensating variation the parameters have been obtained through estimation of a complete almost ideal demand system using households data from 1985 to 1996 the welfare loss turns out to be quite substantial and affects italian households in a non negligible way but the distribution of welfare losses across different levels of total monthly expenditures does not allow sustaining the regressivity of carbon taxation as the effect becomes bigger as we move up the income distribution this evidence might encourage the use of carbon taxes at least in the transport sector as cost effective instruments of environmental policy especially after the ratification of the kyoto protocol on climate change

differentiated carbon prices and the economic cost of decarbonization employing a numerical general equilibrium model with multiple fuels end use sectors heterogeneous households and transport externalities this paper examines three motives for differentiated carbon pricing in the context of swiss climate policy fiscal interactions with the existing tax code non hbox co 2 related transport externalities and social equity concerns interaction effects with mineral oil taxes reduce carbon taxes on motor fuels and transport externalities increase them we show that the cost effective overall carbon tax on motor fuels should be lower than the one on thermal fuels this is found in spite of the fact that pre existing taxes on motor fuels are well below our estimate of the transport externality per unit of transport fuel consumption differentiating taxes in favor of motor fuels yields only slightly more equitable incidence effects among households suggesting that equity considerations play a minor role when designing differentiated carbon pricing policies

carbon taxes with exemptions in an open economy a general equilibrium analysis of the german tax initiative abstract sectoral exemptions from environmental regulation are applied in many countries to avoid adverse adjustment effects in specific industries the problem with exemptions is that they can make environmental policy more costly our paper analyzes the welfare costs of exemptions in environmental policy together with the issue of unilateral carbon taxes in an open economy several countries within the eu have introduced or contemplated unilateral taxes to reduce anthropogenic co2emissions taxes which are unilaterally imposed in an open economy can have significant impacts on production and employment of energy and export intensive industries to save jobs by maintaining international competitiveness most co2taxation schemes include exemptions for energy and export intensive industries as a compromise between environmental objectives and employment in these sectors this paper shows that such compromises are costly as the tax base narrows the dead weight loss increases our calculations illustrate this point in the framework of a static general equilibrium model for west germany calibrated to 1990 data we evaluate the excess costs of exemptions as a means of saving jobs in specific industries relative to an alternative instrument a uniform carbon tax cum wage subsidy which achieves an identical level of national emissions and employment at a fraction of the cost

impact of a carbon tax on the chilean economy a computable general equilibrium analysis abstract in 2009 the government of chile announced their official commitment to reduce national greenhouse gas emissions by 20 below a business as usual projection by 2020 due to the fact that an effective way to reduce emissions is to implement a national carbon tax the goal of this article is to quantify the value of a carbon tax that will allow the achievement of the emission reduction target and to assess its impact on the economy the approach used in this work is to compare the economy before and after the implementation of the carbon tax by creating a static computable general equilibrium model of the chilean economy the model developed here disaggregates the economy in 23 industries and 23 commodities and it uses four consumer agents households government investment and the rest of the world by setting specific production and consumptions functions the model can assess the variation in commodity prices industrial production and agent consumption allowing a cross sectoral analysis of the impact of the carbon tax the benchmark of the economy upon which the analysis is based came from a social accounting matrix specially constructed for this model based on the year 2010 the carbon tax was modeled as an ad valorem tax under two scenarios tax on emissions from fossil fuels burned only by producers and tax on emissions from fossil fuels burned by producers and households the abatement cost curve has shown that it is more cost effective to tax only producers rather than to tax both producers and households this is due to the fact that when compared to the emission level observed in 2010 a 20 emission reduction will cause a loss in gdp of 2 and 2 3 respectively under the two scenarios the tax value that could lead to that emission reduction is around 26 us dollars per ton of co2 equivalent the most affected productive sectors are oil refinery transport and electricity having a contraction between 7 and 9 analyzing the electricity sector by energy source the production of electricity from fossil fuels will decrease by 11 but electricity from renewables will increase by 43 electricity producers will pass the cost of the carbon tax to the consumer by increasing the price of electricity by 8 the findings of this paper will allow policy makers to take better and more informed decisions by providing a cross sectoral analysis of the impact on the economy of reducing emissions by 20 by implementing a national carbon tax