the distribution of income in china preface notes on the contributors introduction k griffin z renwei part 1 the distribution of income household income and its distribution a r khan k griffin c riskin z renwei three features of the distribution of income during the transition to reform z renwei part 2 income and wealth in rural china the determinants of household income in rural china a r khan the distribution of wealth in rural china t mckinley income distribution and poverty in rural china c riskin part 3 employment and human capital workers in china s rural industries j knight s lina why urban wages differ in china j knight s lina the determinants of educational attainment j knight l shi annex the 1988 household sample survey m eichen z ming index

cost push impact of taxing carbon in china a price transmission perspective abstract this paper aims to provide a comprehensive look at the potential price effects of a carbon tax at the sectoral level in chinese economy from a production perspective the sectors subjected to the levy are discussed based on sectoral linkage characteristics and then the tax induced repercussions of output prices are simulated using an extended i o price model the results based on the chinese economy for the year 2012 show that levying a carbon tax on sectors with above average co2 emission linkages and non significant production linkages will increase their output prices by an average of 1 93 while induce relatively slight price increases in the encouraged group 0 30 and the other group 0 34 the household is the least affected sector 0 28 in the economy this means that an appropriate tax design tends to shift intermediate inputs and expenditure toward less co2 intensive goods and services by its uneven cost push impacts on production sectors and the entire economy will ultimately get affected by establishing techniques for policy evaluation our analysis highlights the value of linkage analysis in the design of a carbon tax and brings more clarity to price transmission after the imposition of a carbon tax in the economy consequently the indirect effect of carbon tax on household can be better understood

are emissions permits regressive grandfathered emissions permits redistribute income to wealthy households by creating firm rents that ultimately accrue to shareholders consequently they can be highly regressive even if the poor do not have large budget shares for polluting goods using an analytical model this paper estimates the burden of emissions permits borne by different income groups under control of power plant emissions of carbon so2 and nox we also compare the burden borne by poor households under permits with that under emissions taxes performance standards technology mandates and input taxes and we show how the social costs of policies differ from efficiency costs when society has aversion to inequality

decoupling china s carbon emissions increase from economic growth an economic analysis and policy implications as the world s second largest carbon emitter china has long been criticized as a free rider benefiting from other countries efforts to reduce greenhouse gas emissions but not taking responsibility for its own emissions china has been singled out as one of the major targets at the subsequent negotiations after the kyoto meeting bq analyzing the historical contributions of interfuel switching energy conservation economic growth and population expansion to china s co2 emissions during 1980 97 this article clearly demonstrates that the above criticism is unjustified moreover given the fact that the role of china is an issue of perennial concern at the international climate change negotiations the article envisions some efforts and commitments that could be expected from china until its per capita income catches lip with the level of middle developed countries by emphasizing the it win win strategies these efforts and commitments are unlikely to jeopardize china s economic development and at the same time would give the country more leverage at the international climate change negotiations subsequent to the buenos sires meeting c 2000 elsevier science ltd all rights reserved

wind power development in sweden global policies and local obstacles abstract recently the swedish government adopted a national planning goal of a yearly wind power generation of 10 twh by 2015 implying a substantial increase from the current 0 6 twh level in this paper we provide an economic assessment of the potential for future wind power investments in sweden in close conjunction with an analysis of the legal attitudinal and policy related uncertainties that face a wind mill investor it is shown that the economics of swedish wind power is negatively affected by a the lack of policy stability b public criticism at the local level and in particular c the legal provisions governing the assessment of the environmental impacts of wind mills and the planning procedures for mill location while national and global energy policies as well as the general public point out wind power as particularly environmentally friendly most of the objections to its expansion at the local level tend to have environmental origins the interests of those who object to wind mill installations gain strong legal protection and the municipal territorial planning monopoly in sweden implies that it is hard to make national energy policy goals heard at the local implementation stage compared to its competitors wind power is the technology that tends to have the most to loose from the risk and uncertainties created by this investment environment the paper identifies and discusses a number of ways in which the national policy interests could be strengthened at the local level we discuss the role of citizen participation as well as solutions within the realms of the legal system moreover since the diffusion of wind power encounters the most strident legal and attitudinal obstacles where it interferes with competing land uses a move offshore appears to be an efficient strategy from the perspective of a wind mill investor a stronger political commitment to wind power expansion in legal provisions as well as in the form of long run stability in policy instrument implementation will probably be necessary to attain the 2015 policy goal

learning and control in a changing economic environment abstract in this paper we investigate optimal bayesian learning and control with lagged dependent variables and time varying unknown parameters we assess both the performance of alternative decision rules as in the computationally oriented dual control literature as well as the dynamics of learning and convergence of beliefs as in the more theoretically oriented bayesian learning literature our numerical results indicate that the optimal decision rule involves a noticeable degree of experimentation for moderate to large levels of uncertainty in most situations though the optimal rule will remain less activist than a certainty equivalent rule and induce gradualism exceptions occur when the process to be controlled is near the deterministic steady state in this situation we find that the decision maker will repeatedly undertake costly experiments the extent of optimal experimentation is lower if the unknown parameter is perceived to vary over time in contrast to the fixed parameter case however parameter uncertainty is continually renewed and the incentive to experiment never ceases

global warming irreversibility and learning a number of economists have argued that the literature on the irreversibility effect implies that current abatement of greenhouse gas emissions should be greater when there is the possibility of obtaining better information in the future about the potential damages from global warming than when there is no possibility of obtaining better information in this paper we show that even the simplest model of global warming does not satisfy either of epstein s 1980 sufficient conditions so it is not possible to use epstein s analysis to tell whether the irreversibility effect applies to models of global warming we derive an alternative sufficient condition for the irreversibility effect to hold

energy and carbon taxes and their distributional implications this paper studies the equity effects of energy and carbon taxes as policy instruments to reduce greenhouse gas emissions and fulfil the legally binding reduction targets adopted in the 1997 kyoto protocol to the united nations framework convention on climate change unfccc the equity effects of taxes on energy products are studied in the broader context of a revenue neutral environmental fiscal reform the paper shows that carbon or energy taxes are mildly regressive and that impacts on low income households are less than expected the distributional implications depend on various issues such as whether the type of fuel being taxed heating transport and in particular how the revenues are recycled back to the economy the importance of compensation and mitigation measures is also discussed

carbon tax simulations using a household demand model abstract the main objective of this paper is to analyse consumer response and welfare effects due to changes in energy or environmental policy to achieve this objective we formulate and estimate an econometric model for non durable consumer demand in sweden that utilises micro and macro data in the simulations we consider two revenue neutral scenarios that both imply a doubling of the co2 tax one that returns the revenues in the form of a lower vat and one that subsidise public transport one conclusion from the simulations is that the co2 tax has regional distribution effects in the sense that household living in sparsely populated areas carry a larger share of the tax burden

an analysis on the short term sectoral competitiveness impact of carbon tax in china abstract market based instruments particularly carbon tax have recently drawn the attention of chinese government by their cost effective contribution to the achievement of china s climate targets most of the recent policy proposals have focused on its long term impact however particularly for policy makers both long term and short term effects of carbon tax would be necessary when determining tax rates we provided a detailed analysis of short term impacts of carbon tax on sectoral competitiveness in this paper we divided china s economy into 36 sectors based on its 2007 input output table in order to examine the ratio of carbon tax added costs to sector gdp we were thus able to determine the impact level of a carbon tax on each sector we then divided the sectoral trade impact into domestic competitiveness with regards to foreign imported products and international competitiveness external to the chinese domestic market we found that a high tax level 100 yuan t co2 may necessitate compensatory measures to certain highly affected industries and that a low tax rate 10 yuan t co2 would generate few competitiveness problems for all industries and may therefore be considered as an appropriate starting point

a chinese sky trust distributional impacts of carbon charges and revenue recycling in china abstract the introduction of carbon charges on the use of fossil fuels in china would have a progressive impact on income distribution this outcome which contrasts to the regressive distributional impact found in most studies of carbon charges in industrialized countries is driven primarily by differences between urban and rural expenditure patterns if carbon revenues were recycled on an equal per capita basis via a sky trust the progressive impact would be further enhanced low income mainly rural households would receive more in sky trust dividends than they pay in carbon charges and high income mainly urban households would pay more than they receive in dividends thus a chinese sky trust would contribute to both lower fossil fuel consumption and greater income equality

the effects of carbon taxation in china an analysis based on energy input output model in hybrid units abstract this paper evaluates the economy wide effects of carbon taxation in china to this end we build a price model based on an energy input output table in hybrid units that ensures the consistency of the analysis the results indicate that carbon taxation has small negative impact on gdp there are however relatively substantial emissions reductions to explore whether the impacts are spatially blind in the sense of having similar impacts on urban and rural residents the results of the distributional effects show that the impacts of carbon taxation on different urban household groups reveal small differences and are slightly regressive yet for rural residents carbon taxation may be significantly regressive in addition rural residents are found to be affected much more than urban residents furthermore the paper explores a policy intervention to investigate the effects of redistributing the carbon tax paid by households the main results reveal that reallocating the carbon tax to the groups with low income levels can offset the negative distributional effects significantly moreover the results of miyazawa style interrelational income multiplier analysis indicate that the household groups with high income would benefit significantly from the income increases in those with low income levels but not vice versa

deliberating on renewable and sustainable energy policies in china abstract in order to realize the sustainable development of country and society many countries have established their renewable energy law and development strategy no matter developed countries or developing countries it is well known that china is the largest developing country in the world and the per capita gdp ranks more than 100 however the total gdp ranks the second due to the huge population amount and just behind usa certainly the total energy consumption amount is huge and the big energy demand has brought a serious of environmental problems such as acid rain water and soil pollution and resource exhaustion etc fortunately china central government has regarded the serious question to realize the sustainable development in future the renewable energy law has been established in 2005 firstly china s energy situation and existing environmental questions in past years is introduced in this paper secondly the distribution and the application practice of different renewable energy were introduced then china s renewable energy policy is detailed introduced in the following section the next section discusses the existing questions based on these discussions the development barriers and recommendations are introduced respectively

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

poverty and distributional effects of a carbon tax in mexico abstract mexico recently declared ambitious goals in reducing domestic co2 emissions and introduced a carbon tax in 2014 although negative effects on household welfare and related poverty measures are widely discussed as possible consequences empirical evidence is missing we try to fill this gap by simulating an input output model coupled with household survey data to examine the welfare effects of different carbon tax rates over the income distribution the currently effective tax rate is small and has negligible effects on household welfare higher simulated tax rates maintaining the current tax base show a slight progressivity but welfare losses remain moderate welfare losses regressivity and poverty rise more with widening the tax base towards natural gas and the other greenhouse gases methane ch4 and nitrous oxide n2o mainly through food price increases for a complete analysis of the policy we simulate a redistribution of calculated tax revenues and find that the resulting effects become highly progressive also for high rates wider tax bases and even in the absence of perfect targeting of social welfare programs

poverty and household size the widely held view that larger families tend to be poorer in developing countries has influenced research and policy the scope for size economies in consumption cautions against this view we find that the correlation between poverty and size vanishes in pakistan when the size elasticity of the cost of living is about 0 6 this turns out to be the elasticity implied by a modified version of the food share method of setting scales by contrast some measures of child nutritional status indicate an elasticity of unity consideration of the weight attached to child versus adult welfare may help resolve the non robustness of demographic profiles of poverty excerpt

fundamental irreversibilities in stock externalities abstract this paper concerns the irreversibility effect in stock externalities in an environment of uncertainty with learning taking place one may wish to under emit today to avoid potential environmental irreversibilities alternatively one may wish to under invest in pollution control capital avoiding investments in sunk capital that turn out to be wasted the paper develops theoretical results on the tension between these two effects and separates risk aversion from the irreversibility effect the paper also presents a simple example in climate change policy

strategic information manipulation in duopolies abstract this paper studies a duopoly market in which firms can draw inferences concerning uncertain market demand from observations of their outputs and market price firms may adjust their outputs away from myopically optimal levels to affect the informativeness of the market price because firms quantities are observed firms can manipulate the extent to which belief revision occurs rather than the direction in which beliefs are revised as in signal jamming models we develop conditions and present examples under which the value of information is positive and negative and under which firms will increase or decrease quantity to manipulate information journal of economic literature classification numbers d80 l13

carbon pricing effectiveness and equity abstract the 2015 paris agreement adopted the goal of limiting the rise in global mean temperature to 1 5 2 c above pre industrial levels carbon pricing can play a key role in meeting this objective a cap and permit system or alternatively a carbon tax indexed to a fixed emission reduction trajectory not only can spur cost effective mitigation and cost reducing innovation but also crucially can ensure that emissions are held to the target level the carbon prices needed to meet this constraint are likely to be considerably higher however than existing prices and conventional measures of the social cost of carbon this poses issues of distributional equity and political sustainability that can be addressed by universal dividends funded by carbon revenues

coal taxation reform in china and its distributional effects on residential consumers abstract there is an ongoing reform in coal taxation in china from a quantity based to a price based approach while the coal tax could play an important role in resource conservation and air pollution reduction its distributional effect is not well studied this paper investigates the distributional effect of china s coal taxes on households before and after the reform we find that about 30 percent of rural households and six percent of urban households are directly affected by the coal taxes and that the directly affected households tend to be poor we also find that provinces are affected differently by the coal taxes the provinces that are more affected tend to have lower household income by the suits index we find that both the quantity based and price based coal taxes are regressive for residential consumers in china and that the coal taxation reform had little effect on the regressivity of the coal tax by simulation we find that the regressivity of the coal tax could be reduced if the tax rate were set to be positively correlated with provincial household income

regulation with anticipated learning about environmental damages a regulator anticipates learning about the relation between environmental stocks and economic damages for a model with linear quadratic abatement costs and environmental damages and a general learning process we show analytically that anticipated learning decreases the optimal level of abatement at a given information set if learning causes the regulator to eventually decide that damages are higher than previously thought learning eventually increases abatement learning also favors the use of taxes rather than quotas using a model that is calibrated to describe the problem of global warming we show numerically that anticipated learning causes a significant reduction in first period abatement and a small increase in the preference for taxes rather than quotas even if the regulator s initial priors about environmental damages are much too optimistic he is able to learn quickly enough to keep the expected stock trajectory near the optimal trajectory

the impact of international forces on the chinese wind power industry abstract the chinese wind power industry has achieved remarkable growth in the last two decades the total installed capacity of wind power in china has now surpassed that of the united states thereby making it the country with the largest installed wind power capacity in the world the independent and innovative capability of chinese wind turbine manufacturers has undergone continuous improvement and has now reached the point where the country has the capability to produce large scale wind turbines although the chinese domestic policy incentive has played a significant role in the rapid development of the chinese wind power industry the contribution made by external international forces should not be overlooked this research aims to establish a comprehensive model reflecting the international forces that impact on the chinese wind power industry this model consists of three subsystems i e 1 the international cooperation subsystem 2 the clean development mechanism cdm subsystem and 3 the import export subsystem using the model as part of the research the findings suggest that for the international cooperation subsystem joint research and development rd however its effect in terms of the diffusion of technical information and technical capability is weak similarly the degree of dependence of chinese wind turbine manufacturing on imports is weakening as domestic wind turbine manufacturers actively explore overseas markets this comprehensive model helps both international and domestic wind power investors to understand the impact of international forces on the chinese wind power industry resulting in better investment decisions and the consequential minimization of risk

distributional biases in the analysis of climate change abstract the economic analysis of global warming is dominated by models based on optimal growth theory these representative agent models have an intrinsic distributional bias in favor of the rich the bias is compounded by the use of revenue neutrality in the allocation of emission permits the result is mitigation recommendations that are biased downwards

the impact of chinese carbon emission trading scheme ets on low carbon energy lce investment china is planning to introduce emission trading scheme ets to decrease co2 emission as low carbon energy lce will play a pivotal role in reducing co2 emissions our paper is to assess the extent and the conditions under which a carbon ets can deliver lce investment in china we chose wind technology as a case study and a real option based model was built to explore the impact of a number of variables and design features on investment decisions e g carbon and electricity price carbon market risk carbon price floor and ceiling and on grid ratio we compute critical values of these variables and features and explore trade offs among them according to our work a carbon ets has a significant effect on wind power plant investment although it cannot support investment in wind power on its own carbon price stabilization mechanisms such as carbon price floor can significantly improve the effect of carbon ets but the critical floor to support investment is still much higher than the carbon price in china pilot etss our results show that other policy measures will be needed to promote low carbon energy development in china

estimates from a consumer demand system implications for the incidence of environmental taxes abstract most studies suggest that environmental taxes are regressive making them less attractive policy options we consider the distributional effects of a gasoline tax increase using four incidence measures and under three scenarios for gas tax revenue use to incorporate behavioral responses we use consumer expenditure survey data to estimate a consumer demand system that includes gasoline other goods and leisure our estimates confirm that when revenues are not recycled a gasoline tax is regressive use of incidence measures that ignore demand responses however will substantially overstate this regressivity in contrast the differences between the equivalent variation and easier to implement consumer surplus measures are relatively small in addition our results suggest that using the additional gas tax revenue to fund labor tax cuts makes the policy substantially less regressive while using the revenue to fund lump sum transfers actually makes it progressive

learning about environmental damage implications for emissions trading in this paper the impact of adjusting the supply of tradeable emission permits on incentives for cleaner technology adoption is examined two policy rules for adjusting the supply of permits are considered open market operations and a proportional adjustment rule under which the regulator expropriates permits from individual firms in proportion to their existing permit holdings adjustment via open market operations is neutral with respect to cleaner technology investment decisions but may be politically difficult to implement the proportional adjustment rule is also neutral with respect to investment decisions and at the same time allows more flexibility from a political perspective

growth under uncertainty with experimentation abstract we introduce bayesian learning into a stochastic growth model and study the effect of experimentation on the optimal level of the investment decision and on the amount of information gathering when more investment produces more information experimentation can push towards a lower level of investment thus reducing information acquisition symmetrically when more investment reduces information experimentation can increase investment and again decrease information gathering these results run contrary to intuitions generated by the standard literature on experimentation

china s wind power industry policy support technological achievements and emerging challenges abstract since 2005 the chinese wind power technology industry has developed rapidly with china becoming the largest installer of wind power capacity in the world in 2010 this paper reviews the policy system implemented in china to support the wind power industry centered on china s 2005 renewable energy law it examines the industry s achievements over the past two decades including the development of wind power technology and equipment the utilization of china s wind power resources and the cost reductions achieved it then explores the obstacles affecting the ongoing sustainability of the chinese wind industry including regulatory barriers grid integration challenges and challenges to continued technological innovation it recommends that integration challenges be addressed through policy reforms establishing interconnection standards and creating predictability with forecasting and storage that market signals be established with long term development goals and pricing reforms and that industry limitations be addressed with targeted r d improved wind resource assessment and transparency domestic and international collaborations and the cultivation of a skilled workforce

the effect of carbon tax on farm income evidence from a canadian province british columbia bc introduced north america s first carbon tax in 2008 an analysis of the impact of the bc carbon tax is of interest to various stakeholders in the jurisdiction where the tax was implemented other canadian provinces and other countries contemplating a carbon tax policy are looking for insights on how to optimize potential positive and negative consequences given that government agri environmental policies often emphasize farm level support and environmental performance there is interest in understanding the farm level impacts of the carbon tax the effect of the bc carbon tax on farm income and related production cost variables is investigated panel data from 2000 to 2015 are analyzed using both tabular and econometric approaches of the difference in difference method the results indicate that the carbon tax is associated with a decline in net farm income to receipts ratios ranging between 8 and 12 cents per dollar of farm receipts the analysis for costs to receipts ratios suggest that the carbon tax is directly related to higher commercial feed costs farm labour costs interest costs and depreciation costs results of the regression analysis indicate that all the carbon tax effects are highly statistically significant these findings can inform policy discussions about carbon tax effects on farmers

learning and stock effects in environmental regulation the case of greenhouse gas emissions abstract this paper concerns the optimal regulation of greenhouse gases that lead to global climate change in particular we focus on uncertainty and learning which over time resolves uncertainty we present an empirical stochastic model of climate economy interactions and present results on the tension between postponing control until more is known vs acting now before irreversible climate change takes place uncertainty in our model is in the damage caused by global warming the results suggest that a temporary carbon tax may dominate a permanent one because a temporary tax may induce increased flexibility

exchange rate fiscal and agricultural policies in africa does adjustment hurt the poor abstract trade exchange rate fiscal and agricultural sector policy reforms are the pillars of structural adjustment programs in africa results indicate that trade and exchange rate reforms are associated with a large decline in economic rents and a shift in relative prices that favor the rural and urban poor fiscal reforms have not brought about draconian belt tightening measures although the incidence of public spending particularly in the social sectors and in terms of public sector employment remains far from progressive reduction of export crop taxation contributes to higher incomes for the poor and domestic food crop liberalization has not led to increases in purchase prices of staple commodities for most low income households

barriers and opportunities of using the clean development mechanism to advance renewable energy development in china studying the barriers and opportunities of using clean development mechanism cdm to advance renewable energy deployment in china has a practical significance to achieve its ambitious renewable energy plan which affects the global efforts to curb carbon emission this paper analyses the role of cdm in promoting renewable energy development in china by reviewing the cdm activities especially renewable energy cdm activities in china there are three barriers to utilizing cdm for renewable energy deployment namely the dilemma of additionality lower proportional certified emission reduction credit revenues on the investment and the lack of incentive for technology transfer whereas the opportunities of using cdm in promoting renewable energy development include the international carbon market redirection to renewable energy chinese renewable energy boom driven by a series of effective energy policies and additional finance from cdm supporting chinese renewable energy development based on the study on the barriers and opportunities the article considers that cdm is an indispensable incentive and a viable choice to promote renewable energy deployment in china crown copyright c 2010 published by elsevier ltd all rights reserved

inflation variability and gradualist monetary policy this paper considers the optimal approach to reducing inflation when the cost of inflation is its conditional variability inflation is stochastically related to money growth with unobservable time varying autonomous and induced components a sharp reduction in money growth provides information about the responsiveness of inflation to money but also induces variability as the economy heads into unknown territory gradual policy is always optimal and the model explains why moderate inflation countries adopt a much more gradual money growth reduction than high inflation countries additionally the analysis sheds light on the more general problem of learning with two unobservable parameters

wind farm investment risks under uncertain cdm benefit in china abstract china has set an ambitious target to increase its wind power capacity by 35 gw from 2007 to 2020 the country s hunger for clean power provides great opportunities for wind energy investors however risks from china s uncertain electricity market regulation and an uncertain energy policy framework mainly due to uncertain clean development mechanism cdm benefits prevent foreign investors from investing in china s wind energy the objectives of this paper are to 1 quantify wind energy investment risk premiums in an uncertain international energy policy context and 2 evaluate the impact of uncertain cdm benefits on the net present values of wind power projects with four scenarios this study simulates possible prices of certified emissions reductions cers from wind power projects project net present values npvs have been calculated the project risk premiums are drawn from different and uncertain cer prices our key findings show that uncertain cdm benefits will significantly affect the project npvs this paper concludes that the chinese government needs revising its tariff incentives most likely by introducing fixed feed in tariffs fits and re examining its cdm granting policy and its wind project tax rates to facilitate wind power development and enable china to achieve its wind energy target

carbon tax incidence on household demand effects on welfare income inequality and poverty incidence in thailand abstract studying the impact of a carbon tax on household demand can be relevant in terms of securing public acceptance of a carbon tax and clarifying the implications for policy design this paper aims to fill a gap in the academic literature by simulating carbon tax scenarios and estimating distributional effects of the tax on household welfare income inequality and poverty rates based on household consumption in thailand the study employs a microsimulation model incorporating the economy wide effects of the tax on prices and consumers behavioral responses to changes in prices the results indicate that a carbon tax is progressive in thailand under revenue recycling scenarios by expanding social transfer programs when carbon tax revenues are recycled through pensions for elderly people the carbon tax could reduce the poverty rate and improve the welfare of households in the lowest quintile the results imply that the distributional impacts of environmental taxes could result in favorable outcomes for income inequality and poverty reduction in developing countries

a value function arising in the economics of information abstract the value function for a problem in the economics of the optimal accumulation of information is calculated as a fixed point of a contraction mapping by direct numerical iteration the optimal policy function is obtained as is the function defined as the sum of current expected reward and the discounted expected value of following the optimal policy in the future the optimal policy function is shown to be sensitive to the discount factor indeed for large values of the discount factor weighting the future heavily the policy function has a break and the value function is apparently not differentiable

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

are co2 taxes regressive evidence from the danish experience abstract denmark today carries one of the heaviest environmental tax burdens in the world bringing in around 10 of public revenues while evaluations have shown that the danish co 2 and other environmental taxes work as an effective measure to reduce emissions a considerable barrier to increased use of these instruments today seems to be a widespread perception of their socially adverse effects in this article it is demonstrated that co 2 taxes imposed on energy consumption in households as well as in industry do in fact tend to be regressive and therefore have undesirable distributional effects this holds especially for taxes imposed directly on households to analyze this we apply national consumer survey statistics in combination with input output tables

poverty and distributional effects of carbon pricing in low and middle income countries a global comparative analysis abstract even though concerns about adverse distributional implications for the poor are one of the most important political challenges for carbon pricing the existing literature reveals ambiguous results for this reason we assess the expected incidence of moderate carbon price increases for different income groups in 87 mostly low and middle income countries building on a consistent dataset and method we find that for countries with per capita incomes of below usd 15 000 per year at ppp adjusted 2011 usd carbon pricing has on average progressive distributional effects we also develop a novel decomposition technique to show that distributional outcomes are primarily determined by differences among income groups in consumption patterns of energy rather than of food goods or services we argue that an inverse u shape relationship between energy expenditure shares and income explains why carbon pricing tends to be regressive in countries with relatively higher income since these countries are likely to have more financial resources and institutional capacities to deal with distributional issues our findings suggest that mitigating climate change raising domestic revenue and reducing economic inequality are not mutually exclusive even in low and middle income countries

statistical inference for the measurement of the incidence of taxes and transfers we establish the asymptotic sampling distribution of general functions of quantile based estimators computed from samples that are not necessarily independent the results provide the statistical framework within which to assess the progressivity of taxes and benefits their horizontal inequity and the change in the inequality of income which they cause by the same token these findings characterise the sampling distribution of a number of popular indices of progressivity horizontal inequity and redistribution they can also be used to assess welfare and inequality changes using panel data and to assess poverty when it depends on estimated population quantiles we illustrate these results using micro data on the incidence of taxes and benefits in canada

the distributional implications of a carbon tax in ireland we study the effects of carbon tax and revenue recycling across the income distribution in the republic of ireland in absolute terms a carbon tax of 20 tco2 would cost the poorest households less than 3 week and the richest households more than 4 week a carbon tax is regressive therefore however if the tax revenue is used to increase social benefits and tax credits households across the income distribution can be made better off without exhausting the total carbon tax revenue

experimentation with accumulation abstract we study signal dependent experimentation in the presence of accumulation and show that the passive learner s action surprisingly coincides with the experimentor s when the unknown term is the one determining the decay rate of the stock while they differ when the parameter being learned is the one measuring the accumulation rate these results highlight the importance of the dynamic structure of the problem in signal dependent experimentation moreover they have important consequences for the pollution accumulation debate currently in progress

lifetime incidence and the distributional burden of excise taxes this implies that low income households in one year have some chance of being higher income households in other years and significantly affects the estimated distributional burden of excise taxes this paper shows that household expenditures on gasoline alcohol and tobacco as a share of total consumption a proxy for lifetime income are much more equally distributed than expenditures as a share of annual income from a longer horizon perspective excise taxes on these goods are therefore much less regressive than standard analyses suggest this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

driving forces of residential co2 emissions in urban and rural china an index decomposition analysis abstract there exist many differences between urban and rural china among which residential co 2 emissions arising from energy consumption is a major one in this paper we estimate and compare the energy related co 2 emissions from urban and rural residential energy consumption from 1991 to 2004 the logarithmic mean divisia index decomposition analysis is then applied to investigate the factors that may affect the changes of the co 2 emissions it is found that energy intensity and the income effects respectively contributed most to the decline and the increase of residential co 2 emissions for both urban and rural china in urban china the population effect was found to contribute to the increase of residential co 2 emissions with a rising tendency however in rural china the population effect for residential co 2 emissions kept decreasing since 1998

children and household economic behavior this paper looks at some of the methodological issues that arise in modeling the effects of children on household behavior and presents some estimates for selected areas for our purposes household behavior will be taken to refer to household decisions on labor supply the allocation of expenditure to different periods and the decision as to what to do with the difference between income and expenditure i shall be concerned mainly with the effects of dependent children and i restrict attention largely to western societies excerpt

agricultural incentives in developing countries measuring the effect of sectoral and economywide policies the impact of sector specific direct and economywide indirect policies on agricultural incentives for 18 developing countries for the period 1975 84 are estimated the direct effect is measured by the proportional difference between the producer price and the border price adjusting for distribution storage transport and other marketing costs the indirect effect has two components 1 the impact of the unsustainable portion of the current account deficit and of industrial protection policies on the real exchange rate and thus on the price of agricultural commodities relative to nonagricultural nontradables and 2 the impact of industrial protection policies on the relative price of agricultural commodities to that of nonagricultural tradable goods the authors found that a in almost all cases the direct effect is equivalent to a tax on exportable goods and to a subsidy for importables b the indirect effect also taxes agriculture and dominates the direct effect and c the direct policies for both importables and exportables stabilize domestic producer prices

planning siting and the local acceptance of wind power some lessons from the french case abstract after some years of trifling development under a system of public tenders 1995 2000 french politicians progressively changed the national policy framework for feed in tariffs december 2000 and wind power development zones july 2005 the new policy framework has triggered a beginning of takeoff in wind power capacity the paper examines french wind power development in the light of two key dimensions and concepts related to wind power policy planning and siting part 1 we particularly focus on the recent french legislative debate which led to the adoption of the new policy framework part 2 the french case shows that the recourse to planning tools was not tailor made for siting issues but resulted from a political fight over the decentralization of energy policy the policy outcome which we call flexible decentralized planning is both interesting and ambiguous it is interesting in that it develops interfaces between planning tools and siting institutions it is ambiguous in that it is potentially very hierarchical the final decision power is left in state planners hands making it unpredictable the extent to which room will genuinely be provided for siting processes to take place

bayesian learning growth and pollution abstract environmental problems such as climate change have great uncertainties current expectations are that uncertainties about climate change will be resolved quickly we examine this hypothesis theoretically and computationally we consider bayesian learning about the relationship between greenhouse gas levels and global mean temperature changes a key uncertainty learning is non trivial because of a stochastic shock to the realized temperature we find theoretically the expected learning time which is related to the variance of the shock and the emissions policy implying a tradeoff between the benefits of controlling emissions and information we imbed the learning model into an optimal growth model with a climate sector and solve the resulting dynamic program we find computationally that learning takes on average over 90 yr far longer than currently believed

distributional effects of a carbon tax on chinese households a case of shanghai abstract as an effective policy instrument to reduce co 2 emissions the effects of a carbon tax on distribution have been the critical factor in determining whether a carbon tax will be acceptable in china taking shanghai as an example which is the economic center and front runner of china this paper estimates the distributional effect of a carbon tax on households in various income groups by using the input output model and the suits index the results indicate that the comprehensive distributional effect of the carbon tax is regressive the expenditure of the low income group caused by the carbon tax accounts for 0 853 of the total expenditure while that of the high income group 0 712 the direct distributional effect presents a weak progressivity while the indirect one is significantly regressive and the latter is much larger than the former moreover the suits index of the carbon tax is 0 078 implying that the carbon tax burden on the low income group is the highest and thus that a carbon tax can intensify income inequality therefore when introducing a carbon tax some rational associated redistribution or compensation measures such as purposive transfer payments should be implemented to restrict or even eliminate the regressivity of the carbon tax

guidelines on searching for a dalton improving tax reform an illustration with data from indonesia this article documents the search for a dalton improving tax and expenditure reform using a methodology developed by yitzhaki and slemrod 1991 and mayshar and yitzhaki 1995 the methodology overcomes the need to define a specific social welfare function by searching instead for reforms that improve each social welfare function belonging to a wide class of functions the authors apply the method to the energy sector of indonesia ignoring distributional constraints and find that both the subsidy on kerosene and the tax on gasoline should be reduced but taking distributional concerns into account the present structure of energy taxes is reasonable and the country may benefit by increasing the subsidy to kerosene taxing electricity and reducing the gasoline tax these conclusions are robust to changes in the relevant parameters representing the indonesian economy

learning by doing and the value of optimal experimentation abstract recent research on learning by doing has provided the limit properties of beliefs and actions for a class of learning problems in which experimentation is an important aspect of optimal decision making however under these conditions the optimal policy cannot be derived analytically because bayesian learning about unknown parameters introduces a nonlinearity in the dynamic optimization problem this paper utilizes numerical methods to characterize the optimal policy function for a learning by doing problem that is general enough for practical economic applications the optimal policy is found to incorporate a substantial degree of experimentation under a wide range of initial beliefs about the unknown parameters dynamic simulations indicate that optimal experimentation dramatically improves the speed of learning and the stream of future payoffs furthermore these simulations reveal that a policy which separates control and estimation and does not incorporate experimentation frequently induces a long lasting bias in the control and target variables while these sequences tend to converge steadily under the optimal policy they frequently exhibit non stationary behavior when estimation and control are treated separately

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

dealing with surplus emissions in the climate negotiations after copenhagen what are the options for compromise abstract this paper analyses the environmental and financial consequences of various strategies of dealing with surplus emission allowances in the aftermath of the copenhagen accord this topic remains relevant in particular with respect to the russian negotiation position as this country is the largest holder of surplus emissions it is concluded that not addressing the surplus problem is not a feasible negotiation option as the sheer size of the surpluses would jeopardise the environmental integrity of any future agreement cancelling surpluses against russia s will though viable is not desirable as it might well lead to this country opting out of this climate treaty three options for compromise have been selected and analysed here 1 stricter targets for annex i countries 2 strategic reserve for russia 3 institutionalising optimal banking it is concluded that whereas option 1 is environmentally the best in the present political context it is probably less feasible the other two options although environmentally suboptimal seem politically more favourable our analysis suggests that maximal revenues for surplus holding countries arise by releasing only a limited amount of surplus credits to the market the institutionalisation of this effect could be a key lever to a politically feasible agreement on surplus emissions

the influence of aggregation on the ordering of distributions researchers often compare distributions using some criterion or other of inequality poverty or welfare it is standard practice to base such comparative analysis on aggregated data but will the results obtained be dependent on the degree of aggregation of the data this paper argues on the basis of a simulation study that they will be since the probability of obtaining a ranking can increase rapidly with the degree of aggregation aggregation exaggerates the differences between similar distributions and overlooks crossings at the lower tail a change in research strategy is warranted aggregation should be avoided where possible copyright 1996 by the london school of economics and political science

tax incidence in madagascar an analysis using household data this article discusses tax incidence in madagascar and asks who pays the taxes that finance government spending its main concern is to identify the progressivity of different taxes levied in madagascar based on the consumption and income patterns found in the 1994 enquete permanente aupres des menages a nationally representative survey the results suggest that most taxes are progressive meaning that wealthy households pay proportionately more of these taxes relative to their expenditures than do poor households two notable exceptions are taxes on kerosene and export duties on vanilla both of which are regressive these results are consistent with those of a study of ghana the only other comparable research on tax incidence in africa that study found taxes on kerosene and cocoa exports to be the most regressive taxes in ghana making firm policy recommendations for tax reform would require an analysis of the economic efficiency and administrative efficacy of different taxes to complement this article s work on their equity implications nevertheless the results suggest that the movement away from trade taxes especially export duties and toward broadly based value added or income taxes would be more equitable and more economically efficient the only legitimate impediment to such reforms in madagascar is administrative that is the government s ability to collect different taxes effectively although administrative efficiency may be a problem for value added or income taxes taxes on petroleum products except kerosene are highly progressive and provide a good tax handle