Neutral carbon tax and environmental targets in Brazil

We evaluate the effects of a carbon tax in the Brazilian economy using an input–output framework. First, we consider the impacts of a carbon tax of US$ 10 and US$ 50/metric ton of CO₂ equivalent. As usual, the adoption of the carbon tax generates adverse effects on GDP, wages and jobs in the short term, but reduces emissions and generates new government revenues, especially in the case of the greater tax. Second, we consider a broader tax system reform. In this reform, we replace distortionary taxes by a tax on value added. To compensate for the loss of government revenue, we assume a carbon tax with equivalent revenue. We find that the net effect is a GDP increase of 0.47%, the creation of 533 thousand jobs and reduction of 1.6 million tons of CO₂ emissions. Both scenarios exempt exports and levy imports to correct adverse effects on the country’s competitiveness.     

Using input–output models to estimate sectoral effects of carbon tax policy: Applications of the NGFS scenarios

The Network of Central Banks and Supervisors for Greening the Financial System (NGFS) has engaged in scenario analysis that estimates a $200/ton carbon tax would be required to transition to net zero carbon by 2050. Using a $200/ton carbon tax as a base, this paper uses input–output (IO) modeling to generate price and revenue effects of a carbon tax. Results from these models, which can only be interpreted as the short-run, upper-bound effects of the carbon tax policy, imply that in response to a $200/ton tax on CO₂e emissions, carbon-intensive industries, such as agriculture, extraction, transportation, utilities, and chemicals, may experience price increases in the range of 10-30 percent. Other industries will also experience price increases, but to a lesser degree, due to increased input costs associated with the tax. In addition, modeling results also suggest that industries facing elastic pricing regimes may face similar-sized declines in revenues as a consequence of the carbon tax. Rank-ordered impact results from these models can be utilized by bank supervisors and firms to adequately plan for sectoral-level transition risk within their lending and/or investment portfolios.     

Taxing air pollutants and carbon individually or jointly: results from a CGE model enriched by an emission abatement sector

We analyse the separate and collective impacts of emissions taxation to understand the internalisation effects of externalities. The analysis is carried out using a static computable general equilibrium model, with unemployment, bottom-up abatement technologies represented by a step function, and detailed emission coefficients. Environmental and health external costs are quantified using the ExternE’s Impact Pathway Approach. Emissions, as a result of environmental taxation, fall through reduced output, production factor substitution, and increased end of pipe abatement activity. The analysis shows that a full internalisation of environmental externalities can result in modest overall economic and environmental welfare gains. There are, however, differences in terms of employment and output, depending on what combination of taxes are applied, which sectors are covered, and how fiscal revenues are redistributed. Air quality benefits range from €35–75 per ton of CO₂ abated. Total environmental benefits always exceed GDP loss and the associated welfare loss.     

What is the potential impact of a taxation system reform on carbon abatement and industrial growth in China?

Economists have long argued that market-based environmental policy such as an environmental tax is beneficial to abate pollution emissions. This study aims at investigating the impact of carbon tax levy on carbon dioxide (CO₂) abatement and industrial growth in China. To this end, the marginal abatement cost (MAC) of industrial CO₂ emissions is estimated as the benchmark of setting the carbon tax rate by using the directional distance function (DDF). This paper employs the polynomial dynamic panel model to forecast the impact of carbon tax levy on target variables such as sectoral value-added and CO₂ intensity. The results reveal that the levy of a CO₂ tax has a negative impact on industrial output only in the short term. In the long term, the impact of CO₂ tax levy on output will become positive. The levy of a CO₂ tax is always beneficial to reduce CO₂ intensity. Corresponding policy suggestions for an environmental taxation system reform are given in the concluding section.     

Modeling the Transition from Enhanced Oil Recovery to Geologic Carbon Sequestration

Policy debates suggest a future role for geologic carbon sequestration. As geologic sequestration (GS) evolves from enhanced oil recovery operations to an emissions‐mitigation option, regulations must evolve to manage the risks of carbon dioxide (CO₂) migration. We develop an engineering‐economic model to understand the key deployment pathways in this transition. Major results reveal that dedicated CO₂ storage in aquifers is associated with the greatest net revenues under only a limited number of scenarios. This finding suggests that regulators should anticipate GS operations in reservoirs that were not initially intended as GS operations and, therefore, may have higher leakage rates. Copyright © 2013 John Wiley & Sons, Ltd.     

Mitigating climate change – how do corporate strategies differ?

Many companies are facing increasing pressure by governments, shareholders and other stakeholders to reduce their CO₂ emissions in order to mitigate climate change. The importance of managing CO₂ emissions and crafting adequate CO₂ strategies has increased for those companies affected. We present a framework that conceptualizes a company's CO₂ strategy as the focus on one or a combination of several strategic objectives: CO₂ compensation, CO₂ reduction and carbon independence. In order to investigate the CO₂ strategies of a worldwide sample of 91 electricity producers we perform a content analysis of their answers to the Carbon Disclosure Project (CDP). We demonstrate the measures the companies take to manage their emissions, the CO₂ strategies they adopt and antecedents that influence these strategies. We find that half of the companies take parallel emission management measures that aim at all three strategic objectives, while the other half pursue selected objectives only. We also find that companies with different CO₂ strategies significantly differ in terms of regional affiliation, company size and absolute amount of CO₂ emissions, while we could not identify a significant difference in relative CO₂ emissions. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Optimizing regional allocation of CO2 emissions considering output under overall efficiency

Reduction of CO₂ emissions is a strategic priority for the construction industry, however current schemes do not provide the level of performance that is required. There is also a lack of understanding of how to allocate CO₂ emissions targets within regions. Therefore, this research study develops a three-stage empirical system to identify the CO₂ emissions allocation scheme for the Chinese construction industry at the provincial level. The results indicate that (a) the construction industry's CO₂ emissions need to be reduced by ca. 10% from the base level in 2017; (b) 86.7% of the provinces have a relatively large capacity for CO₂ emissions reduction; (c) China's East region accounts for 44.0% of the total amount for CO₂ emissions reduction; and (d) about one-third of the provinces face enormous pressure to reduce CO₂ emissions by more than 10% on the base of 2017. This research study provides unique insights and guidance to support assessment of the regional allocation of CO₂ emissions for the construction industry, which is a valuable reference for other countries and industries.     

Estimating the effect of a gasoline tax on carbon emissions

Recently the proposal has been made to raise gasoline taxes in the United States to curb carbon emissions. The existing literature on the sensitivity of gasoline consumption to changes in price may not be appropriate for evaluating the effectiveness of such a tax. First, most of these studies fail to address the endogeneity of gasoline prices. Second, the responsiveness of gasoline consumption to a change in tax may differ from the responsiveness of consumption to an average change in price. We address these challenges using a variety of methods including traditional single‐equation regression models, estimated by least squares or instrumental variables methods, and structural vector autoregressions. Our preferred approach exploits the historical variation in US federal and state gasoline taxes. Our most credible estimates imply that a 10‐cent per gallon increase in the gasoline tax would reduce carbon emissions from vehicles in the United States by about 1.5%. Copyright © 2010 John Wiley & Sons, Ltd.     

Approaches to solving China’s marine plastic pollution and CO2 emission problems

Global contamination of the oceans by waste plastics is of increasing concern. Besides being the largest emitter of CO₂ in the world, China is suspected of being the largest contributor to marine plastic waste pollution. Responsible for the latter is the still inadequate management of waste in China, a significant improvement of which is necessary for addressing the issue of marine plastic pollution. Since plastics are hydrocarbons, submitting them to appropriate waste treatment/recycling technologies could contribute to mitigating the emission of CO₂, indicating the possibility of addressing the two environmental issues simultaneously. Based on the combined use of waste input–output and linear programming, we investigated options for mitigating CO₂ emissions under consideration of alternative waste treatment/recycling processes applied to waste plastics of China. It was found that of the nine processes considered, four could result in a net reduction in the emission: a win-win situation.     

Is the environment‐friendly factor attractive to customers when purchasing electric vehicles? Evidence from South Korea

In a bid to reduce greenhouse gas emissions, several countries worldwide are implementing policies to promote electric vehicles (EVs). However, contrary to expectations, the diffusion speed of EVs has been rather slow in South Korea. This study analyzes consumer preferences for the technological and environmental attributes of EVs and derives policy and environmental implications to promote market diffusion of EVs in South Korea. We conduct a choice‐based conjoint survey of 1,008 consumers in South Korea and estimate the consumer utility function using a mixed logit model considering consumer heterogeneity. Based on the consumer utility function, we analyze consumers' willingness‐to‐pay (WTP) for EV attributes such as driving range, charging method, charging time, autonomous driving function, carbon dioxide (CO₂) reduction rate, and purchase price. The results indicate that the current low acceptance of EVs is due to their relatively high price and lack of a battery charging technology that satisfies consumers' expectations of the charging method and time. One interesting finding is that Korean consumers have a relatively higher WTP for the CO₂ reduction rate of EVs than consumers in other countries; however, they do not consider CO₂ reduction over other technological attributes when choosing EVs. This implies that the rate of CO₂ reduction of EVs is not an important factor for South Korean consumers when buying EVs. We also calculate the effect of CO₂ reduction with the market penetration of EVs and find that CO₂ reduction through the diffusion of EVs depends on the country's electricity generation mix.     

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.     

A CARBON FOOTPRINT TIME SERIES OF THE UK – RESULTS FROM A MULTI-REGION INPUT–OUTPUT MODEL

The framework and results of an international multi-region input–output (MRIO) model for the UK are presented. A time series of balanced input–output tables for the UK was constructed for the period 1992 to 2004 by using a matrix balancing procedure that is able to handle conflicting external data and inconsistent constraints. Detailed sectoral and country-specific trade data for the UK were compiled and reconciled with the UK input–output data, and economic and environmental accounts for three world regions were integrated in a UK-specific MRIO model. This was subsequently used to calculate a time series of national carbon footprints for the UK from 1992 to 2004. Greenhouse gas emissions embedded in UK trade are distinguished by destination of imports to intermediate and final demand. Most greenhouse gases show a significant increase over time in consumer emissions and a widening gap between producer and consumer emissions. Net CO₂ emissions embedded in UK imports increased from 4.3% of producer emissions in 1992 to a maximum of 20% in 2002. The total estimated UK carbon footprint in 2004 was 730 Mt for CO₂ and 934 Mt CO₂ equivalents for all greenhouse gases.     

Energy consumption, CO2 emissions, and economic growth: evidence from Indonesia

Energy policy-makers in Indonesia are interested in the causal relationship between energy consumption, CO₂ emissions, and economic growth. Therefore, this paper attempts to analyze the short- and long-run causality issues between energy consumption, CO₂ emissions, and economic growth in Indonesia using time-series techniques. To this end, annual data covering the period 1965–2006 are employed and tests for unit roots, co-integration, and Granger-causality based on an error-correction model are applied. The results show that there is a bi-directional causality between energy consumption and CO₂ emissions. This means that an increase in energy consumption directly affects CO₂ emissions and that CO₂ emissions also stimulate further energy consumption. In addition, the results support the occurrence of uni-directional causality running from economic growth to energy consumption and to CO₂ emissions without any feedback effects. Thus, energy conservation and/or CO₂ emissions reduction policies can be initiated without the consequent destructive economic side effects.     

Environmental taxes,reforms and economic growth: an empirical analysis of panel data

This paper explores the relationship between environmentally related taxes and the economic growth rate. The analysis also investigates whether this relationship differs between countries that have implemented environmental tax reforms (ETRs) and those that have not. Using panel data from 31 OECD countries over the period 1994–2013, the paper finds that when we allow environmentally related tax revenues to interact with an initial level of real GDP per capita, the overall revenues of these taxes are negatively associated with the economic growth rate in the short and long term. Furthermore, we show that the higher the initial level of GDP per capita, the more environmentally related tax revenues can promote the economic growth rate. The analysis also reveals that the relationship between environmentally related tax revenues and economic growth varies between countries that have a mechanism to redistribute environmentally related tax revenues and those that do not.     

Emissions burden shifting in global value chains – winners and losers under multi-regional versus bilateral accounting

ABSTRACT

International trade leads to emissions burden shifting and threatens mitigation targets. Multiregional input–output (MRIO) and bilateral trade input–output (BTIO) models are widely used to analyse emissions embodied in trade and global value chains. Especially, the last one is used in analysing border tax adjustment (BTA) on the carbon content of imports. The model choice is not trivial. The analysis shows BTIO's inability to capture the consumer-principle throughout the production chain and its inadequacy as an option for consumption-based accounting, because it allocates emissions to the first importing country and to the sector of production, instead to the consumer (both country and region). Regarding the BTA assessment, BTIO tax domestic carbon content of direct imports, but not indirect imported carbon content. MRIO does provide incentives for mitigation in third countries. The differences in allocation of emissions and taxes’ burden of both models have different consequences for developed and undeveloped regions.     

Effects of Household Consumption Patterns on CO2 Requirements

In order to evaluate the relation between the consumption pattern of various household types and their CO₂ requirements, we combine input-output tables energy flow matrices, CO₂ emissions factors, and national consumer survey statistics into an integrated modelling framework, and relate differences in household types to differences in private consumption and again to differences in CO₂ emissions. We identify household characteristics with a significant influence on CO₂ emissions. Comparing our results with those of other studies reveals that national differences in climate and population density cause differences in the contribution to CO₂ emissions. Finally, national differences in income and expenditure elasticities of both energy and CO₂ are due to differences in the disparity in CO₂ intensities amongst commodities and to the model's assumptions on foreign technology.     

Trade Liberalization and Pollution: An Input–Output Study of Carbon Dioxide Emissions in Mexico

This paper examines the environmental effects associated with Mexico's participation in the North American Free Trade Agreement (NAFTA). The objective is to provide quantitative estimates of carbon dioxide (CO₂) emissions from changes in the level and structure of production and consumption activity in Mexico following a liberalization of trade. The quantitative analysis was performed using input–output methods with fuel use modifications to account for CO₂ emissions before and after NAFTA's implementation. As a result of NAFTA, CO₂ emissions are expected to increase from the anticipated increase in the size of the Mexican economy. While total emissions increase as a result of tariff elimination, there is also a shift in the structure of production and final consumption away from those sectors that are the most C02 intensive.     

借鉴国际经验完善我国促进循环经济发展的税收政策

循环经济是可持续发展的新兴经济增长模式,为了促进循环经济的发展,西方各国纷纷采用不同税收手段,如荷兰、丹麦、瑞典等国纷纷开征名目众多的环境税;美国联邦和地方政府分别开征不同的环境税;日本也在各不同环节开征环境税,与此同时,各国纷纷采用包括加速折旧、税收减免、税收抵免等税收优惠政策鼓励循环经济的发展,不断"绿化"本国税制。在借鉴这些经验的基础上,我国应完善立法、改革现行税制,开征新的税种,促进循环经济的发展。     

A Tale of Two Tax Jurisdictions:

ABSTRACT California's Proposition 13 and Massachusetts'Proposition 2½ attempted to shrink state and local tax burdens by reducing property taxes and limiting future tax growth. Both initially succeeded. However, following a brief lag, those governments made up lost revenues primarily through increased non-tax fees and charges; within a decade, real per capita revenues and expenditures exceeded their pre-tax revolt peaks. This development is consistent with the hypothesis that voter-initiated limits on a subset of revenue sources, intended to reduce state and local tax burdens, succeed temporarily but are then undermined by expansions in other revenue sources.     

The role of outsourcing in driving global carbon emissions

Globalisation has narrowed the gap between producers and consumers of goods and services. The linkages between international trade and carbon dioxide (CO₂) emissions have started to be recognised, yet the extent of outsourcing of emissions across nations is unknown. Filling this gap in knowledge is critical for designing effective policy mechanisms for assigning responsibility for reductions in emissions. Here we present a structural decomposition analysis of global trends in outsourcing of emissions from 1990 to 2010 for 186 individual countries. To this end, we disaggregate total CO₂ emissions for each country into contributions from the domestic economy and international trade. This allows us to unveil outsourcing trends for all nations confirming a world-wide shifting of emissions-intensive production across borders. We categorise nations into “outsourcers” – countries that outsource carbon-intensive production to so-called contractor nations. Our detailed assessment of the commodity content of global outsourcing flows reveals interesting insights about the trade of carbon-intensive commodities.