Analyzing the distributional effects of fuel taxation in China

As an effective policy instrument to reduce energy consumption and CO₂ emissions, the effects of fuel taxation on income distribution have been the critical factor that determines whether a fuel tax could be acceptable in China. This paper estimates the distributional effects of a fuel tax on households in various income groups by using the input-output model. Results indicate that the total distributional effects of fuel taxes are moderately progressive; that is, high-income households would bear more tax burden compared to low-income households. In addition, the indirect effects are larger than the direct effects. Moreover, the Kakwani and Suits indices show that fuel excise taxes are progressive, implying that a fuel tax could improve the unfair income distribution. In order to reduce the negative impact of fuel taxes on low-income households, it is necessary for the government to design a reasonable redistribution mechanism of tax revenue or adopt compensatory measures such as the transfer payments targeted on low-income groups.     

Evaluation of fuel options for a commercial mhd plant in India

The choice of fuels for a commercial open-cycle MHD generator is not as simple as for a conventional plant. After the commissioning operations and the power runs of the Indian pilot MHD plant, the question of early commercialization is being debated. In this context, this paper looks at the spectrum of fossil fuels available in India and evaluates their relative suitability for commercial MHD generators. The attainable plasma temperature, electrical conductivity and the available fuel energy at the combustor outlet are taken as the comparison yardsticks. Standard operating parameters for commercial installations have been assumed. The comparison, which in the Indian context has been limited to coal-based fuels and natural gas, indicates the latter as the fuel of choice followed by gasified coal.     

Cooking fuel use patterns in India: 1983–2000

This study analyses the expenditure share of ‘clean’ and ‘dirty’ fuels in total cooking fuel consumption for the rural and urban households across 16 major states in India, using household level data from national sample surveys conducted during the period 1983–2000. The results show wide disparity between rural and urban households and also across states. Analysis to identify the determinants of fuel choice reveals that affordability plays a major role, while the pro-rich and pro-urban bias of kerosene supply through public distribution system also has influenced the observed variation in consumption patterns across states and over rural and urban areas. The study discusses the policies that could facilitate switch towards ‘clean’ fuels and argues that enabling policies should pay attention among other things to the gender issues and trade-offs that exist between say, local and global pollution, deforestation and resource depletion, and disease and subsidy burden.     

Reforming fossil fuel prices in India: Dilemma of a developing economy

Over the period between 1990–1 and 2012–3, fossil fuel use on farms has risen and its indirect use in farming, particularly for non-energy purposes, is also growing. Consequently, both energy intensity and fossil fuel intensity are rising for Indian agriculture. But, these are declining for the aggregate Indian economy. Thus, revision of fossil fuel prices acquires greater significance for Indian agriculture than for rest of the economy. There are significant differences across crops. The crop-level analysis is supplemented by an alternative approach that utilizes a three-sector input–output (I–O) model for the Indian economy representing farming, fossil fuels, and rest of economy. Fossil fuels sector is assessed to portray, in general, strong forward linkages. The increase in total cost of farming, for a given change in fossil fuel prices, is estimated as a multiple of increase in direct input cost of fossil fuels in farming. From the three-sector aggregated economy this multiple was estimated at 3.99 for 1998–9. But it grew to 6.7 in 2007–8. The findings have stronger ramifications than commonly recognized, for inflation and cost of implementing the policy on food security.     

Modeling fuel efficiency for heavy duty vehicles (HDVs) in India

Transport sector accounts for almost 70% consumption of diesel in India. With increased dependency on road transportation for freight transport, there is a need to develop fuel-efficiency standards for the heavy duty vehicles (HDVs). This study models the fuel efficiency of the existing fleet of HDVs and compares it with the world’s best practices. The model uses the technical details of the existing HDV fleet and the prescribed driving cycles to assess fuel efficiency. The results of the model are validated with the actual test results of fuel efficiency observed for HDVs in India. The model presents a fuel economy of 2.65 km/l for truck and bus model of given specification. The validated model is then used for evaluating the potential of different strategies to improve fuel efficiency. The models estimate a potential of about 36% improvement in the fuel efficiency in the HDVs in India through improvements in thermal efficiency, reduction in rolling resistance, and reduction in vehicle weight. The study provides a direction for the possible fuel efficiency improvements in HDV sector in India.     

Communication on energy: The Norwegian taxation debate

A working group of the Norwegian Ministry of Finance has recently produced a report on possible structural changes to the fiscal system applied to petroleum exploitation. This report recommended that two types of changes be seriously examined and the oil companies have recently presented their views on these proposals. Here a comparison is made between the two proposed systems and the current one as applied to very marginal fields. The comparative effects on investors depend on the size of discount rate employed and the proportion of debt finance utilized. It is unlikely that the proposed changes will significantly improve incentives to develop marginal fields.     

Petroleum taxation. The effect on recovery rates

Petroleum tax design analysis usually abstracts from the fact that taxation affects not only project selection but also concept design and drainage strategy, and thereby the extraction and recovery rate. The implicit assumption is that oil companies are unresponsive to tax changes where concept selection and production decisions are concerned. In his novel approach, Smith (2014) develops a broader model which accounts for the additional effects. This provides a consistent framework which permits analysis of specific settings. Berg et al. (2018) apply the model to establish the effect of a reduction in uplift on the Norwegian continental shelf (NCS) and find, for this case, that the traditional assumption of an unresponsive company still holds.Analysing field data from the NCS, we find that the actual production profiles do not resemble the mathematically tractable theoretical model of a constant decline in production used in Smith (2014) and Berg et al. (2018), and we explain why this is the case for offshore fields. We propose a novel theoretical resource model which fits the data from the 92 largest fields on the NCS. It is a general resource model that allows for injection from start of production, and where the model of a constant decline in production is a special case. Our model is also a mathematically tractable model of constant decline, but where the decline is at the level of the individual well rather than the field. The recovery rate is thus responsive to the number of wells, and tax design affects the recovery rate. Our findings suggest that companies are responsive, and that tax design should take account of distortions in the selection of development concepts.     

An empirical study on intention to use hydrogen fuel cell vehicles in India

Demand-side strategies for alternative energy like hydrogen require a thorough understanding of the potential customers' preferences and demand drivers. Multiple studies regarding users' attitudes, intentions, and behavior have been done towards electric vehicles in India, but none so far on hydrogen fuel cell vehicles (HFCVs). Our purpose is to inquire about the key parameters influencing the intention to use HFCVs in India. This empirical research using an online questionnaire was distributed and responses of 483 prospective customers received. To ascertain the users' intentions toward HFCVs, we applied a structural equation modelling approach through Smart-PLS 3.0. We find that perceived benefit, perceived risk, and policy interventions significantly influence the users' intention to adopt HFCV in India. The study suggests that the government must bring together the stakeholders, including automobile manufacturers, hydrogen producers, research institutions, and funding institutions, to address the bottlenecks to fast-track the hydrogen mobility system.     

CO2 emissions reduction by price deregulation and fossil fuel taxation A case study of Indonesia

As environmental issues, and the issue of global warming in particular, rise to the top of the international agenda, developing nations are faced with a major question: how to confront these environmental problems and simultaneously address a number of more pressing developmental imperatives? This paper tries to answer that question on a limited scale using Indonesia as a case study. The study indicates that by deregulating energy prices and imposing different levels of taxation on fossil fuels, Indonesia could reduce its CO₂ emissions without considerably suppressing the growth of its economy. In the long run, however, these policies cannot cope with the inevitable rise in coal-use in Indonesia, due to constraints on domestic natural gas and oil resources. Limiting the growth of coal consumption in the future will require direct technological intervention in the supply and demand of energy and a shift in current energy export and import policies.     

Life cycle assessment of Jatropha biodiesel as transportation fuel in rural India

Since 2003 India has been actively promoting the cultivation of Jatropha on unproductive and degraded lands (wastelands) for the production of biodiesel suitable as transportation fuel. In this paper the life cycle energy balance, global warming potential, acidification potential, eutrophication potential and land use impact on ecosystem quality is evaluated for a small scale, low-input Jatropha biodiesel system established on wasteland in rural India. In addition to the life cycle assessment of the case at hand, the environmental performance of the same system expanded with a biogas installation digesting seed cake was quantified. The environmental impacts were compared to the life cycle impacts of a fossil fuel reference system delivering the same amount of products and functions as the Jatropha biodiesel system under research. The results show that the production and use of Jatropha biodiesel triggers an 82% decrease in non-renewable energy requirement (Net Energy Ratio, NER = 1.85) and a 55% reduction in global warming potential (GWP) compared to the reference fossil-fuel based system. However, there is an increase in acidification (49%) and eutrophication (430%) from the Jatropha system relative to the reference case. Although adding biogas production to the system boosts the energy efficiency of the system (NER = 3.40), the GWP reduction would not increase (51%) due to additional CH₄ emissions. For the land use impact, Jatropha improved the structural ecosystem quality when planted on wasteland, but reduced the functional ecosystem quality. Fertilizer application (mainly N) is an important contributor to most negative impact categories. Optimizing fertilization, agronomic practices and genetics are the major system improvement options.     

International experiences of ethanol as transport fuel: Policy implications for India

The need for biofuels, particularly liquid ones like ethanol and biodiesel, for transport has been felt by most of the countries and their governments have been trying to promote these fuels. Compared to petroleum, the use of biofuels for transport is still quite low in nearly every country. By far the largest production and use is of ethanol in the United States and Brazil, where similar volumes are used—many times higher than in any other country. Even then, ethanol represents less than 3% of transport fuel in USA and a little more than 50% of gasoline demand (by volume) in Brazil. However many countries, including the USA, Canada, several European countries (and the European Union), Australia and Japan including India are considering or have adopted a variety of policies that could result in much higher biofuels use over the next decade. This paper makes an attempt to draw upon the cross-country international experiences of ethanol as transport fuel to suggest policy implications for India     

Assessment of transport fuel taxation strategies through integration of road transport in an energy system model—the case of Sweden

Road transport is responsible for a large and growing share of CO₂ emissions in most countries. A number of new fuel‐efficient vehicle technologies and renewable transport fuels are possible alternatives to conventional options but their deployment relies strongly on different policy measures. Even though a future higher use of transport biofuels and electric vehicles is likely to increase the interaction between the transportation sector and the stationary energy system (heat, power, etc.), these systems are often analysed separately. In this study, a transport module is developed and integrated into the MARKAL_Nordic energy system model. The transport module describes a range of vehicle technologies and fuel options as well as different paths for conversion of primary energy resources into transport fuels. The integrated model is utilized to analyse the impact of transport fuel tax designs on future cost‐effective fuel and technology choices in the Swedish transportation sector, as well as the consequences of these choices on system costs and CO₂ emissions. The model, which is driven by cost‐minimization, is run to 2050 with various assumptions regarding transport fuel tax levels and tax schemes. The results stress the importance of fuel taxes to accelerate the introduction of fuel‐efficient vehicle technologies such as hybrids and plug‐in hybrids. Tax exemptions can make biofuels an economically favourable choice for vehicle users. However, due to limitations in biomass supply, a too strong policy‐focus on transport biofuels can lead to high system costs in relation to the CO₂ abatement achieved. The modelling performed indicates that the effects caused by linkages between the transportation sector and the stationary energy system can be significant and integrated approaches are thus highly relevant. Copyright © 2011 John Wiley & Sons, Ltd.     

Assessing energy tax systems: The effects of energy taxation in Switzerland

The Swiss Federal Administration has recently proposed the urgent introduction of an energy tax. In this article the authors describe the range of tax structures which could be designed from various combinations of basic components. The fiscal, economic and administrative repercussions of various energy tax structures are traced through and compared with those of a value added tax. The authors examine, in particular, the effects of an energy tax in Switzerland and the interactions between such a tax and federal fiscal policies. The choice of a particular energy tax structure is a normative decision which must be left to the political process. The authors hope that this article will be useful in making such processes more transparent, more rational and more effective.     

North Sea oil taxation in Norway

Since 1963, the Norwegian government has developed a complex fiscal regime covering the activities of oil companies in the North Sea. The purpose of this article is to identify and quantify the financial effects of the fiscal system on operating companies involved in the Norwegian sector. The emphasis is on the effect of the tax package introduced by the government in the Odelsting Proposition No 26 of February 1975. The impact of the tax is not found to be well related to the profitability of fields and the sensitivity of the tax burden to key variables such as reserves, oil price, capital and operating costs and inflation is examined. The effect of quasi-fiscal measures, particularly of government participation via Statoil, is also examined.     

Assessment of the fuel wood of India: A case study based on fuel characteristics of some indigenous species of Arunachal Pradesh

Biomass in the form of fuelwood has been a source of energy for many centuries all over the world. In rural India, fuelwood remains the first choice of energy source. Arunachal Pradesh is home to many different tree species; so far most of the fuelwoods of Arunachal Pradesh have never been studied for their fuel characteristics. This study is carried out with the following objectives: (i) Identification and selection of indigenous fuelwood species, which are widely distributed throughout Arunachal Pradesh, North East India; (ii) quantitative and qualitative analysis of these fuelwoods; and (iii) to rank these fuelwoods according to their fuel value index.     

Achieving sustainable development goals through adoption of hydrogen fuel cell vehicles in India: An empirical analysis

Hydrogen is a growing facilitator for a multisectoral transition to a renewable energy-based economy. Despite this, there is negligible scholarly literature examining the connections between the hydrogen economy and the Sustainable Development Goals (SDGs) established by the United Nations. In this empirical investigation, we demonstrate a correlation between adopting Hydrogen fuel cell vehicles (HFCVs) and their direct and indirect impact on SDGs (#7, 9, 11, 12, 13,14 and 15). This empirical investigation was performed based on 358 valid sample responses from the pan-India survey. Utilising structural equation modelling, the hypotheses were tested, and the research model was validated. The findings revealed that the adoption of HFCV has a positive impact on SDGs. The results confirm that policy implications significantly change public perception regarding high cost and infrastructure readiness. Keeping the finding in mind, we recommend that the fuel retailers create more hydrogen refuelling stations across the country to ease infrastructure bottlenecks. Further, governments at various levels should provide financial benefits to green hydrogen producers, fuel cell manufacturers, HFCV manufacturers, and early adopters of HFCVs in India.     

Modelling the impact of energy taxation

Energy taxation in Sweden is complicated and strongly guides and governs district energy production. Consequently, there is a need for methods for accurate calculation and analysis of effects that different energy tax schemes may have on district energy utilities. Here, a practicable method to analyse influence of such governmental policy measures is demonstrated. The Swedish Government has for some years now been working on a reform of energy taxation, and during this process, several interest groups have expressed their own proposals for improving and developing the system of energy taxation. Together with the present system of taxation, four new alternatives, including the proposed directive of the European Commission, are outlined in the paper. In a case study, an analysis is made of how the different tax alternatives may influence the choice of profitable investments and use of energy carriers in a medium‐sized district‐heating utility. The calculations are made with a linear‐programming model framework. By calculating suitable types and sizes of new investments, if any, and the operation of existing and potential plants, total energy costs are minimized. Results of the analysis include the most profitable investments, which fuel should be used, roughly when during a year plants should be in operation, and at what output. In most scenarios, the most profitable measure is to invest in a waste incineration plant. However, a crucial assumption is, with reference to the new Swedish waste disposal act, a significant income from incinerating refuse. Without this income, different tax schemes result in different technical solutions being most profitable. An investment in cogeneration seems possible in only one scenario. It is also found that particular features of some alternatives seem to oppose both main governmental policy goals, and intentions of the district heating company. Copyright © 2002 John Wiley & Sons, Ltd.     

The effect of carbon taxation on cross-border competition and energy efficiency investments

Carbon taxes increase costs for energy-consuming firms and can impact firms‘ ability to compete with other firms located in regions without that tax. This paper considers the effect of asymmetric carbon taxation when firms are able to adjust their energy efficiency investment levels to reflect the presence of the tax. Using a dynamic model of firm competition, we find that allowing firms to adjust their energy efficiency levels in response to a carbon tax could potentially allow firms to significantly mitigate the competition effects of that carbon tax. In our baseline parameterization, additional energy efficiency investments non-trivially mitigates profit loss for the firm facing the carbon tax as well as spurring adding energy efficiency investments in the non-taxing jurisdiction, thus reducing carbon leakage. This increase in energy efficiency can potentially reduce total energy usage by the firm in the taxing jurisdiction by more than the carbon tax alone. While the quantitative impact of energy efficiency investments on firm competitiveness depends on the nature of the industry, from a policy standpoint, the ability of energy efficiency investments to mitigate cross-border emissions leakage and negative competition effects without policy interventions such as a carbon border tax softens these two common criticisms of unilateral regional carbon taxes.     

Effects of changes in UK North Sea oil taxation

Changes in North Sea oil tax structure were introduced by the UK government in mid-1979. The new system is aimed at increasing revenues to the state without damage to exploitation and production. This paper considers the effects which the new tax regime, and each of its components, will have on different types of field being exploited under various circumstances. The analysis also considers sensitivity to capital cost inflation, effects on multi-field operation and the results of two other possible tax schemes. It is found that the new tax scheme will considerably alter the structure of the tax burden and will increase the overall tax take. Marginal tax rates will also increase, not least for some fields with low expected returns. The new scheme will, however, continue to favour capital intensive exploitation techniques.     

The usage of waste hydrogen from outlet gas as a fuel in different fuel cells

This paper aims at selecting different types of fuel cells using an MINLP (mixed-integer nonlinear programming) model, whilst considering the usage of waste hydrogen from the outlet gas. Hydrogen separation from the outlet gas is a good alternative from the economical and environmental perspectives.