Environmental tax reform: an assessment of social responses in Ireland

Environmental tax reform (ETR) is widely accepted to be a policy with desirable environmental, and other economic effects. The question arises then as to why its implementation has been so patchy. There is a broad literature on the economic impact of ETR, however, there have been very few research efforts devoted to understanding the roles and imperatives of the public, policy makers, businesses and other stakeholders who are addressed by ETR. This paper examines the impediments to ETR in Ireland. Focus groups were formed comprising of members of the general public and these provided a forum for detailed reactions to the ETR concept. Interviews were conducted with policy makers and key business people in an attempt to identify both the patterns of thinking behind ETR and the main obstacles to its introduction. Having presented the results, a theory of the main impediments to ETR is developed. The opinions of the members of the public, the business community and the policy makers highlight a number of issues that need to be addressed in the future design of ETR in Ireland. The principal potential impediments to ETR include: mistrust of the government, implausibility of the policy, means of hypothecation, information asymmetries, the political system, the structure of government, the macroeconomic environment, the impact on competitiveness, inequity between sectors, regressivity, elasticities and the level of the tax, terminology, and the marketing of ETR.     

Voluntary agreements with white certificates for energy efficiency improvement as a hybrid policy instrument

In this paper we examine the implementation of a combined policy scheme that consists of a traditional instrument, the voluntary agreements (VAs), and an innovative one, the white certificates (WhC). The basic structure of this scheme is that energy suppliers who undertake an energy efficiency obligation under a white certificate scheme can make use of voluntary actions to enhance investments in innovative energy savings projects. Energy suppliers and other market parties can additionally or in parallel participate in voluntary agreements and set energy efficiency targets. For fulfilling their voluntary agreement target, these market parties can receive tax exemptions or receive white certificates that they can sell in the market. Transaction costs and baseline definition for demonstrating energy efficiency improvement deserve special attention. This policy can assist a country to enhance energy efficiency improvement while it stimulates innovation. Cost effectiveness can be higher than the case of stand-alone policy instruments, since more financing options are available for more expensive projects. Nevertheless, the added value of the scheme lies more in the implementation of innovative measures for enhanced energy efficiency. Furthermore, market parties can discover more business opportunities in energy efficiency and establish a green image; hence an integrated scheme should achieve higher political acceptability.     

Environmental and wider implications of political impediments to environmental tax reform

The most common notion of environmental tax reform (ETR) is the use of the revenue from environmental taxes to reduce distortionary labour taxes. The PETRAS project¹ has shown that there are a number of social and political impediments to implementing such reform. This paper firstly outlines some of the environmental and economic implications of environmental taxes generally. It goes on to explore three broad approaches to ETR, based on the allocation of the tax revenues, and explores the environmental and economic implications of each approach and the likelihood of political and social acceptance. Particular attention is paid to reducing regressive impacts and impacts on competitiveness. It is concluded that some combination of earmarking a proportion of revenues to environmental projects and diverting rest to reduce labour taxes is probably the best approach in light of the results of the project. The balance should depend upon local labour market and macroeconomic conditions, the extent to which environmental projects are already funded and the extent of government failure, i.e., the problems of resource allocation that occur as a result of government intervention in markets. Funding should only be provided to environmental projects if it can be shown that, in themselves, they are economically efficient. In addition, it is most important that a proportion of the funds be used to ameliorate any regressive impacts. It is also important to bear in mind that hypothecation or recycling of revenue is not the same as a tax shift, which is a reform of the entire system, so some of these approaches may take away from the integrity of ETR. The paper concludes with some of the initiatives that are likely to be necessary to facilitate social and political acceptance of this approach to ETR.     

Social and political responses to ecological tax reform in Europe: an introduction to the special issue

This paper introduces the special issue on the Policies for Ecological Tax Reform: Assessment of Social Responses (PETRAS) project about responses to ecological tax reform (ETR) in Europe. Although ETR is widely accepted to be a policy with desirable effects, its implementation has been limited by problems of political acceptability. The project aimed to address the question of how to make such a policy more acceptable. It is the first study to examine in depth the thinking of members of the general public about the ETR policies and is also the first international comparative study of the thinking of ordinary business people about ETR policies. The PETRAS project methodology was based around the use of interviews and focus groups to inform the assessment of social responses to ETR policies and the development of improved designs for them. A number of issues emerged relating to awareness, trust, understanding of the purpose, visibility, incentives, regressivity, levels of taxation, terminology, communication about ETR and the use of alternative instruments. Together with these similarities, a pattern of differences between the countries can also be seen. The final section of this paper introduces the national studies described in the following papers.     

Towards cooperative policy approaches in China—Drivers for voluntary agreements on industrial energy efficiency in Nanjing

Energy efficiency is a national priority for China as rapid energy consumption growth aggravates its greenhouse gas emissions, local air pollution and energy scarcity. In the 1990s, a large number of voluntary agreements emerged in industrialised countries in order to improve industrial energy efficiency. These experiences are now taken into account in China. This article analyses the drivers for voluntary agreements on industrial energy efficiency in China, based on a case study of three enterprises in Nanjing, Jiangsu Province. Furthermore, the article reviews the institutional set-up of energy policy and investigates the pertaining policy culture. From the findings, conclusions are drawn on the role of voluntary agreements within China's larger policy context. We conclude that opposed to avoiding stricter regulation, voluntary agreements in Nanjing are reinterpreted in view of more stringent national provisions on energy efficiency in the 11th Five Year Plan. Hence, agreements have evolved into an implementation tool of national policy at the local level. For industry, another major driver for participation was identified as improving its relations with local authorities. Voluntary agreements showed to have the potential to overcome traditional constraints of implementing top–down policies at the local level in China.     

Implementation of voluntary agreements for energy efficiency in China

Low-energy efficiency and environmental pollution have long been taken as key problems of Chinese industry, although a number of command-and-control and economic instruments have been adopted in the last few decades. In this paper, policy and legislation development for voluntary agreements were summarized. The voluntary agreements pilot project in two iron and steel companies in Shandong Province as well as other cases were analyzed. In order to identify the existing problems in Chinese cases, comparison was made between China and industrialized countries in the practices of energy efficiency voluntary agreements. Based on the analysis, detained recommendations, including the use of supporting policies for voluntary agreements, were raised. It is expected that voluntary agreements could play a more important role in energy efficiency improvement of Chinese industry.     

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.     

The effects of federal energy tax credit on the solar thermal industry and government revenue

This study shows the impact of the federal energy tax credit (ETC) on the solar thermal industry and on government revenue. The analysis examines investment in solar thermal technologies by limited partnerships. The potential for investment is determined by calculating the investment internal rate of return assuming a 30-year system life. Several scenarios are considered, including state tax credits at both 25 and 0% levels and coverage ratios of 1.2 and 1.4. This analysis indicates that private investment without federal incentives during the early stages of industry development is highly unlikely. Extension of the energy tax credit beyond 1985 is one means to establish a viable solar thermal electric industry before the year 2000. However, as the industry matures, the tax credit can be reduced while federal receipts will increase.     

Green electricity policies in the Netherlands: an analysis of policy decisions

Over the last decades, fundamental changes can be observed in both market conditions and the national policy framework for green electricity in the Netherlands. The Dutch Government has regularly intervened in markets, demonstrating fundamental shifts in policy and approach. This study aims to analyse the developments in renewable energy policy making in the Netherlands. It assesses changes in the choice of policy instruments and target groups, the role of stakeholders, and offers explanations behind policy successes and failures. Dutch green electricity policy over the last decade can be characterised roughly by three phases: in the early 1990s, the government negotiated voluntary agreements with the energy distribution sector on targets for green electricity sales, which were never met. In the second half of the 1990s, a regulatory energy tax was introduced, from which customers of green electricity were exempt. This led to a substantial increase in demand, which was largely met by green electricity imports, and did not lead to additional domestic renewable energy capacity. Finally, a change in policy has taken place recently (2003) shifting the focus from promotion of demand to the promotion of supply through a system of regulated feed-in tariffs. Despite the renewable energy policies, growth of the renewable energy market in the Netherlands has been small and targets have not been fully met. The Dutch government has not yet succeeded in substantially reducing market uncertainties and in building confidence among market parties, because the policies have not been stable and policy objectives have frequently been partly ambiguous. In addition, the influence of stakeholders in renewable energy policy making has been small which has the early acceptance and implementation of alternative policies.     

水电工程移民后期扶持项目协同推进系统及各主体的角色与职能

针对水电工程移民后期扶持项目实施过程中移民机构单方治理的局限性,基于协同学理论分析了政府各部门、电站业主、非政府组织和移民群众多元主体的关系,构建了后期扶持项目实施的协同推进系统,提出在后期扶持项目实施过程中,政府部门应通过建立领导小组以明确责任主体并加强跨部门合作;电站业主利用自身丰富的工程技术经验开发生产性项目、保护环境的可持续发展;非政府组织则通过填补功能空缺、拓展参与渠道、调解利益冲突等方式参与实施后期扶持项目;而移民利用参与主体和目标主体的双重身份,充分行权、加强监督。     

Evaluating public policy instruments in the Greek building sector

This paper applies a multi-criteria analysis (MCA) to evaluate public policy mechanisms that foster energy efficiency and renewable energy sources in the Greek building sector, based on stakeholders’ understanding and perceptions of the functionality of policy instruments. The objective is to shed light on the implementation of currently employed policy mechanisms that aim to achieve the 2020 energy savings targets and beyond, providing useful information to policy makers for future policy (re-) formulations. In this framework, policy instruments were evaluated against process-related criteria, such as implementation costs, distributional effects, and coherence of policy processes, so as to highlight successful policy practices during their implementation phase as well as to unveil cases of policy underperformance or unintended policy outcomes. To hedge uncertainties related to policy instrument selection, the method employs probabilistic evaluations of every alternative against each criterion. The MCA results showed that the country is still missing significant energy saving opportunities that could be reached through more streamlined implementation practices and political support. In times of fiscal crisis, the Greek government should also revitalize the implementation of alternative funding mechanisms and support policy alternatives such as green public procurement, voluntary agreements, and energy performance contracting.     

Reevaluating the first and the second dividends of environmental tax reforms

There is increasing global interest in market-based climate change policies following the last elections in the United States. In this context an Exxon Mobil chief executive came out in favour of a carbon tax. This paper is concerned with the welfare analysis of Environmental Tax Reforms (ETR), and takes up the claims for the need of an unambiguous and operative definition of the double dividend both for empirical purposes and political advisement. In this paper, we contest the usual definition of the second dividend and its assimilation to an “efficiency dividend”. We propose alternative definitions by suggesting a different splitting of the total welfare variation between the first and the second dividend in order to isolate the efficiency effects of the ETR. The new definitions become clearly understandable and easy for economic and policy interpretation. Concepts like “weak” and “strong” double dividend turn out to be unnecessary. Finally, we analyze ETR for the US economy to illustrate the advantages of the proposed definitions for policy implementation.     

Effects and mechanism of influence of China's resource tax reform: A regional perspective

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

上海市公共建筑实施自愿节能协议的必要性

建设能源节约型社会是一项涉及后代的事业,其关键在于建立一套有利于可持续地实现节能效益最大化的管理模式和运行机制。自愿节能协议是目前许多国家为提高能源利用效率所采取的一种管理模式。结合上海公共建筑的运行管理现状,论述了自愿节能协议在公共建筑运行管理过程中实施的必要性,并为进一步推动在建筑运行管理过程中实施自愿节能协议提出建议。     

Wind farm investment risks under uncertain CDM benefit in China

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.     

Analysis of interactions among the barriers to energy saving in China

Since China became the second largest energy consumer and carbon dioxide emitter, the problem of energy consumption and environmental pollution has drawn the world's attention. Meanwhile, Chinese government has put high emphasis on the problem. One project of energy saving initiated by Chinese government has been put into practice. However, many difficulties need to be dealt with to meet the expected aim of social development. The objective of this article is to investigate the interactions among the major barriers which prevent the practice of energy saving in China. Obviously, a clear definition of relationships among the barriers to energy saving helps top leaders make relevant decisions to solve the problem of economic sustainability, energy security and environment pollution in the future. To date, studies specifying energy-saving barriers have often focused on analyzing these barriers separately. As a result, a holistic view in understanding the barriers to energy-saving project is lacking. Interpretive structural modeling (ISM) is utilized to summarize the critical barriers hindering the project of energy saving in China and to explain the interrelationships among them. Suggestions for energy-saving practice and future research are provided.     

Voluntary agreements in the field of energy efficiency and emission reduction: Review and analysis of experiences in the European Union

A number of Member States of the EU have introduced voluntary agreements (VAs) that aim to deliver energy savings and emission reductions via increased energy efficiency in different end-use sectors, mainly targeting industry.     

Assessing industrial energy conservation by unit processes

This paper develops a methodological framework called cost-energy dynamics (CED) for assessing industrial energy conservation potential and cost. CED combines profitability and process analyses, looks at industrial energy consumption as consisting of end-use unit operations, links public and private decisions by internalizing the tax rate, and judges energy conservation measures in a continuous spectrum of cost effectiveness. CED provides a basis for estimating the price elasticity of energy demands, for quantifying the effectiveness of government measures, and for estimating the costs if the U.S. manufacturing industry is to save an additional 20% of energy per unit output between 1980 and 2000.     

Multi-criteria decision-making in the selection of a renewable energy project in spain: The Vikor method

One of the characteristics of the Spanish energy system is its high degree of dependence on imports. In 2005, the Spanish government approved the new Renewable Energy Plan in the following sectors: Windpower, Hydroelectric, Solar Thermal, Solar Thermo-electric, Photovoltaic, Biomass, Biogas and Biofuels. The aim of the Plan is to make it possible to reach the target of 12% of primary energy being met from renewable sources by 2010. When selecting one from various Renewable Energy investment projects different groups of decision-makers become involved in the process. Decision-making has to take into consideration several conflicting objectives because of the increasingly complex social, economic, technological, and environmental factors that are present. Traditional single-criterion decision-making is no longer able to handle these problems. The Compromise Ranking method, also known as the VIKOR method, introduces the Multi-criteria ranking index based on the particular measure of “closeness” to the “ideal” solution. In this paper, we apply the method in the selection of a Renewable Energy project corresponding to the Renewable Energy Plan launched by the Spanish Government. The method is combined with the Analytical Hierarchy Process method for weighting the importance of the different criteria, which allows decision-makers to assign these values based on their preferences. The results show that the Biomass plant option (Co-combustion in a conventional power plant) is the best choice, followed by the Wind power and Solar Thermo-electric alternatives.     

Energy policy and cooperation in Southeast Asia: The history,challenges, and implications of the trans-ASEAN gas pipeline (TAGP) network

This article explores the proposed multibillion dollar Trans-ASEAN Gas Pipeline (TAGP) network in Southeast Asia, focusing on the interests that have promoted the TAGP and why. Based on extensive field research, textual analysis of government reports, and more than 100 research interviews at government institutions, multilateral development banks, universities, consulting firms, energy companies, and nongovernmental organizations, this article assesses the challenges facing the TAGP in terms of promotion, implementation, and operation. It explores the genesis of the TAGP project and the drivers pushing Southeast Asian investment in natural gas, with a special emphasis on the development needs of the region. It also investigates the numerous technical, economic, legal, political, social, and environmental impediments to the TAGP project. The article concludes that the rhetoric of regional energy cooperation touted by the Association of Southeast Asian Nations (ASEAN) does not match its actual practice, and that in many cases discussions of regionalism and energy security are intended to obscure opportunistic thinking within individual countries.