Quantitative analysis of energy-efficiency strategy on CO2 emissions in the residential sector in Japan – Case study of Iwate prefecture

This study examines the economics of energy-efficiency strategies for reducing CO₂ emissions in the residential sector in Japan from the perspective of regional characteristics. For this study, the residential sector in Iwate prefecture was selected as representative of rural areas in Japan. In order to promote purchases of energy-efficient consumer appliances, the prefectural government is presumed to reimburse purchasers a part of the cost difference between energy efficient and conventional appliances. This paper begins with a discussion of the prefecture’s financial support for purchasers of energy efficient appliances and assumes that the payments come from prefectural government funds. This paper then looks at the effect of a carbon-tax refund on the reduction of CO₂ emissions. The results show that, if half of the households use energy-efficient appliances, then CO₂ emissions in the residential sector in the year 2020 will decreases from the BAU scenario, 0.726 Mt-C to 0.674 Mt-C. However, the Iwate prefectural government expends $105 million annually, which is 1.5% of the total tax revenue in the year 2003. The carbon-tax refund effectively encourages further reductions in CO₂ emissions. Under the $20/tC carbon tax, proposed by the Ministry of the Environment, the carbon-tax refund leads to a reduction in residential CO₂ emissions from 0.726 Mt-C to 0.712 Mt-C.     

Modelling the impacts of a carbon emission-differentiated vehicle tax system on CO2 emissions intensity from new vehicle purchases in Ireland

The increasing awareness of the effects of climate change on the environment and the economic pressure on oil supply has focused international attention on reducing CO₂ emissions and energy usage across all sectors. In order to meet their Kyoto protocol commitments and in line with European Union policy, the Irish government has introduced a carbon-based tax system for new vehicles purchased from the 1st of July 2008. This new legislation aims to reduce carbon emissions in the transport sector, a sector which is responsible for a significant proportion of both. This paper presents the results of the development, calibration, and application of a car choice model which predicts the changes in CO₂ emissions intensity from new vehicle purchases as a result of the changes in vehicle tax policy and fuel price in Ireland. The model also predicts the impact of such changes on tax revenue for the Irish government and the changes in the split between the number of diesel and petrol vehicles purchased. The investigation found that the introduction of these new carbon-based taxes in Ireland will result in a reduction of 3.6–3.8% in CO₂ emissions intensity and a reduction in annual tax revenue of €191 M.     

Towards a low carbon growth in Mexico: Is a double dividend possible? A dynamic general equilibrium assessment

This paper simulates the medium- and long-term impact of proposed and expected energy policy on the environment and on the Mexican economy. The analysis has been conducted with a Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy (Three-ME). This model is well suited for policy assessment purposes in the context of developing economies as it indicates the transitional effects of policy intervention. Three-ME estimates the carbon tax required to meet emissions reduction targets within the Mexican “Climate Change Law”, and assesses alternative policy scenarios, each reflecting a different strategy for the recycling of tax revenues. With no compensation, the taxation policy would reduce CO₂ emissions by more than 75% by 2050 with respect to Business as Usual (BAU), but at high economic costs. Under full redistribution of carbon tax revenues, a double dividend arises: the policy appears beneficial both in terms of GDP and CO₂ emissions reduction.     

Double dividend effectiveness of energy tax policies and the elasticity of substitution: A CGE appraisal

There is a considerable body of literature that has studied whether or not an adequately designed tax swap, whereby an ecotax is levied and some other tax is reduced while keeping government income constant, may achieve a so-called double dividend, that is, an increase in environmental quality and an increase in overall efficiency. Arguments in favor and against are abundant. Our position is that the issue should be empirically studied starting from an actual, non-optimal tax system structure and by way of checking the responsiveness of equilibria to revenue neutral tax regimes under alternate scenarios regarding technological substitution. With the use of a CGE model, we find that the most critical elasticity for achieving a double dividend is the substitution elasticity between labor and capital whereas the elasticity that would generate the highest reduction in carbon dioxide emissions is the substitution elasticity among energy goods.     

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.     

Examining the role of energy efficiency and non-economic factors in energy demand and CO2 emissions in Nigeria: Policy implications

This paper examines the role of energy efficiency and non-economic factors such as consumers' preferences, lifestyles and values (which have hitherto been ignored) in energy demand and CO₂ emissions modelling for Nigeria. We use a structural time series model to estimate various energy demand and CO₂ intensity models that take account of the aforementioned factors. We adopt preferred models from these estimates to analyse how energy demand and CO₂ emissions in Nigeria might evolve by generating three different future scenarios to 2025. We find energy efficiency and non-economic factors to influence energy demand and CO₂ emissions. The long-run income and price elasticities obtained differ significantly from those in existing studies that have ignored these salient factors. In a business-as-usual scenario, the results indicate that energy demand will continue to grow. Consequently, present policies do not sufficiently mitigate aggregate CO₂ emissions in Nigeria. The lesson for policy makers is that the extant policies introduced to restrain CO₂ emissions (from a production perspective) have to be combined with new policies that influence consumers' lifestyles and behaviours, develop energy efficient technologies and apply low tariffs on imported energy efficient appliances, to drive down CO₂ emissions from a consumption perspective.     

Analysis of policies to reduce oil consumption and greenhouse-gas emissions from the US transportation sector

Even as the US debates an economy-wide CO₂ cap-and-trade policy the transportation sector remains a significant oil security and climate change concern. Transportation alone consumes the majority of the US’s imported oil and produces a third of total US Greenhouse-Gas (GHG) emissions. This study examines different sector-specific policy scenarios for reducing GHG emissions and oil consumption in the US transportation sector under economy-wide CO₂ prices. The 2009 version of the Energy Information Administration’s (EIA) National Energy Modeling System (NEMS), a general equilibrium model of US energy markets, enables quantitative estimates of the impact of economy-wide CO₂ prices and various transportation-specific policy options. We analyze fuel taxes, continued increases in fuel economy standards, and purchase tax credits for new vehicle purchases, as well as the impacts of combining these policies. All policy scenarios modeled fail to meet the Obama administration’s goal of reducing GHG emissions 14% below 2005 levels by 2020. Purchase tax credits are expensive and ineffective at reducing emissions, while the largest reductions in GHG emissions result from increasing the cost of driving, thereby damping growth in vehicle miles traveled.     

Can expanding natural gas infrastructure mitigate CO2 emissions? Analysis of heterogeneous and mediation effects for China

To verify whether the expansion of natural gas infrastructure can effectively mitigate carbon dioxide (CO₂) emissions in China, this study first investigates the impact of natural gas infrastructure on China's CO₂ emissions by employing a balanced panel dataset for 30 Chinese provinces covering 2004–2017. Fully considering the potential heterogeneity and asymmetry, the two-step panel quantile regression approach is utilized. Also, to test the mediation impact mechanism between natural gas infrastructure and CO₂ emissions, this study then analyzes the three major mediation effects of natural gas infrastructure on China's CO₂ emissions (i.e., scale effect, technique effect, and structure effect). The empirical results indicate that expansion of the natural gas infrastructure can effectively mitigate China's CO₂ emissions; however, this impact is significantly heterogeneous and asymmetric across quantiles. Furthermore, through analyzing the mediation impact mechanism, the natural gas infrastructure can indirectly affect CO₂ emissions in China through the scale effect (i.e., gas population and economic effects) and structure effect (i.e., energy structure effect). Conversely, the technique effect (i.e., energy intensity effect) brought by natural gas infrastructure on CO₂ emissions in China has not been significant so far. Finally, policy implications are highlighted for the Chinese government with respect to reducing CO₂ emissions and promoting growth in the natural gas infrastructure.     

Analysis of the vehicle mix in the passenger-car sector in Japan for CO2 emissions reduction by a MARKAL model

Carbon dioxide (CO₂) emissions from the passenger-car sector in Japan are increasing rapidly and should be reduced cost-effectively in order to stabilize energy-related CO₂ emissions in Japan. The purpose of the present paper is to clarify the most cost-effective mix of vehicles for reducing CO₂ emissions and to estimate the subsidy that is necessary to achieve this vehicle mix. For this analysis, the energy system of Japan from 1988 to 2032 is modeled using a MARKAL model. The most cost-effective mix of vehicles is estimated by minimizing the total energy system cost under the constraint of an 8% energy-related CO₂ emissions reduction nationally by 2030 from the CO₂ emissions of 1990. Based on the results of the analysis, hybrid vehicles are the only type of clean-energy vehicle, and their share of the passenger car sector in 2030 will be 62%. By assuming the subsidization of hybrid vehicles, the same vehicle mix can be achieved without constraining CO₂ emissions. The peak of the total subsidy estimated to be necessary is 1.225 billion US$/year in 2020, but the annual revenue of the assumed 31 US$/t-C carbon tax from the passenger car sector is sufficient to finance the estimated subsidy. This suggests that we should support the dissemination of hybrid vehicles through subsidization based on carbon tax.     

The energy situation and its sustainable development strategy in China

The paper briefly summarizes China’s energy situation and sustainable development strategy as they were by 2009. The energy consumption in 2009 is reported to be 3.1 billion tons standard coal equivalent, 1/7 of the world total, 6.3% higher than in the year 2008, and its share of world CO₂ emissions increased rapidly to 20.3% in 2006. These trends are most likely to continue with China’s plan to accomplish its social and economy development goals. To address these problems and also respond to increasing world pressure for reduction of greenhouse gas emissions, the Chinese government plans and has legislated promotion of energy conservation, efficiency, renewable energy technologies and use, and reduction of energy-related environmental impacts to reduce energy intensity by 20% during the 2006-2010 period, and to reduce the CO₂ emission/GDP ratio by 40-45% by 2020 relative to 2005. China is facing severe energy-related challenges that conflict resources shortages with the planned rapid economic development, energy use with the related environmental pollution, and new technology with the old production/consumption patterns. It is recognized that energy development must, however, follow a sustainable path to coordinate economy growth, social development, and environmental protection.     

Competition between biomass and food production in the presence of energy policies: a partial equilibrium analysis

Bioenergy has several advantages over fossil fuels. For example, it delivers energy at low net CO₂ emission levels and contributes to sustaining future energy supplies. The concern, however, is that an increase in biomass plantations will reduce the land available for agricultural production. The aim of this study is to investigate the effect of taxing conventional electricity production or carbon use in combination with subsidizing biomass or bioelectricity production on the production of biomass and agricultural commodities and on the share of bioelectricity in total electricity production. We develop a partial equilibrium model to illustrate some of the potential impacts of these policies on greenhouse gas emissions, land reallocation and food and electricity prices. As a case study, we use data for Poland, which has a large potential for biomass production. Results show that combining a conventional electricity tax of 10% with a 25% subsidy on bioelectricity production increases the share of bioelectricity to 7.5%. Under this policy regime, biomass as well as agricultural production increase. A carbon tax that gives equal net tax yields, has better environmental results, however, at higher welfare costs and resulting in 1% to 4% reduction of agricultural production.     

An analysis of the proposed Btu tax on the us economy

This paper examines the impacts of a Btu tax on energy on the United States economy. The analytical approach used in the analysis consisted of a general equilibrium model composed of fourteen producing sectors, fourteen consuming sectors, six household categories classified by income and a government. The effects of imposing a tax on natural gas, coal, and nuclear power of 25.7 cents per million Btu and a tax on refined petroleum products of 59.9 cents per million Btu on prices and quantities are examined. The results are revealing. For example, a Btu tax on energy imposed at the point of production will result in lower output by the producing sectors (by about $122.4 billion), a decrease in the consumption of goods and services (by about $64.6 billion), and a reduction in welfare (by about $66.6 billion). The government would realize an increase in revenue of about $50.5 billion. In the case of the Btu tax being imposed at the point of consumption, there will be lower output by the producing sectors (by about $83.7 billion), a reduction in the consumption of goods and services (by about $48.3 billion), and a reduction in welfare (by about $49.5 billion). The government would realize an increase in revenue of $41.3 billion. Finally, when subjected to a sensitivity analysis, the results are reasonably robust with regard to the assumption of the values of the substitution elasticities.     

Implementing a double dividend: recycling ecotaxes towards lower labour taxes

In this paper, we follow the tradition of applied general equilibrium modelling of the Walrasian static variety to study the empirical viability of a double dividend (green, welfare, and employment) in the Spanish economy. We consider a counterfactual scenario in which an ecotax is levied on the intermediate and final use of energy goods. Under a revenue neutral assumption, we evaluate the real income and employment impact of lowering payroll taxes. To appraise to what extent the model structure and behavioural assumptions may influence the results, we perform simulations under a range of alternative model and policy scenarios. We conclude that a double dividend—better environmental quality, as measured by reduced CO₂ emissions, and improved levels of employment—may be an achievable goal of economic policy.     

Reduction of fossil fuel emissions in the USA: A holistic approach towards policy formulation

In the United States, the response of the federal government to the global initiative of reduction of emissions of CO₂ has been limited. With the Kyoto Protocol having entered into force in February 2005, there will be renewed international pressure on the United States for action. Concurrently, the US economy, growing modestly, is characterized by large current account and budget deficits. This situation calls for garnering additional revenue through repealing of the recent tax cuts. An option available is to impose a modest carbon tax. The rationale of such a tax is that it would address the twin objectives of additional revenue and reduction of emissions.     

The Tyndall decarbonisation scenarios—Part II: Scenarios for a 60% CO2 reduction in the UK

This paper describes the Tyndall decarbonisation scenarios, the first to take account of CO₂ emissions from the whole of the UK's energy system, including emissions from international shipping and aviation. It builds on Part I, which outlined the backcasting methodology developed to generate the scenarios. The five scenarios produced through this process articulate alternative vision of a substantially decarbonised society in 2050, ranging from a halving of energy consumption from current levels to a near doubling. This work demonstrates that a 60% reduction in the UK's CO₂ emissions is achievable, even when all CO₂ sources are taken into account. The impacts and consequences of the scenarios were assessed by means of a multi-criteria framework which cautions us that the high energy demand scenarios will have a large impact on broader sustainability criteria.     

CO2 emissions,nuclear energy,renewable energy and economic growth in the US

This study explores the causal relationship between carbon dioxide (CO₂) emissions, renewable and nuclear energy consumption and real GDP for the US for the period 1960–2007. Using a modified version of the Granger causality test, we found a unidirectional causality running from nuclear energy consumption to CO₂ emissions without feedback but no causality running from renewable energy to CO₂ emissions. The econometric evidence seems to suggest that nuclear energy consumption can help to mitigate CO₂ emissions, but so far, renewable energy consumption has not reached a level where it can make a significant contribution to emissions reduction.     

Interactions between measures for the support of electricity from renewable energy sources and CO2 mitigation

As Europe wants to move towards a secure, sustainable and competitive energy market, it has taken action, amongst other, to support electricity from renewable energy sources (RES-E) and to mitigate CO₂ emissions. This paper first qualitatively discusses price- and quantity-based measures for RES-E deployment as well as CO₂ mitigation. Next, a simulation model is developed to quantitatively discuss the effects of a tradable green certificate system, a premium mechanism, a tradable CO₂ allowance system and a CO₂ tax on both RES-E deployment and CO₂ mitigation. A three-regional model implementation representing the Benelux, France and Germany is used. In a first step of simulations, all measures are implemented separately. In a second step, combinations of both RES-E supporting and CO₂ mitigating measures are simulated and discussed. Significant indirect effects are demonstrated, especially for RES-E supporting measures on the reduction of CO₂ emissions. Interactions between different measures show that the price level of quantity-based measures can be strongly influenced.     

CO2 emissions,energy consumption and economic growth in China: A panel data analysis

This paper examines the causal relationships between carbon dioxide emissions, energy consumption and real economic output using panel cointegration and panel vector error correction modeling techniques based on the panel data for 28 provinces in China over the period 1995–2007. Our empirical results show that CO₂ emissions, energy consumption and economic growth have appeared to be cointegrated. Moreover, there exists bidirectional causality between CO₂ emissions and energy consumption, and also between energy consumption and economic growth. It has also been found that energy consumption and economic growth are the long-run causes for CO₂ emissions and CO₂ emissions and economic growth are the long-run causes for energy consumption. The results indicate that China's CO₂ emissions will not decrease in a long period of time and reducing CO₂ emissions may handicap China's economic growth to some degree. Some policy implications of the empirical results have finally been proposed.     

Grey forecasting model for CO2 emissions: A Taiwan study

Among the various greenhouse gases associated with climate change, CO₂ is the most frequently implicated in global warming. The latest data from Carbon Monitoring for Action (CARMA) shows that the coal-fired power plant in Taichung, Taiwan emitted 39.7 million tons of CO₂ in 2007 – the highest of any power plant in the world. Based on statistics from Energy International Administration, the annual CO₂ emissions in Taiwan have increased 42% from 1997 until 2006. Taiwan has limited natural resources and relies heavily on imports to meet its energy needs, and the government must take serious measures control energy consumption to reduce CO₂ emissions. Because the latest data was from 2009, this study applied the grey forecasting model to estimate future CO₂ emissions in Taiwan from 2010 until 2012. Forecasts of CO₂ emissions in this study show that the average residual error of the GM(1,1) was below 10%. Overall, the GM(1,1) predicted further increases in CO₂ emissions over the next 3 years. Although Taiwan is not a member of the United Nations and is not bound by the Kyoto Protocol, the findings of this study provide a valuable reference with which the Taiwanese government could formulate measures to reduce CO₂ emissions by curbing the unnecessary the consumption of energy.     

The impact of household consumption on energy use and CO2 emissions in China

In this paper, the consumer lifestyle approach is applied to analyze the impact of consumption by urban and rural households on energy use and CO₂ emissions for different regions and income levels in China. Grey Model is used to compare the relationship between energy consumption, consumption expenditure and CO₂ emissions for different lifestyles. The results show that direct energy consumption is diverse for urban households and simple for rural households in China. Direct energy consumption and CO₂ emissions are increasing faster for urban than for rural households. Indirect energy consumption and CO₂ emissions for urban households are much greater than the direct consumption values. The total indirect energy consumption and CO₂ emissions differ by regions and the structures are different, but the latter differences are not obvious. The impact of household income is enormous. Indirect energy consumption and CO₂ emissions are higher for high-income than for low-income households. The structural difference for indirect energy consumption and CO₂ emissions for households with different income levels is significant. The higher the income, the more diverse is the energy consumption and CO₂ emission structure. The structures for indirect energy use and CO₂ emissions are diverse for urban households, but simple for rural households.