Value of sensitive in-situ environmental assets in energy resource extraction

The extraction of energy resources and the preservation of sensitive in-situ environmental assets are invariably mutually exclusive alternatives. The opportunity cost value of preserving the environmental assets can be assessed by recourse to resource rent taxes, and threshold values. The case study analysis carried out in this paper suggests that the preservation of these assets could be justifiable on the grounds of “acceptable sacrifice”.     

Energy-related taxation as an environmental policy tool—the Finnish experience 1990–2003

Finland has over 10 years experience of environment-based energy taxation. The design and level of the CO₂ and energy tax scheme has been changed several times on an ad hoc basis. In recent years, Finland has introduced more and more tax “departures”, i.e. deviations and exceptions from an “ideal” type of environmental tax. Examples of this include fuel-specific and user-specific exemptions or lowered tax levels taxes on electricity production from non-fossil energy sources, plus refund systems for fossil fuel and electricity users. Thus, it is apparent that Finnish energy taxation aimed at improving the environment has developed ineffectively. Increases in the level of CO₂ tax on fossil fuels have served mostly fiscal purposes with reduced CO₂ emissions being only a side benefit. No systematic follow-up or ex post analysis on the impacts of the CO₂ and energy taxes has been carried out. From the perspective of greenhouse gas mitigation, the discussion on economic instruments has shifted from CO₂ taxation towards emissions trading in the international context of the European Union and the Kyoto Protocol.     

The influence of consumers' environmental beliefs and attitudes on energy saving behaviours

With a heightened focus on the concept of sustainability in the past few decades, government, business and individuals have become increasingly aware of the need to reduce our environmental footprint. Consequently there has been much research on consumer environmental behaviour, and the beliefs, norms and attitudes that influence this behaviour. In this article we develop a conceptual framework of consumer environmental behaviour and its antecedents, and test hypotheses within the framework by means of a survey of green consumers. The results show that general environmental beliefs do influence norms on environmental actions and prices, but only norms on price are correlated with environmental attitudes; both intrinsic and extrinsic environmental drivers together with social norms and community influence are associated with environmental attitudes, but cost barriers may have a negative influence. It was also found that there was a strong association between environmental attitudes and energy saving behaviours but the latter was not in any way influenced by government policies or subsidies.     

Multiple instruments to change energy behaviour: The emperor’s new clothes?

Over the last few decades, several instruments have evolved to deal with similar energy and environmental challenges. For instance, the economic literature prescribes separate tax or cap-and-trade systems to internalize negative environmental externalities and subsidies to internalize positive externalities such as research and development. However, policy is not straightforward because of the influence on cost and competition and concerns for regional employment, economic activity within certain industries and any distributional effects. Tax discrimination, subsidies and regulations then undermine the efficiency of energy instruments. To balance any environmental concerns, other instruments, including green and white certificates, have been created. While innovative, these work as simple combinations of taxes and subsidies. While the extant literature thoroughly analyzes the partial effects of these instruments, there has been little focus on their basics and the effects of aggregate taxes and subsidies. This complexity calls for research on the efficiency of each instrument, including the administration and transaction costs associated with holding a large set of instruments. We should consider the coordination and simplification of policy tools before complicating the system further by introducing new, primarily equivalent, instruments.

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.     

Will a radical transport pricing reform jeopardize the ambitious EU climate change objectives?

This paper examines the effects of replacing current fuel taxes by a system of taxes that account better for all the different external costs of the different transport modes. One of the important implications of this reform is that current fuel taxes are decreased to a level of 80 euro/ton of CO₂ but that the mileage related taxes on car and truck use increase. Using the TREMOVE model for the transport sector of 31 European countries, one finds that the volume of transport will decrease because current taxes on transport are too low compared to overall external costs. Overall CO₂ emissions will decrease slightly. Using the MARKAL–TIMES model for the Belgian energy sector, putting all sectors and technologies on equal footing shows that a fuel tax reform makes that it is not cost efficient to require large CO₂ emission reductions in the transport sector and that traditional car technologies will continue to dominate the car market in 2020–2030.     

Energy demand and environmental taxes: the case of Greece

The purpose of this paper is to analyze the effects that energy taxes may have on reducing environmental pollution in Greece. We study the demand for residential energy for the period 1965–1998, and on the basis of these estimates we make forecasts for CO₂ emissions in the coming years. Furthermore we develop alternative scenarios for tax changes, and study their effects on CO₂ emissions. According to our findings the harmonization of the Greek energy taxes to the average European Union levels implies an increase of total CO₂ emissions by 6% annually. If taxes are raised, however, to the highest European Union levels, the CO₂ emissions are restricted significantly. These empirical findings may indicate that environmental taxation cannot be the unique instrument for combating pollution.     

How to reach a compromise on drilling in AWNR

Drilling in the Arctic National Wildlife Refuge (ANWR) has been controversial for decades and is likely to remain so. However, progress towards resolving this controversy might be possible if the congressional proposals to open ANWR include provisions that require the federal government to spend the money the federal government makes through leasing fees and taxes on conservation. The rising price of oil means that the profits to the federal government from drilling in ANWR are greater than the amount of money required to preserve all of the world's major centers of biodiversity. Moderate environmental organizations might therefore support drilling in order to avert other larger environmental problems elsewhere.     

An economic analysis of transportation fuel policies in Brazil: Fuel choice,land use,and environmental impacts

Brazil uses taxes, subsidies, and blending mandates as policy instruments to manage and stabilize its transportation fuel markets. The fuel sector has been very dynamic in recent years due to frequent policy adjustments and variable market conditions. In this paper, we use a price endogenous economic simulation model to analyze the impacts of such policy adjustments under various challenging conditions in the global ethanol and sugar markets. Our analysis specifically focuses on Brazilian producers' supply responses, consumers' driving demand and fuel choice, ethanol trade, land use, greenhouse gas emissions, and social welfare. The model results show that (i) under a low ethanol blending rate, conventional vehicles would be driven significantly less while flex-fuel and ethanol-dedicated vehicles would not be affected significantly; (ii) lowering the fuel taxes adversely affects the competitiveness of sugarcane ethanol against gasoline blends, thus lowering producers' surplus; and (iii) while a reduction in fuel taxes is advantageous in terms of overall social welfare, it has serious environmental impacts by increasing the GHG emissions from transportation fuels consumed in Brazil.     

Will hydrogen be competitive in Europe without tax favours?

Hydrogen is one of the alternative transport fuels expected to replace conventional oil based fuels. The paper finds that it is possible for non-fossil-based hydrogen to become the lowest cost fuel without favourable tax treatment. The order of per kilometre cost depends on performance in hydrogen production, the international oil price, and fuel taxes. At low oil prices, the highest per kilometre costs were found for non-fossil power-based hydrogen, the second highest for natural gas-based hydrogen, and the lowest for conventional fuels. At high oil prices, this ranking is reversed and non-fossil power-based hydrogen becomes the most cost competitive fuel. General fuel taxes lower the threshold at which the international oil price reverses this competitiveness order. The highest fuel tax rates applied in Europe lowers this threshold oil price considerably, whereas the lowest fuel taxes may be insufficient to make hydrogen competitive without tax favours. Alternative adjustments of the EU minimum fuel tax rates with a view to energy efficiency and CO₂-emissions are discussed.     

Atmospheric externalities and environmental taxation

The paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes vs. quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy.     

The effect of the German and British environmental taxation reforms: A simple assessment

This article implements a simple econometric approach to assess the effect of the environmental tax reforms introduced in Germany and the UK. Despite the very simple econometric approach adopted in this paper, in the case of the energy demand, our results do not differ markedly from those obtained from complicated multi-sectoral econometric models. In the case of the labour demand, our results differ from the estimates obtained from econometric models where the employment level is not directly influenced by the energy price. On the other hand, our results are more similar to those obtained from models where the level of employment is directly influenced by the energy price. Confirming the findings of Bosquet [2000. Environmental tax reform: does it work? A survey of the empirical evidence. Ecological Economics 34, 19–32] and OECD [2004. Environment and Employment: An Assessment Working Party on National Environmental Policy OECD, Paris], we conclude that environmental tax reforms can deliver substantial reductions in energy consumption while having small effects on the level of employment, effect which can be positive, depending on the size of the reduction in the labour costs and the value of cross-price elasticities.     

Small hydropower stations in Greece: The local people's attitudes in a mountainous prefecture

During the last years, it has become evident that operation of hydropower stations creates discussions and different views on the local communities. Especially, although the issue of operation of small hydropower (SHP) stations or plants is of considerable interest in Greece, almost no study has been conducted to investigate the current status of Greek citizens’ attitudes towards utilization of the available hydropower potential through SHP. The present study, therefore, aims to examine in the prefecture of Ioannina, Greece, the local people's attitudes on operation of SHP stations in connection with the increased public interest for environmental and social dimensions of small hydropower stations, and to determine how these attitudes change with respect to various factors.     

Adoption of green electricity policies: Investigating the role of environmental attitudes via big data-driven search-queries

Despite the rising influence of public opinion on government energy policy formulation and implementation, the roles of pro and/or anti-environmental attitudes among residents have not been empirically examined. To quantify time-varying environmental attitudes among local residents, we exploit geo-specific Google search-query data derived from Internet-based “big data” and verify through ordinary least squares regression outcomes regarding environmental behavior. For the purpose of drawing policy implications, we revisit decisions by state governments of the United States to adopt three well-known green electricity policies: renewable energy portfolio, net metering rules, and public benefit funds. As some states have not yet adopted some (or any) of these policies, unlike previous studies, we handle the issue by examining right-censored data and applying a duration-based econometric method called the accelerated failure time model. We found state residents’ environmental attitudes to have statistically significant roles, after controlling for other traditional time-varying policy adoption factors. Interestingly, the extent to which anti-environmental attitudes affect a state’s policy adoption differs across green energy policies, and knowing this can help a local government formulate better-tailored environmental policy. In particular, researchers can use our method of incorporating citizens’ environmental attitudes to discuss relevant issues in the field of energy policy.     

Evidence of asymmetric behavioral responses to changes in gasoline prices and taxes for different fuel types

Using monthly data from the Spanish gasoline retail market we explore asymmetries in consumers’ behavioral responses to changes in gasoline prices and taxes. In particular, we are interested in investigating whether an increase in gasoline taxes has a more negative impact on the demand than a –similar in magnitude– increase in the “pre-tax” price of gasoline for different fuel types. We estimate fuel consumers’ responses using a rich set of robust panel data models considering potential dynamic effects and endogeneity problems. We find evidence to confirm the existence of asymmetric responses for the demand of unleaded fuels and agricultural diesel fuel. However we cannot support this statement for the regular diesel case: for this fuel both the tax-exclusive price and the tax elasticities are roughly the same. This result agrees with the fact that “diesel drivers” tend to be better informed about changes in both fuel prices and taxes. Some implications in terms of fiscal policy and pollution and climate change policy are also discussed.     

Analysis of the impacts of combining carbon taxation and emission trading on different industry sectors

Application of price mechanisms has been the important instrument for carbon reduction, among which the carbon tax has been frequently advocated as a cost-effective economic tool. However, blanket taxes applied to all industries in a country might not always be fair or successful. It should therefore be implemented together with other economic tools, such as emission trading, for CO₂ reduction. This study aims to analyze the impacts of combining a carbon tax and emission trading on different industry sectors. Results indicate that the “grandfathering rule (RCE2000)” is the more feasible approach in allocating the emission permit to each industry sector. Results also find that the accumulated GDP loss of the petrochemical industry by the carbon tax during the period 2011–2020 is 5.7%. However, the accumulated value of GDP will drop by only 4.7% if carbon taxation is implemented together with emission trading. Besides, among petrochemical-related industry sectors, up-stream sectors earn profit from emission trading, while down-stream sectors have to purchase additional emission permits due to failure to achieve their emission targets.     

Asia energy mixes from socio-economic and environmental perspectives

Sustainable clean energy is the top social, economic, and environmental agenda of political leaders, policy makers, enlightened business executives, and civil society in Asia. Strong economic growth in Asia has caused a great demand for energy which has resulted in an enormous increase in CO₂ emissions. The association of Southeast Asian nations (ASEAN), India, China, South Korea and Japan are the most important regions in Asia as their economies have been growing steadily. These countries though heavily dependent on fossil fuels have stepped up their measures towards low-carbon society amid domestic affordability challenges and changing global mindset. This report highlights the current energy scenario in these countries and their effort towards an affordable and sustainable clean energy future. The energy policy to enhance energy security and improve environmental sustainability is also explicated in this article.     

我国煤炭税费制度的现状、问题及对策建议

本文研究了当前我国煤炭税费制度的现状,存在问题,以及改革和健全完善我国煤炭税费制度的必要性、紧迫性;以科学发展观为指导,提出改革和健全完善我国煤炭税费制度的对策建议。     

When do increasing carbon taxes accelerate global warming? A note on the green paradox

The “green paradox” by Hans–Werner Sinn suggests that increasing resource taxes accelerate global warming because resource owners increase near-term extraction in fear of higher future taxation. In this note we show that this effect does only occur for the specific set of carbon taxes that increase at a rate higher than the effective discount rate of the resource owners. We calculate a critical initial value for the carbon tax that leads to a decreased cumulative consumption over the entire (infinite) time horizon. Applying our formal findings to carbon taxes for several mitigation targets, we conclude that there is a low risk of a green paradox in case the regulator implements and commits to a permanently mal-adjusted tax. This remaining risk can be avoided by emissions trading scheme as suggested by Sinn—as long as the emission caps are set appropriately and the intertemporal permit market works correctly.     

Carbon offsets with endogenous environmental policy

Interests in obtaining carbon offsets in host countries for CDM projects may serve as an obstacle to implementing more stringent general environmental policies in the same countries. A relatively lax environmental policy, whereby carbon emissions remain high, can be advantageous for such countries as it leaves them with a higher than otherwise scope for future emissions reductions through CDM and other offset projects. In this paper, the potential to affect the availability of future CDM projects is shown to distort environmental and energy policies of CDM host countries, in two ways. First, policies to reduce the use of fossil energy are weakened. This in turn weakens private sector incentives to switch to lower-carbon technology through CDM projects. CDM host governments then also find it attractive to subsidize this switch, in order to maximize the country's advantage from the CDM.