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.     

The impacts of carbon tax and complementary policies on Chinese economy

Under the pressure of global warming, it is imperative for Chinese government to impose effective policy instruments to promote domestic energy saving and carbon emissions reduction. As one of the most important incentive-based policy instruments, carbon tax has sparked a lively controversy in China. This paper explores the impact of carbon tax on Chinese economy, as well as the cushion effects of the complementary policies, by constructing a dynamic recursive general equilibrium model. The model can describe the new equilibrium for each sequential independent period (e.g. one year) after carbon tax and the complementary policies are imposed, and thus describe the long-term impacts of the policies. The simulation results show that carbon tax is an effective policy tool because it can reduce carbon emissions with a little negative impact on economic growth; reducing indirect tax in the meantime of imposing carbon tax will help to reduce the negative impact of the tax on production and competitiveness; in addition, giving households subsidy in the meantime will help to stimulate household consumptions. Therefore, complementary policies used together with carbon tax will help to cushion the negative impacts of carbon tax on the economy. The dynamic CGE analysis shows the impact of carbon tax policy on the GDP is relatively small, but the reduction of carbon emission is relatively large.     

A review of low carbon fuel policies: Principles,program status and future directions

A low carbon fuel standard (LCFS) is a market-based policy that specifies declining standards for the average lifecycle fuel carbon intensity (AFCI) of transportation fuels sold in a region. This paper: (i) compares transportation fuel carbon policies in terms of their economic efficiency, fuel price impacts, greenhouse gas emission reductions, and incentives for innovation; (ii) discusses key regulatory design features of LCFS policies; and (iii) provides an update on the implementation status of LCFS policies in California, the European Union, British Columbia, and Oregon. The economics literature finds that an intensity standard implicitly taxes emissions and subsidizes output. The output subsidy results in an intensity standard being inferior to a carbon tax in a first-best world, although the inefficiency can be corrected with a properly designed consumption tax (or mitigated by a properly designed carbon tax or cap-and-trade program). In California, from 2011 to 2015 the share of alternative fuels in the regulated transportation fuels pool increased by 30%, and the reported AFCI of all alternative fuels declined 21%. LCFS credit prices have varied considerably, rising to above $100/credit in the first half of 2016. LCFS programs in other jurisdictions share many features with California's, but have distinct provisions as well.     

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.     

Impacts of CO2 emission constraints on technology selection and energy resources for power generation in Bangladesh

This paper examines the impacts of CO₂ emission reduction target and carbon tax on future technologies selection and energy use in Bangladesh power sector during 2005–2035. The analyses are based on a long-term energy system model of Bangladesh using the MARKAL framework. The analysis shows that Bangladesh will not be able to meet the future energy demand without importing energy. However, alternative policies on CO₂ emission constraints reduce the burden of imported fuel, improve energy security and reduce environmental impacts. The results show that the introduction of the CO₂ emission reduction targets and carbon taxes directly affect the shift of technologies from high carbon content fossil-based to low carbon content fossil-based and clean renewable energy-based technologies compared to the base scenario. With the cumulative CO₂ emission reduction target of 10–20% and carbon tax of 2500 Taka/ton, the cumulative net energy imports during 2005–2035 would be reduced in the range of 39–65% and 37%, respectively, compared to the base scenario emission level. The total primary energy requirement would be reduced in the range of 4.5–22.3% in the CO₂ emission reduction targets and carbon tax 2500 Taka/ton scenarios and the primary energy supply system would be diversified compared to the base scenario.     

Assessing the role of renewable energy policies in landfill gas to energy projects

Methane (CH₄) is the second most prevalent greenhouse gas and has a global warming potential at least 28 times as high as carbon dioxide (CO₂). In the United States, Municipal Solid Waste (MSW) landfills are reported to be the third-largest source of human-made methane emissions, responsible for 18% of methane emissions in 2011. Capturing landfill gas (LFG) for use as an energy source for electricity or heat produces alternative energy as well as environmental benefits. A host of federal and state policies encourage the development of landfill gas to energy (LFGE) projects. This research provides the first systematic economic assessment of the role of these policies on adoption decisions. Results suggest that Renewable Portfolio Standards and investment tax credits have contributed to the development of these projects, accounting for 13 of 277 projects during our data period from 1991 to 2010. These policy-induced projects lead to 10.4 MMTCO₂e reductions in greenhouse gas emissions and a net benefit of $41.8 million.     

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.     

Review of the environmental policy instruments in the standardization of H2 for the decarbonization of Mexico

The objective of this work is to review the environmental and ecological policy instruments that Mexican legislation for existence of an Official Mexican Hydrogen Standard according to the premises motivates decarbonization. There is a worldwide interest in hydrogen (H₂) and its incorporation into legal systems. In Mexico there are large legal gaps that question the legality of H₂, because it is not recognized in a federal law and is only considered in technical standards of voluntary application. Also, Mexico has forest, agricultural, and livestock waste that, if properly used, can cover the energy demand of communities. The main findings of this study refer to the fact that, according to international standards for the management of H₂ and taking into account the regulatory limitations in Mexico, it is possible to promote, an Official Mexican Standard exclusively aimed at establishing the minimum requirements for the design, construction, operation and maintenance of H₂ storage, considering the areas of the opportunity offered by foreign experiences, according to the Mexican context. It is concluded that the parameters of legality exist in the instruments of environmental policy, to support the existence of an Official Mexican Standard of H₂.     

The legal regulation of the H2 as a strategy for public policy in Mexico from the consolidation of the National Council of the hydrogen

There are few efforts have been made to translate the theoretical contributions of hydrogen technology in to public policy schemes. This problem is reflected in the lack of an effective public policies in Mexico, which, despite the efforts to be placed on the boom of the hydrogen economy, that continues to legal bias and little social recognition. The main objective of the research was to analyze the Mexican legal framework for H₂ regulation and Mexican public policies that consider H₂ as an energy source. Thus far, the H₂ has not been incorporated as an alternative energy source, because does not exist Regulation of storage and also there is a lack of regulations to regulate H₂ in final applications, as is the case of fuel cell and it is observed that there is no regulation for safety and properties relevant to H₂. Is appropriate to propose Public policy strategy with the creation of the National Hydrogen Council.     

The effect of carbon tax on per capita CO2 emissions

As the most efficient market-based mitigation instrument, carbon tax is highly recommended by economists and international organizations. Countries like Denmark, Finland, Sweden, Netherlands and Norway were the first adopters of carbon tax and as such, research on the impacts and problems of carbon tax implementation in these countries will provide great practical significance as well as caution for countries that are to levy the tax. Different from the existing studies that adopt the model simulation approaches, in this article, we comprehensively estimate the real mitigation effects of the five north European countries by employing the method of difference-in-difference (DID). The results indicate that carbon tax in Finland imposes a significant and negative impact on the growth of its per capita CO₂ emissions. Meanwhile, the effects of carbon tax in Denmark, Sweden and Netherlands are negative but not significant. The mitigation effects of carbon tax are weakened due to the tax exemption policies on certain energy intensive industries in these countries. Notwithstanding, in Norway, as the rapid growth of energy products drives a substantial increase of CO₂ emissions in oil drilling and natural gas exploitation sectors, carbon tax actually has not realized its mitigation effects.     

Environmental policy and the energy efficiency of vertically differentiated consumer products

We analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products. Considering energy taxes, subsidies to firms for investment in more eco-friendly products, and product standards, we are particularly interested in how distributional goals in addition to environmental goals shape the choice of policy instruments. We find that an industry-friendly government levies an energy tax to supplement a lax product standard, but shies away from subsidies to firms. By contrast, a consumer-friendly government relies heavily on a strict product standard and additionally implements a moderate subsidy to firms, but avoids energy taxes.     

Review of policies and measures for energy efficiency in industry sector

Energy efficiency in industry plays key roles in improving energy security, environmental sustainability and economic performance. It is particularly important in strategies to mitigate climate change. The evidence of great potential for cost-effective efficiency-derived reductions in industrial energy use and greenhouse gas (GHG) emissions have prompted governments to implement numerous policies and measures aimed at improving their manufacturing industries’ energy efficiency. What can be learned from these many and varied initiatives? This paper provides foundation for policy analysis for enhancing energy efficiency and conservation in industry, by surveying more than 300 policies, encompassing about 570 measures, implemented by governments in IEA countries, Brazil, China, India, Mexico, Russia and South Africa. It outlines the measures’ main features, their incidence of use, and their connections with specific technical actions and key stakeholders (i.e., how and where measures affect the energy efficiency of industry). It also examines the key features underlying the measures’ success: (1) potential to reduce energy use and CO₂ emissions cost-efficiently; (2) ease of policy development, execution and assessment and (3) ancillary societal effects.     

Ancillary benefits of climate policy in a small open economy: The case of Sweden

It is increasingly recognised that GHG reduction policies can have important ancillary benefits in the form of positive local and regional environmental impacts. The purpose of this paper is to estimate the domestic ancillary pollution benefits of climate policy in Sweden, and investigate how these are affected by different climate policy designs. The latter differ primarily in terms of how the country chooses to meet a specific target and where the necessary emission reductions take place. The analysis relies on simulations within the energy system optimisation model TIMES-Sweden, and focuses on four non-GHG pollutants: Nitrogen Oxides (NO_X), Non Methane Volatile Organic Compounds (NMVOC), inhalable particles (PM_2.5), and Sulphur dioxide (SO₂). The simulations permit detailed assessments of the respective technology and fuel choices that underlie any net changes in the estimated ancillary effects. The results indicate that the ancillary benefits constitute a far from insignificant share of total system costs, and this share appears to be highest in the scenarios that entail the largest emission reductions domestically. This result reflects the fact that carbon dioxide emission reductions abroad also implies a lost opportunity of achieving substantial domestic welfare gain from the reductions of regional and local environmental pollutants.     

Avoiding adverse employment effects from electricity taxation in Norway: What does it cost?

Welfare analyses of energy taxes typically show that systems with uniform rates perform better than differentiated systems. However, most western countries include some exemptions for their energy-intensive export industries and thereby avoid this potential welfare gain. Böhringer and Rutherford (1997) find that uniform taxation of carbon emissions in combination with a wage subsidy preserves jobs in these industries at a lower welfare cost compared with a differentiated system. The wage subsidy scheme generates a substantial welfare gain per job saved. This study, however, finds that welfare costs are substantial when less accurate policy measures, represented by production-dependent subsidies, protect jobs in Norwegian electricity-intensive industries. The welfare cost per job preserved by this subsidy scheme amounts to approximately 60% of the wage cost per job, suggesting that these jobs are expensive to preserve. A uniform electricity tax combined with production-dependent subsidies preserves jobs at a lower welfare cost compared with the current differentiated electricity tax system.     

China's emissions trading system and an ETS-carbon tax hybrid

China is introducing a national carbon emission trading system (ETS), with details yet to be finalized. The ETS is expected to cover only the major emitters but it is often argued that a more comprehensive system will achieve the emission goals at lower cost. We first examine an ETS that covers both electricity and cement sectors and consider an ambitious cap starting in 2017 that will meet the official objective to reduce the carbon-GDP intensity by 60–65% by 2030 compared to 2005 levels. The two ETS-covered industries are compensated with an output-based subsidy to represent the intention to give free permits to the covered enterprises. We then consider a hybrid system where the non-ETS sectors pay a carbon tax and share in the CO₂ reduction burden. Our simulations indicate that hybrid systems will achieve the same CO₂ goals with lower permit prices and GDP losses. We also show how auctioning of the permits improves the efficiency of the ETS and the hybrid systems. Finally, we find that these CO₂ control policies are progressive in that higher income households bear a bigger burden.     

Macroeconomic and sectoral impacts of carbon taxation : A case for the Japanese economy

It is now commonly recognized that a carbon tax is one of the most effective and economically efficient policy instruments to reduce carbon dioxide (CO₂) emissions. If cost effective, however, carbon taxes might impose widely distributed economic burdens among industrial sectors or firms, particularly when factor mobilities are imperfect in the short run, since high economic performance could be hindered by a serious implementation of the polluter pays principle. We examine and compare a trade off relationship between the expected macroeconomic costs and sectoral impacts in a simplified general equilibrium framework. Attempts are also made to evaluate a government subsidy (financed by tax revenues) to investments in new energy-efficient technologies as a complementary mitigation policy to carbon taxation.     

Economic efficiency of solar hot water policy in New Zealand

New Zealand has recently followed the path of several other countries in promoting solar hot water (SHW) systems in the effort to reduce greenhouse gas emissions, yet the economic efficiency of large-scale policies to encourage SHW remains a pressing question for policymakers. This paper develops an economic framework to examine policies to promote SHW in New Zealand, including the current information, training, and subsidy policy. The economic framework points to environmental, energy security, and average-cost electricity retail pricing market failures as motivation for SHW policy, with the global climate change externality the most important of these. The results indicate that domestic SHW systems are close to being financially attractive from a consumer perspective, but a more substantial subsidy policy would be necessary for SHW to appeal to a wider audience. Such a policy is far more likely to have positive net benefits than a policy of mandating SHW on all homes or all new homes in New Zealand, and could be justified on economic efficiency grounds under reasonable assumptions. However, this result reverses under an economy-wide carbon trading system that internalizes the environmental externality.     

Taxing CO2 and subsidising biomass: analysed in a macroeconomic and sectoral model

This paper analyses the combination of taxes and subsidies as an instrument to enable a reduction in CO₂ emission. The objective of the study is to compare recycling of a CO₂ tax revenue as a subsidy for biomass use as opposed to traditional recycling such as reduced income or corporate taxation.A model of Denmark’s energy supply sector is used to analyse the effect of a CO₂ tax combined with using the tax revenue for biomass subsidies. The energy supply model is linked to a macroeconomic model such that the macroeconomic consequences of tax policies can be analysed along with the consequences for specific sectors such as agriculture. Electricity and heat are produced at heat and power plants utilising fuels which minimise total fuel cost, while the authorities regulate capacity expansion technologies. The effect of fuel taxes and subsidies on fuels is very sensitive to the fuel substitution possibilities of the power plants and also to the extent to which expansion technologies have been regulated.It is shown how a relatively small CO₂ tax of 15 US$/tCO₂ and subsidies for biomass can produce significant shifts in the fuel input-mix, when the expansion of production capacity is regulated to ensure a flexible fuel mix. The main finding is that recycling to biomass use will reduce the level of CO₂ tax necessary to achieve a specific emission reduction. Policies to ensure a more intensive use of such relatively expensive renewable energy sources as biomass could be implemented with only small taxes and subsidies.     

中国生物质成型燃料产业政策与执行效果分析

生物质固体成型燃料因其碳中性、氮硫含量低、烟气污染少、便于运输等优势,在供热、供气以及发电方面可以大量替代煤炭、天然气或重油,在有效供能的同时,能够显著减少污染,实现CO2零排放,符合当前社会可持续发展的理念。尽管我国出台了一系列激励政策,但是在产业发展的过程中还存在一定问题,产业发展离国家目标还有一定差距。本文对目前国内外已出台的生物质成型燃料产业政策进行了归纳和总结,并对我国的关键产业政策,如秸秆能源化补贴政策、税收减免政策、环保措施政策、贷款优惠的执行效果做了跟踪调研,对不同政策的执行力度与成效做了评价和分析,最终给出了政策改进建议。     

国外节能公共投资政策和对我国的启示

从奖励、贷款、股权参与、创业投资基金、担保、补贴审计以及特定能效技术减税等方面,介绍了国外先进国家节能公共投资政策制定、实施等方面的经验。分析并指出了国外先进国家节能公共投资政策对我国的启示：①利用市场机制,依靠＂经济诱因＂促进节能工作;②整合现有资源,成立节能专责机构;③灵活运用各种节能公共投资措施;④应持续推动产业部门节能工作。