Carbon Taxes from an Economic Perspective
WIFO Working Papers, 2018, (554), 18 Seiten
Online seit: 01.03.2018 0:00
Economic literature generally favours market-based instruments for regulating environmental externalities since they ensure compliance at the least cost to society. Emission taxes have been increasingly introduced internationally, with the focus shifting to CO2 after the adoption of the Kyoto Protocol in 1997. In this paper, the theoretical economic literature on energy and emission taxes is reviewed. The focus is on theoretical recommendations regarding the optimal design of environmental and especially carbon taxes, their performance relative to other instruments, the concept of a double dividend as well as potential competitiveness and distribution effects. Carbon taxation can play a key role in climate policy and for achieving long-term emission reductions. This overview of economic considerations may help in creating a sustainable, effective and efficient regulatory system for reducing emissions.
Forschungsbereich:Umwelt, Landwirtschaft und Energie
Sprache:Englisch

Verwandte Einträge

Monographien, Februar 2018, 17 Seiten
Studie von: Österreichisches Institut für Wirtschaftsforschung – Rijksuniversiteit Groningen
Auftraggeber: Klima- und Energiefonds
Online seit: 07.03.2018 0:00
The CATs project focused on carbon taxes as a policy instrument for achieving emission reductions particularly in sectors not covered by the EU Emission Trading Scheme (EU ETS). Based on a systematic review of carbon taxes in EU member countries and a qualitative assessment of the implementation barriers and success factors in frontrunner countries a model-based analysis of the effects of various carbon tax scenarios for Austria was performed. Policy recommendations were developed for Austria and the EU. The project results suggest that carefully designed CO2 tax schemes can play an important part in achieving greenhouse gas emission targets for non-ETS sectors in Austria with potentially positive distributive and macroeconomic impacts.
WIFO Working Papers, 2018, (559), 26 Seiten
Online seit: 01.03.2018 0:00
The aim of this paper is to map legal aspects that should be taken into account in designing a carbon tax. The survey of the legal literature concludes that many different aspects have to be taken into account in designing a carbon tax, both with respect to the kind of legal instruments to be used and the actual design of the tax. It is analysed how these legal concepts relate to economic theory. This overview of legal considerations may help in creating a sustainable, effective and efficient regulatory system for reducing emissions, as carbon taxes can play a crucial role for achieving long-term emission reductions.
WIFO Working Papers, 2018, (557), 22 Seiten
Online seit: 01.03.2018 0:00
This paper examines the implementation issues and barriers for introducing a carbon tax at EU member state level. Important success determinants are related to the political economy of introducing taxes (negotiations with stakeholders, concessions, changes in proposed legislation, compromises, etc.) which translate i.a. into competitiveness issues, and fairness/equity/distribution issues. For these the design of the carbon tax exemptions, and safeguards to prevent progressivity and the use of the tax proceeds are important. The analysis will focus on the "frontrunner" countries in the EU which have been very successful in terms of the introduction of carbon taxes (Sweden, Denmark and Finland). The countries employed different implementation strategies but underscore the importance of successful issue, timing, linking and to foster political support by safeguarding competitiveness and by addressing income distributions.
WIFO Working Papers, 2018, (556), 17 Seiten
Online seit: 01.03.2018 0:00
The excitement about concluding the Paris Agreement is giving way to the sobering realisation that a lot more needs to be done to attain its climate policy objective. More and more EU member countries embrace carbon taxes but the national measures differ strongly. In an integrated European market this challenges the level playing field of competing industries and the transboundary nature of regulating a global pollutant and calls for a solution on EU level (or higher). Past attempts to regulate carbon emissions at EU level by fiscal measures have, however, been markedly unsuccessful. This paper therefore examines introduction issues and barriers of a CO2 tax at EU level and offers policy suggestions to move forward.
This paper provides an overview of energy and (implicit) CO2 taxation in the EU member countries. Against the background of the EU energy taxation directives, energy and implicit CO2 tax rates in the EU countries are discussed, focussing on taxation in the transport sector as a major non-ETS emitter. Empirical evidence on the impact of energy and carbon taxes on energy use and emissions is presented and the economic and distributional effects of energy and carbon taxes are then discussed. Research on energy price elasticities suggests that energy and carbon taxation can make a significant contribution towards achieving emission reductions, particularly in the transport sector where greenhouse gas emissions continue to be on the rise in the EU. Evidence on the economic impacts of energy and carbon taxes furthermore shows that a double divided can be achieved. With respect to the distributional impacts of carbon and energy taxes evidence is, however, mixed. While empirical studies generally negate regressive effects for taxes on transport fuels, energy and carbon taxes on heating fuels tend to be found regressive.
Abgeschlossene Forschungsprojekte
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung
Abgeschlossen: 2018
This project focuses on carbon taxes as a policy instrument for achieving emission reductions particularly in non-EU ETS sectors. We perform a systematic review of carbon taxes in EU member countries in quantitative terms and a qualitative assessment of the implementation processes, barriers, related legal and political science aspects. A model-based analysis of the effects of introducing carbon taxes in Austria will be performed and policy recommendations are developed for Austria and the EU.
We assess distributive, macroeconomic, and CO2 emission impacts of CO2 tax schemes in Austria by applying the macroeconomic input-output model DYNK[AUT]. The tax schemes analysed focus primarily on CO2 emissions not covered by the European Emission Trading System (ETS), applying different CO2 tax rates as well as tax compensation schemes. We perform comparative scenario analysis for our model's base year (i.e., short-term impacts). Our model simulations indicate that – without tax compensation – impacts on households can be regressive if measured as tax burden relative to income, and are found to be rather proportional if measured as tax burden relative to expenditure or as changes in total expenditure and income. Lower income households benefit more from tax compensations (lump sum payments), i.e., CO2 taxes with compensation measures for households lead to progressive tax burden impacts. Energy-related CO2 emissions decrease quite substantially in non-ETS sectors, although households react inelastic. Value added in most non-ETS industry and service sectors declines only slightly without tax compensation and commodity import shares are hardly affected. Decreasing employers' social contribution (i.e., lowering labour costs) mitigates negative impacts in most non-ETS industry and service sectors. GDP decreases very moderately without tax recycling, depending on the tax rate. Employment effects are similar but smaller. Tax recycling leads to negligible GDP impacts and increases employment. Our simulations thus suggest that CO2 taxes could be a crucial and socially acceptable element within a comprehensive set of policy instruments in order to contribute to achieving greenhouse-gas emission targets for non-ETS sectors in Austria.
Monographien, Februar 2018, 43 Seiten
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Rijksuniversiteit Groningen
Online seit: 07.03.2018 0:00
The CATs project focused on carbon taxes as a policy instrument for achieving emission reductions particularly in sectors not covered by the EU Emission Trading Scheme (EU ETS). Based on a systematic review of carbon taxes in EU member countries and a qualitative assessment of the implementation barriers and success factors in frontrunner countries a model-based analysis of the effects of various carbon tax scenarios for Austria was performed. Policy recommendations were developed for Austria and the EU. The project results suggest that carefully designed CO2 tax schemes can play an important part in achieving greenhouse gas emission targets for non-ETS sectors in Austria with potentially positive distributive and macroeconomic impacts.