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The political economy of energy tax differentiation across industries: theory and empirical evidence

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  • Niels Anger
  • Christoph Böhringer
  • Andreas Lange

Abstract

We investigate political economy determinants of energy tax differentiation across industries. Based on a theoretical common agency model, we show that differences in the ease of energy demand reductions across industries explain the pattern of tax differentiation: if the government is sufficiently amenable to lobbying efforts, industries with relatively inelastic energy demands will face lower tax rates. An empirical assessment of Germany’s environmental tax reform corroborates the findings of our theoretical analysis. Copyright Springer Science+Business Media New York 2015

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  • Niels Anger & Christoph Böhringer & Andreas Lange, 2015. "The political economy of energy tax differentiation across industries: theory and empirical evidence," Journal of Regulatory Economics, Springer, vol. 47(1), pages 78-98, February.
    • Handle: RePEc:kap:regeco:v:47:y:2015:i:1:p:78-98
    DOI: 10.1007/s11149-014-9264-9
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    Cited by:

    1. Haiqing Hu & Di Chen & Chun‐Ping Chang & Yin Chu, 2021. "The Political Economy Of Environmental Consequences: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 35(1), pages 250-306, February.
    2. Andor, Mark A. & Lange, Andreas & Sommer, Stephan, 2022. "Fairness and the support of redistributive environmental policies," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    3. Kalk, Andrei & Sorger, Gerhard, 2023. "Climate policy under political pressure," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    4. Marian Zaharia & Aurelia Pătrașcu & Manuela Rodica Gogonea & Ana Tănăsescu & Constanța Popescu, 2017. "A Cluster Design on the Influence of Energy Taxation in Shaping the New EU-28 Economic Paradigm," Energies, MDPI, vol. 10(2), pages 1-21, February.

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    More about this item

    Keywords

    Energy taxation; Interest groups; Common agency ; Regression analysis; C31; D62; H23; P16;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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