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Energy Taxation and Price Distortions in Fossil Fuel Markets: Some Implications for Climate Change Policy

Author

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  • Peter Hoeller

    (OECD)

  • Jonathan Coppel

    (OECD)

Abstract

In response to the potential threat of global warming many countries are considering cost effective policies to reduce greenhouse gas emissions. In this context much attention has been paid to taxes levied on the carbon content of fuels (carbon taxes), since they are a potentially efficient economic instrument for reducing emissions of CO2, the main greenhouse gas. This paper first reviews the existing structure of fossil fuel prices and taxes and the relationship between energy prices and carbon emissions. It then analyses the economic cost of superimposing carbon taxes on top of current energy taxes. Finally, using a simple energy demand system, tax reform proposals are simulated including restructuring present energy taxation by the average implicit carbon tax and a carbon cum energy tax similar to the EC proposal ... En réponse à la menace potentielle de réchauffement planétaire, de nombreux pays étudient des politiques de coût efficaces pour réduire les émissions de gaz à effet de serre. Dans ce contexte, les taxes perçues en fonction de la teneur en carbone des combustibles (taxes sur le carbone) ont été l'objet d'une attention particulière, ces taxes étant un instrument économique potentiellement efficace pour réduire les émissions de CO2, principal gaz à effet de serre. Ce document examine tout d'abord la structure existante des prix et des taxes s'attachant aux combustibles fossiles et la relation entre les prix de l'énergie et les émissions de carbone. Il analyse ensuite le coût économique que représente la superposition de taxes sur le carbone aux taxes déjà existantes sur l'énergie. Enfin, en utilisant un simple système de demande d'énergie, les propositions de réforme fiscale font l'objet d'une simulation comportant une restructuration du système actuel de taxation de l'énergie passant ...

Suggested Citation

  • Peter Hoeller & Jonathan Coppel, 1992. "Energy Taxation and Price Distortions in Fossil Fuel Markets: Some Implications for Climate Change Policy," OECD Economics Department Working Papers 110, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:110-en
    DOI: 10.1787/317606127730
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    Citations

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    Cited by:

    1. Zhang, ZhongXiang & Baranzini, Andrea, 2004. "What do we know about carbon taxes? An inquiry into their impacts on competitiveness and distribution of income," Energy Policy, Elsevier, vol. 32(4), pages 507-518, March.
    2. Steenblik, Ronald P & Coroyannakis, Panos, 1995. "Reform of coal policies in Western and Central Europe : Implications for the environment," Energy Policy, Elsevier, vol. 23(6), pages 537-553, June.
    3. Mumtaheena Anwar & Sohanur Rahman & Md. Nurul Kabir, 2021. "Does national carbon pricing policy affect voluntary environmental disclosures? A global evidence," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(2), pages 211-244, April.
    4. Baranzini, Andrea & Goldemberg, Jose & Speck, Stefan, 2000. "A future for carbon taxes," Ecological Economics, Elsevier, vol. 32(3), pages 395-412, March.
    5. ZhongXiang Zhang & Lucas Assunção, 2004. "Domestic Climate Policies and the WTO," The World Economy, Wiley Blackwell, vol. 27(3), pages 359-386, March.
    6. W. J. McKibbin & T. J. Bok, "undated". "The Impact on the Asia-Pacific Region of Fiscal Policy of the United States and Japan," Discussion Papers 120, Brookings Institution International Economics.
    7. Oikonomou, Vlasis & Jepma, Catrinus & Becchis, Franco & Russolillo, Daniele, 2008. "White Certificates for energy efficiency improvement with energy taxes: A theoretical economic model," Energy Economics, Elsevier, vol. 30(6), pages 3044-3062, November.
    8. V., Oikonomou & A., Flamos & S., Grafakos, 2010. "Is blending of energy and climate policy instruments always desirable?," Energy Policy, Elsevier, vol. 38(8), pages 4186-4195, August.
    9. Lykke E. Andersen, 2015. "A Cost-benefit Analysis of Deforestation in the Brazilian Amazon," Discussion Papers 0065, Instituto de Pesquisa Econômica Aplicada - IPEA.
    10. Shane Bonetti & Felix FitzRoy, 1999. "Environmental Tax Reform and Government Expenditure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(3), pages 289-308, April.
    11. Smith, Clare & Hall, Stephen & Mabey, Nick, 1995. "Econometric modelling of international carbon tax regimes," Energy Economics, Elsevier, vol. 17(2), pages 133-146, April.
    12. Jean-Charles Hourcade & Khalil Helioui & Laurent Gilotte, 1997. "De quelques paradoxes autour de la fixation d'une taxe internationale sur le carbone," Revue Économique, Programme National Persée, vol. 48(6), pages 1509-1528.
    13. James M. Poterba, 1993. "Global Warming Policy: A Public Finance Perspective," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 47-63, Fall.
    14. Lucas Assuncao & ZhongXiang Zhang, 2002. "Domestics Climate Change Policies And The Wto," UNCTAD Discussion Papers 164, United Nations Conference on Trade and Development.
    15. Olivier Godard, 1996. "Economic Expertise And Decision-Making In Controversial Universes," Post-Print halshs-00625518, HAL.
    16. David M Newbery, 1992. "Should Carbon Taxes Be Additional to Other Transport Fuel Taxes?," The Energy Journal, , vol. 13(2), pages 49-60, April.
    17. Robalino, David & Lempert, Robert, 2000. "Carrots and sticks for new technology: Abating greenhouse gas emissions in a heterogeneous and uncertain world," MPRA Paper 12002, University Library of Munich, Germany.
    18. Olivier Godard, 1997. "Social Decision-Making under Scientific Controversy, Expertise, and the Precautionary Principle," Post-Print halshs-00624027, HAL.
    19. Gunther Tichy, 1993. "Ökonomische Auswirkungen einer Energieabgabe in Österreich," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 19(3), pages 315-327.
    20. Krause, Florentin, 1996. "The costs of mitigating carbon emissions : A review of methods and findings from European studies," Energy Policy, Elsevier, vol. 24(10-11), pages 899-915.
    21. Caplan, Arthur J. & Ellis, Christopher J. & Silva, Emilson C. D., 1999. "Winners and Losers in a World with Global Warming: Noncooperation, Altruism, and Social Welfare," Journal of Environmental Economics and Management, Elsevier, vol. 37(3), pages 256-271, May.
    22. Peter Bohm & Bjorn Larsen, 1994. "Fairness in a tradeable-permit treaty for carbon emissions reductions in Europe and the former Soviet Union," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(3), pages 219-239, June.
    23. Lucia, Umberto & Grisolia, Giulia, 2017. "Unavailability percentage as energy planning and economic choice parameter," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 197-204.
    24. repec:clr:wugarc:y:1993:v:19i:3p:315 is not listed on IDEAS
    25. Kum Yeen Wong & Joon Huang Chuah & Chris Hope, 2019. "As an emerging economy, should Malaysia adopt carbon taxation?," Energy & Environment, , vol. 30(1), pages 91-108, February.

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