Carbon Emission Tax Research Articles

Brand extension strategy in the presence of carbon tax regulation policy and social influence

Brand extension is a common marketing strategy used to capture a competitive advantage in the fashion industry and often causes social influence between the parent and sub-brands. On the one hand, sub-brand consumers are more willing to buy products when the parent brand sells well. On the other hand, the parent brand consumers’ purchase intention decreases when the sub-brand product sells too much. The fashion industry also contributes considerably to global carbon emissions. To reach sustainable development goals, governments impose carbon taxes. This paper analyzes how social influence and carbon tax regulations can affect a monopolistic firm’s brand extension strategy. The analytical results show that the firm extends from the parent brand to the sub-brand when the magnitude of social influence is not strong in the absence of a carbon tax, as the market expansion effect dominates the cannibalization effect. When the regulator imposes a carbon emissions tax, the range is further narrowed of the social influence that allows the firm to benefit from brand extension strategy because of the cost effect. Counterintuitively, the brand extension strategy can force the regulator to lower the tax price. Moreover, our findings reveal that social influence exerts an inverse impact on the regulator’s tax pricing decisions, contingent upon the extent of the parent brand’s brand power advantage. Carbon tax regulation hurts the firm and consumer surplus, but benefits the environment and social welfare. Additionally, we reaffirm the robustness of our findings under conditions of asymmetry in the intensity of social influence and different pollution damage functions. Intriguingly, we find that the firm can mitigate the negative cannibalization effect by selling its sub-brand products through a downstream retailer.

Peran Wajib Pajak Kendaraan Bermotor Atas Kebijakan Pemutihan Pajak dan Pajak Emisi Karbon di Kabupaten Karawang

Tax whitening policies and motor vehicle carbon emission policies are one of the things that need to be considered, where the tax whitening policy must be seen as to the effectiveness of the policy and the carbon emission tax must be structured so that it can be accepted by the public. This research was conducted with the aim of knowing, analyzing and explaining the tax whitening policy and vehicle carbon emissions tax policy in Karawang Regency. This research uses a qualitative research approach with descriptive analysis methods. Research data was taken through field observations, interviews and literature studies. Based on the results and discussion, it was found that the effectiveness of the Vehicle Tax Reduction Program in Karawang, which is carried out regularly every year and socialization is carried out through various media, has succeeded in creating enthusiasm and community participation. This positive response can be seen from the increase in tax revenue and active taxpayer participation during the tax whitening period. If the vehicle carbon emissions tax policy is implemented in Karawang Regency, it has the potential to reduce pollution levels by 10%. However, taxpayers have had little response to this policy because it will increase the amount of responsibility for paying vehicle tax. The conclusion confirms that the tax whitening program is effective in achieving tax revenue objectives and stimulating community participation. The carbon emissions tax policy still needs to be thoroughly disseminated to the public so that the main objectives of the policy are conveyed well.

Towards net zero: Comprehensive approach for voluntary carbon trading among microgrids

In the context of growing focus over climate changes and promoting sustainability across a various range of fields, microgrids can play a significant role in global decarbonization endeavors, contributing to carbon neutrality and ultimately attaining net-zero emissions in the energy sector. The objective of this paper is to address the integration of voluntary carbon trading within microgrid communities, in the perspective to mitigate greenhouse gas (GHG) emissions and boost the integration of renewable energy sources (RES). Introducing five modular algorithms managing key aspects of carbon trading, the study engineers a comprehensive framework aiming to optimally orchestrate the Voluntary Carbon Market (VCM) within microgrids. Particularly, the developed algorithms address aspects such as market enrollment decision, optimal energy dispatch, managing the market transactions, sellers-buyers matching as well as the dynamic adjustment of carbon credit prices and emission taxes. The framework has been rigorously tested across three distinct scenarios. Results show that the developed VCM, with adequate configurations, has the potential to incentivize microgrids to curtail their GHG emissions, encourage the integration of more RES into their generation mix, and rewards the more proactive microgrids with substantial financial incentives.

A sustainable inventory model for a two-echelon cold chain with green technology investments and stock-dependent demand under carbon emissions tax regulation

Cold chains are specialised supply chains that make use of refrigerated storage facilities and distribution nodes. Products that have to be stored and distributed via cold chains are temperature-sensitive items such as perishable food or vaccines. If these products are not maintained at the correct temperatures, their safety and quality may be comprised with dire consequences for end-users. Operating refrigerated storage units consumes a lot of energy and the majority of transportation trucks used for distribution are powered by fossil fuels and therefore, cold chains are a major source of carbon emissions. With this in mind, this paper proposes a sustainable inventory model for a two-echelon cold chain with stock-dependent demand and green technology investments under a carbon emissions tax regulation. The carbon tax is imposed by policy makers to encourage the cold chain to reduce its emissions whereas, the green technology investment is a voluntary measure taken by the cold chain to reduce its carbon emissions. Based on the results, a carbon tax regulation is about 3% more effective than a green technology investment in terms of profit maximisation potential. Moreover, when it comes to investing in green technologies, there is an optimal investment amount above which increasing the investment results in decreased profits and increased emissions. Other avenues that the cold chain can explore in effort to improve profitability include increasing the potential market size, displaying higher volumes of stocks, using larger capacity transportation trucks and filling the trucks to capacity.

Analysis of reduction of carbon emission and dynamic service policies in a green manufacturing system under isoperimetric fixed servicing budget constraint

In the recent highly saturated, fluctuated as well as competitive marketing situation, economic growth, stability and survival of a manufacturing company are substantial factors for the competent authority of a manufacturing firm. Again, due to the harmful effects of different chemicals and preservative oriented products, consumers gradually show their sensible interest towards the green products and their benefits. Furthermore, emission reduction and carbon emission tax become major issues on the sustainable growth and reputation of a manufacturing company. Fundamentally, considering these factors, this study demonstrates the prior decisions regarding best-found policy of a manufacturing company considering the effects of service with sold eco-friendly (green) products under the effects of emission taxation and reduction policies. The demand effected by level of greenness, price and dynamic service provided to the consumers. Now, due to the budget constraint, manufacturer estimates a fixed budget due to service to the consumers along with the items sold. Again, based on the carbon emission reduction policy, two distinct cases are arisen which are analyzed separately. Due to the budget constraint, maximization problem associated to the model becomes an isoperimetric control problem. Then to illustrate the realistic feasibility the proposed model, a physical example is taken under consideration and it is solved using Teaching–learning-based optimization algorithm (TLBOA) considering each of the cases. Finally, the sensitivity analyses are performed to get some important implications for the manager of the proposed manufacturing system.

Economic framework for green shipping corridors: Evaluating cost-effective transition from fossil fuels towards hydrogen

Global warming's major cause is the emission of greenhouse-effect gases (GHG), especially carbon dioxide (CO2) whose main source is the combustion of fossil fuels. Fossil fuels serve as the primary energy source in many industries, including shipping, which is the focus of this study. One of the measures proposed to tackle GHG emissions is the development of green shipping corridors - carbon-free shipping routes that require the transition to alternative fuels, which are gaining competitiveness. One of the reasons for that is carbon pricing, which taxes CO2 emissions. However, the lack of consensus on the most cost-advantageous alternative fuel in the long run results in the delay of the implementation of green shipping corridors.To make it more accessible for stakeholders to conduct an economic analysis of the various options, a framework to determine and minimize the costs of transitioning from fossil fuels to any alternative fuel is proposed, over the period of one voyage, considering the lost opportunity cost, the deployment cost of bunkering vessels at the necessary call ports, the cost of converting the vessel, the car-bon emissions tax cost, and the fuel cost. This will allow stakeholders to choose the most economical alternative fuel, accelerating the development of green shipping corridor initiatives. To validate the effectiveness of the framework, it was applied in a case study involving a shipowner seeking to transition from heavy fuel oil (HFO) to Ammonia, Hydrogen, Liquefied Natural Gas (LNG), or Methanol. This study faced limitations due to the unknown costs of installing bunkering vessels for Ammonia and Hydrogen. However, it evaluates the cost-effectiveness of alternative fuels, providing insights into their short-term economic viability. The results showed that Hydrogen is the most cost-advantageous fuel until a deployment cost per bunkering vessel of 1,990,285$ for a sailing speed of 22 knots and 2,190,171$ for a sailing speed of 18 knots is reached, after which LNG becomes the most economical option regardless of variations in the carbon tax. Moreover, a sensitivity analysis was conducted to determine the effects of variations in parameters, such as carbon tax, fuel prices and vessel conversion costs in the total cost of each fuel option. Results highlighted that even though HFO remains the most economical fuel option, even when considering a high increase in carbon tax, the cost gap between HFO and alternative fuels narrows significantly with the increase in carbon tax. Furthermore, the sailing speed impacts the fuels’ competitiveness, as the cost difference between HFO and alternative fuels decreases at higher speeds.

An Austrian Critique of Using Carbon Taxes to Manage Climate Catastrophe Risk

Revising and extending the neoclassical rationale for pollution taxes, some economists have attempted to justify a carbon emissions tax as a way for the state to manage systemic climate risks for society. Deploying an approach to risk management commonly seen in financial markets, they depict a tax on carbon-based energy as a hedge against climate catastrophe. The Austrian school of economics has illuminated the conceptual defects of the neoclassical framework around welfare economics, market failure, negative externalities, and socialist economic planning generally. The risk management rationale for carbon taxes suffers from the same calculation and knowledge problems that encumber other state-centric schemes. This article critiques the proposed use of carbon taxes as climate risk insurance on the grounds that systemic risks are not insurable. Moreover, future climate costs cannot be calculated due to their subjectivity, the passage of time, and the absence of demonstrated preferences regarding property values. Both climate risk models and carbon tax cost-benefit models employ flawed assumptions and utility functions. This article proposes a strategic shrinking of the state’s role in economic affairs and a return to sound money as superior ways to mitigate a society’s climate disaster risks.

Techno-economic assessment of solar photovoltaic electrification and calcium looping technology as decarbonisation pathways of alumina industry

Aluminium industry stands out as a significant source of CO2 emissions, due partially to the high energy demand of the alumina extraction stage. Accordingly, this study explores the implementation of direct resistive heating of mid-temperature processes in alumina production as an alternative to decrease CO2 emissions. Additionally, two different strategies are evaluated to decarbonize alumina industry: the generation of renewable electricity through solar photovoltaic panels and the integration of a CO2 capture plant based on calcium looping technology. This work comprehends the modelling and sizing of these plants and the assessment of their economic performance through the calculation of their Net Present Value and their respective payback periods. The integration of both strategies into an alumina refinery model reveals that electrification of low and mid-temperature processes yields a 15 % reduction in CO2 direct emissions, whereas calcium looping demonstrates the potential to capture 97 % of emissions with a 7 % energy penalty. Also, economic assessments indicate substantial potential for improvement through in-site electricity generation via solar photovoltaic panels, exhibiting a payback time of 4.5 years. Conversely, the feasibility of a calcium-looping plant is hindered by high capital expenses, necessitating a longer payback period of 19–24 years. Sensitivity analyses underscore the suitability of in-site renewable electricity generation, whereas carbon emission taxes emerge as crucial in incentivizing carbon-neutral processes, with thresholds around 95–125 €/tonne of CO2. Despite potential deviations from real industrial settings, this study provides evidence for environmentally friendly strategies in alumina production that demonstrate limited adverse effects on economic performance.

Analysis Of The Impact Of Carbon Tax And Green Property Tax On Jakarta's Local Revenue

Environmental issues are serious global challenges that must be addressed immediately. These issues require swift and appropriate action, including policies to support the transition to a greener economy. Carbon tax and green property tax are two fiscal instruments that the government can use to encourage environmentally friendly behavior and investment. This study aims to determine the effect of carbon tax and green property tax implementation on DKI Jakarta's regional income in an effort to implement the Green Economy in DKI Jakarta. The method used is descriptive qualitative with data collection techniques through literature studies. Data is sourced from the internet, including BPS, DKI Jakarta government website, and journals. The results showed that DKI Jakarta's regional income from carbon emission tax in 2023 reached Rp 837,210,000 with total gas emissions of 27,970 kiloton. The realization of green buildings in DKI Jakarta in 2023 exceeded the target, reaching 3.99 percent of the target of 2.5 percent, exceeding the target by 1.49 percent. Green property tax in the form of PBB deductions for green buildings is projected not to increase local revenue, but to reduce local revenue from taxes. However, this decrease in revenue is not significant, as the increase in green buildings will attract investors with a potential US$30 billion green investment by 2030. This can be realized if buildings and companies in DKI Jakarta are green building certified. Reduced local revenue will be worth it if accompanied by reduced emissions from increased green buildings.

Science-Consistent Climate Health Beliefs As Predictors of Climate Behaviors and Support for Inflation Reduction Act Provisions and a Carbon Emissions Tax

Understanding the factors associated with acceptance of climate action is central in designing effective climate change communication strategies. An exploratory factor analysis of 12 science-consistent beliefs about the existence, causes, and consequences of climate change reveals three underlying factors: climate change [a] is real and human caused, [b] has increased the frequency of extreme weather events, and [c] negatively affects public health. In the presence of demographic, ideological, and party controls, this health factor significantly predicts a 3–6 percentage point increase in respondents’ [a] willingness to advocate for climate change; [b] reported personal pro-climate behaviors; and [c] support for government policies addressing climate change. These results are robust when controlling for respondents’ underlying belief in the existence and causes of climate change, respondent worry, self-efficacy, and respondent belief that extreme weather events and heat waves are increasing. These findings suggest ways to bolster public support for climate policies that may otherwise be at risk.

Impact of warranty and green level of the product with nonlinear demand via optimal control theory and Artificial Hummingbird Algorithm

Due to the current environmental situation and human health, a green manufacturing system is very essential in the manufacturing world. Several researchers have developed various types of green manufacturing models by considering green products, green investments, carbon emission taxes, etc. Motivated by this topic, a green production model is formulated by considering selling price, time, warranty period and green level dependent demand with a carbon emission tax policy. Also, the production rate of the system is an unknown function of time. Per unit production cost of the products is taken as increasing function of production rate and green level of the products. In our proposed model, carbon emission rate is taken as linear function of time. Then, an optimization problem of the production model is constructed. To validate of our proposed model, a numerical example is considered and solved it by AHA. Further, other five metaheuristics algorithms (AEFA, FA, GWOA, WOA and EOA) are taken to compare the results obtained from AHA. Also, concavity of the average profit function and convergence graph of different metaheuristics algorithms are presented. Finally, a sensitivity analysis is carried out to investigate the impact of different system parameters on our optimal policy and reach a fruitful conclusion from this study.

Renewable energy expansion under taxes and subsidies: A transmission operator’s perspective

This paper investigates the role of a transmission system operator within a carbon footprint reduction strategy incorporating carbon taxes and renewable energy generation subsidies in the decentralised energy market. This is achieved via an optimisation bi-level model in which a welfare-maximising transmission system operator makes investments in transmission lines at the upper level while considering power market dynamics at the lower level. To account for the deregulated energy market structure, this paper assumes that the generation companies at the lower level make capacity investments as price-takers in perfect competition. Considering alternative transmission infrastructure expansion budgets, carbon emission taxes and monetary incentives for renewable energy generation capacity expansion, the impact of alternative compositions of these factors is analysed against three output factors: the share of renewable energy in the generation mix, total generation amount, and social welfare. The proposed modelling assessment is applied to an illustrative three-node instance and a case study considering a simplified representation of the energy system of the Nordic and Baltic countries. The results highlight that, under certain circumstances, renewable energy generation subsidies may lead to an increase of renewable energy in the generation mix followed by a simultaneous fall in the total generation amount. Nevertheless, when applied together, these three measures demonstrated a positive impact on all output factors within Nordics’ and Baltics’ energy systems. The experiments additionally suggest that considering the high value of the carbon tax does not have an impact on the output factors while the composition of high values of renewable energy generation subsidies and budget for transmission infrastructure expansion has the strongest effect.

Evaluating The Nexus of Renewable Energy's in Economic Growth Realities: Autoregressive Distributed Lag Approach

This article about energy in an economic context, energy fossil has become one of the causes of issues faced by humanity. These problems have cascading impacts, ranging from climate damage to individual health and global socio-economic conditions. This study aimed to elucidate the effects of renewable energy, fossil energy, labor force, foreign direct investment and carbon dioxide emissions on economic growth. The analytical tool employed was the ARDL bound test. Secondary data from annual series spanning from 1986 to 2020. The study found a two-way cointegration between labor force, foreign direct investment, and economic growth. Based on the methodology used, conclusions were drawn regarding short-run and long-run relationships. In the short run, both fossil and renewable energy had unidirectional relationships with economic growth. Carbon dioxide emissions had a negative impact on economic growth in the short-run and the long-run. Labor force and economic growth exhibited a two-way relationship in the long-run. Consequently, energy transition policies and the imposition of carbon emission taxes could have negative short-run implications for Indonesia's economic growth, while the reverse may be true in the long run. Economic growth may reach a peak and then decline and policymakers should maximize existing non-renewable energy sources. A policy requiring to control more fossil fuel energy sources and discover untapped reserves is worthy of continuation and even strengthening. The findings provide an understanding of the relationship between renewable energy and economic growth as a necessity for the energy transition. The study has limitations in assumptions when interpreting the findings.

The Effect of Green Taxation on Financial Performance of Selected Oil and Gas Firms in Nigeria.

This study investigated the effect of green taxation on financial performance of selected oil and gas firms in Nigeria for the period 2017-2022. The specific objectives were to investigate the effect of carbon emission taxes; to find out the effect of petroleum profit tax; and to investigate the effect of industrial pollution tax on financial performance of selected oil and gas firms in Nigeria for the period 2017-2022. The model included the total assets of the oil and gas firms as dependent variable. The study adopted ex post facto research and employed times series data sourced from the annual financial records of the oil and gas firms, and the Federal Inland Revenue Service (FIRS). Evidence of longrun relationship was found among the model variables through the Johansen test, and a fast speed of adjustment at 32.01% annually. The major findings of the study are: carbon emission taxes had significant negative effect on financial performance of oil and gas firms in Nigeria; petroleum profit tax has significant negative effect on financial performance of oil and gas firms in Nigeria; and industrial pollution tax has significant negative effect on financial performance of oil and gas firms in Nigeria. Based on the findings, the study concluded that green taxation had significant negative effect on the financial performance of oil and gas firms in Nigeria. The study recommended that: the policymakers should design a strategy toward reviewing the carbon emission taxes due to evidence of negative shock on the oil and gas firms; the petroleum profit tax should also be reviewed down in order to mitigate risks arising from their operation which affect their performance; the government should further increase the industrial pollution tax rate, this will deter industries from indiscriminate pollution of the environment, restore investor confident and stabilize stock market in Nigeria.

Taxing Carbon Emissions and Green Transition: The Case of the Italian Electricity Market

Taxing Carbon Emissions and Green Transition: The Case of the Italian Electricity Market

Prediction of Carbon Tax Levied in China and Its Effects Based on BP Neural Network

Historical data of crude oil, coal and natural gas in China are used to calculate the carbon emission and carbon tax in recent years. It is proved that the nonlinear model, BP Neural Network, is more suitable for the calculation of carbon tax under the influence of various energy factors. Then BP Neural Network and GM (1, 1) have a good learning ability to forecast the carbon tax revenue from 2020 to 2030. BP Neural Network, however, has less error and shows that Per capita disposable income, GDP and Per capita GDP play a decisive role in the development of carbon tax and environmental protection. Based on the assumption that the carbon tax will be imposed and increased, the carbon emission intensity of each province and the carbon tax acceptance of urban residents will be within the ideal range in the next decade. All evaluation indicators of models and data analysis show that the carbon tax has a good policy guidance for energy saving and emission reduction. This study about carbon tax provides a new solution for domestic environmental protection.

Warranty, free service and rework policy for an imperfect manufacturing system with SAR sensitive demand under emission taxation

The aim of this study is to illustrate the impact of warranty/free service period, specific absorption rate (SAR) of the products, rework policy and emission taxation on the optimal business policy of an imperfect production inventory system in the current highly uncertain/intensified market situation. In this study, the customers’ demand is considered to be influenced by the warranty/free service period along with a permissible SAR of the items. As a result, the manufacturer invests in order to provide warranty period/free service period and fixing an appropriate SAR for the products which are shown in production cost, service cost and SAR reduction investment. Three distinct scenarios are analysed separately regarding the marketing assimilation of defective items. Each suggested scenario relying on the system is quantitatively validated using an example. Furthermore, manufacturers are bound to pay carbon emission tax due to the carbon emission during the production process. Due to high non-linearity of the objective function, a numerical example is solved using the artificial hummingbird algorithm (AHA). From the numerical experiment, it is observed that the optimal policy of the system is strongly influenced by the price and duration of the warranty, emission taxation rate and moderately affected by the SAR of the product. Finally, a sensitivity analysis is carried out, and its effect are shown graphically in order to provide guidance to the competent manager of the firm.

A sustainable inventory model for deteriorating items with power demand and full backlogging under a carbon emission tax

Environmental degradation due to carbon emissions occurring in the production, storage and marketing of products has increased notably in recent years. To maintain a sustainable development, it is necessary to penalize commercial activities that generate high carbon emissions. This paper develops and analyzes a sustainable inventory system for a product whose demand follows a power pattern with respect to time. It is considered that the stock items have an estimated life period, after which a percentage of these items begins to deteriorate over time. The inventory system allows shortages which are fully backordered. Several sources of carbon emissions are considered in this article: transportation, stock holding and deterioration. The main objective is to determine the sustainable inventory policy that maximizes the benefit per unit of time, which is given by the difference between the income obtained from sales and the costs associated with inventory management and carbon emissions. Two scenarios are analyzed. In the first, the optimal inventory policy for a system without deterioration is derived. In the second, an algorithm to determine the optimal policy for an inventory system with non-instantaneous deterioration is proposed. Thus, our findings serve to determine the best inventory policy that helps decision-makers to obtain the lot size and the reorder point that maximize the profit per unit time under carbon emission taxes in transporting, storage and deteriorating of items. Some numerical examples are solved in order to illustrate the theoretical results previously obtained. Finally, a sensitive analysis of the optimal inventory policy with respect to some input parameters of the system is presented and interesting managerial insights from the numerical examples are proposed.

Carbon emissions reduction and tax evasion behaviour: a trade-off between environmental goals and economic feasibility

PurposeThis paper aims to examine the impact of carbon emissions (carbon dioxide [CO2]) reduction on tax evasion behaviour.Design/methodology/approachThis study uses data from 200 countries from 2000 to 2017. The empirical analysis is based on various methodological tools, including ordinary least-squares model, fixed- and random-effects models. In addition, GMM and linear mixed model has been used for robustness purposes.FindingsThe results show that carbon emissions reduction significantly affects tax evasion behaviour; when carbon emissions decrease, tax evasion behaviour increases. This indicates that the reduction of CO2 emissions is linked to significant costs, placing a financial burden on companies and leading them to evade taxes to counterbalance these costs.Practical implicationsThis study has important implications, as it highlights that the efforts made by countries to minimize CO2 emissions are associated with high costs and may lead to increased tax evasion, potentially contributing to countries’ budget deficits. The results provide valuable insights for policymakers and stakeholders to implement effective environmental and fiscal regulations that contribute to a sustainable and eco-friendly future. These regulations can help maintain a balance between improving economic growth and ensuring the protection of the environment.Originality/valueTo the best of the authors’ knowledge, this is the first paper to test the impact of carbon emissions on tax evasion using macro-level data.

Optimizing joint technology selection, production planning and pricing decisions under emission tax: A Stackelberg game model and nested genetic algorithm

In practice, manufacturers and their independent retailers in dyadic supply chains jointly make decisions by capitalizing on decision interactions while respecting the carbon emission tax and subsidy determined by local governments. Though studies have been published to address the joint decision-making, they involve only a very few of the important supply chain decisions due to the problem complexities. In this study, we, therefore, investigate a comprehensive joint decision-making of a manufacturer and his independent retailer considering both carbon emission tax and subsidy offered by the local government. The decisions in our study include i) the manufacturer’s technology selection, production quantities, and wholesale price and ii) the retailer’s retail price. Per the decision interactions, we analyze the decision-making problem as a Stackelberg game. The game model developed, by nature, is a bilevel 0–1 mixed nonlinear programming, and cannot be solved analytically. Considering its complexities, we further develop a nested genetic algorithm (NGA) to solve the model. Numerical examples demonstrate the applicability of the Stackelberg game model in facilitating supply chain members to jointly make decisions and the robustness of the NGA. With sensitivity analysis, we shed light on several important managerial implications, such as, manufacturers need to identify “optimal” ranges of emissions released from producing a unit of green (or dirty) product to obtain higher profits; manufacturers need to control well their production processes so that emissions released from producing a unit of product from a green (or dirty) technology fall in “optimal” ranges contributing to higher profits.