Carbon Tax Scheme Research Articles

A discourse analysis of yellow-vest resistance against carbon taxes

Carbon taxation is a core instrument for climate mitigation. Its implementation, however, faces popular resistance. In this paper we study one of the most emblematic mobilizations triggered by the carbon tax issue, the Yellow Vest movement in France. We use Q-methodology, a mixed-method approach to identify discourses (or viewpoints) held by protesters. We find four statistically-distinctive viewpoints, emphasizing respectively: a systemic critique of capitalism; environmental action that is fair; priority over incomes and purchasing power of common people; and inequality and the responsibilities of corporations. Our research points to the importance of ideology in shaping viewpoints and filtering attitudes towards carbon taxes. Yet beyond ideological differences, we find consensus among all discourses, in that there should be more consultation in energy transition policy; the rich and not the poor should pay the cost of transition; and the government should use tax revenue for the transition only. We conclude that, for bold carbon tax schemes to be implemented with less conflict, a much more participatory, transparent and equitable design would be necessary than the one experienced in France.

How does a carbon tax affect Britain’s power generation composition?

The purpose of this paper is to determine the effect of different carbon tax rates on the power generation composition of Britain. This was accomplished via a regional, geospatial model, accounting for regional loads, transmission losses and generators of Britain’s current energy infrastructure. This regional model is also compared to a pure dispatch, nationally aggregated model which considers only costs on the generator side inclusive of the carbon tax, thus allowing the effect of including geospatial conditions to be identified. The effect of this tax (in both the geospatial and nationally aggregated cases) is a transition from coal to combined cycle gas turbine (CCGT) generated power to fulfil demand unmet by nuclear or renewable sources. The more sophisticated regional model, however, differs from the nationally aggregated case by having a significantly larger window of carbon tax rates over which this coal to CCGT transition occurs. Due regional differences in demand and installed capacity technology types it is determined that more than 50% of this transition occurs prior to CCGT becoming more economical than coal from a pure dispatch (nationally aggregated) perspective. Primarily due to CCGT generators typically being closer to larger southern loads than northern coal, transmission losses and the economic disincentive of a carbon tax combine in encouraging this transition. The transition window, therefore, is not only broadened by the consideration of geospatial effects, but furthermore, this broadening significantly and disproportionately occurs by decreasing the lower bound of this transition window. These findings validate the significance of utilising a geospatial model, particularly of regional resolution. They further identify the deployment of current energy infrastructure in Britain under differing carbon tax regimes and by extension, the transition window (found to be from coal to CCGT) an increasing carbon tax rate would create. These results bear not only significance in understanding the UK’s currently incrementing (top-up) carbon tax rate, but also shed light on future policies due to the UK’s leaving of the EU’s Emissions Trading Scheme (ETS), with immediate plans to continue with a domestic carbon tax and trading scheme. Thus, these results hold importance in the understanding the effect of carbon taxation on existing infrastructure, energy modelling and national policy in the UK.

Segmented carbon tax may significantly affect the regional and national economy and environment-a CGE-based analysis for Guangdong Province

Facing the conflicts of climate change, energy consumption, carbon emission, and economic development, it is essential to investigate the impacts of the carbon tax policy implemented in specific regions. A CGE-based multi-dimensional carbon policy (CMDCP) model is developed to i) explore the inter-provincial interdependences by interfering with the economic policies of a single province, and ii) quantify interactive relationships among various components including climate, energy, carbon economy and tax. Integrated approach of computable general equilibrium model and input-output analysis is applied to a series of segmented carbon tax schemes for Guangdong IC modeling and China IE modeling. It is found that when the carbon tax rate is 100 yuan/ton, the GDP of Guangdong will fall by less than 0.5% under three scenario types. At the same time, they could bring 1.3, 1.2 and 1.6 million tons of emission reductions. Levying the carbon tax based on the difference in carbon emission volume is most beneficial for emission intensity reduction. For China, the impact of the segmented carbon tax in specific province has a slight impact on the entire supply chain emissions. It is suggested that a carbon tax of 10–40 yuan/ton could be adopted by Guangdong. Moreover, Guangdong could consider implementing the stepped carbon tax for it can effectively avoid the lack of flexibility of traditional carbon tax policy.

Incentive-based policy to promote the production of geothermal power from carbon tax scheme: A case of Indonesian CGE model

Indonesia has the largest geothermal potential resources in the world, however, its current utilization rate is about 6% of total geothermal potential. This paper investigates the impact of imposing the carbon taxation on fossil fuels and the tax is then allocated to incentivize the geothermal electricity supply. The results show that carbon taxation can effectively reduce the national GHG emissions. In the scenario of imposing the carbon tax only on coal consumption, the economy tends to improve better than imposing the tax on all types of fossil fuels. This finding indicates that the policy could only reduce the total production cost of electricity supply, but cannot offset the increased price of fossil fuels due to carbon tax. Our analysis also shows that a revenue-recycling scheme of carbon tax on coal uses by reducing the electricity price will lead to welfare improvements and inequality reductions since coal is only consumed in the industrial sector.

CAN CARBON TAX COMPLEMENT EMISSION TRADING SCHEME? THE IMPACT OF CARBON TAX ON ECONOMY, ENERGY AND ENVIRONMENT IN CHINA

The problems of excessive CO2 emissions and global warming caused by human activities are becoming more serious. Carbon Tax (CT) and Emission Trading Scheme (ETS) are popular emission mitigation mechanisms. This paper establishes four counter-factual (CF) scenarios with different CT rate, and constructs a dynamic recursive computable general equilibrium (CGE) model, named China Energy-Environment-Economy Analysis (CEEEA) model, to study the impact of different CT rate on the economy, energy and environment. The results indicate that if CT complement ETS, and the cap of ETS is based on grandfathering method, the carbon trading price will reduce due to the changes in carbon allowances demand and supply. CT can share the mitigation pressure from ETS coverages into non-ETS coverages. When CT complement ETS but nothing is changed in mechanism of emission trading, the total emission mitigation effect will reduce slightly but the mitigation cost will reduce significantly. All in all, using CT as the supplement is a good mitigation strategy to release Gross Domestic Product (GDP) loss. But if we want to get more mitigation effect, rising CT rate or a stricter carbon cap may help.

The flight is valuable regardless of the carbon tax scheme: A case study of Norwegian leisure air travelers

Abstract Various countries have introduced a carbon tax on air travel. Carbon taxation is controversial in that it may negatively influence tourism demand. Still, research investigating travelers' willingness to pay (WTP) such taxes is limited. This study explores Norwegian leisure air travelers’ willingness to pay higher carbon taxes than that already included in their ticket price, applying the contingent valuation (CV) method in an experimental design. The impact of eight hypothetical taxation schemes are tested to provide insight into how regulatory policies can be developed so as to improve acceptance for carbon taxes. Results show that Norwegian outbound tourists are ready to accept higher carbon taxes and that WTP is not strongly related to the taxation scheme. This suggests that there exists a scope for policymakers to implement more stringent taxation regimes on air travel than seen today.

Research on a single policy or policy mix in carbon emissions reduction

Existing literature on the optimal type of carbon mitigation policy and whether it is better to apply a policy mix instead of a single policy is still unclear. This paper assesses the policy effectiveness under exogenous shocks by applying a dynamic stochastic general equilibrium (DSGE) model. Comparing the differences between the carbon mitigation and economic impacts of a policy mix versus a single policy (carbon tax or carbon trading scheme), the results showed that energy demand is rigid in response to technological shocks. Therefore, there is no significant difference for the energy consumption related carbon emissions in response to the technological progress under three different policy scenarios: a carbon tax (scenario I), a carbon trading scheme (scenario II), and a carbon policy mix (scenario III). Overall, carbon emissions policy has a negative impact on the economy, compared to the other two policies, a carbon trading scheme has a relatively slight impact on the economy. A mandatory carbon price would have a more significant impact than would a market-based carbon price. The policy mix formed by a carbon tax and a carbon trading is comprehensive in terms of both price flexibility and coverage scope.

DESIGNING A GLOBALLY ACCEPTABLE CARBON TAX SCHEME TO ADDRESS COMPETITIVENESS AND LEAKAGE CONCERNS

To address competitiveness and leakage concerns in international climate policy, this paper proposes a differentiated carbon tax scheme (DCT), which largely preserves the relative competitive positions of developed and developing countries. The paper first presents a theoretical model from which to derive the DCT. Then, employing a global trade analysis model, competitiveness and leakage effects under a DCT are simulated and contrasted to those of a unilateral carbon tax, a carbon tariff, and a uniform carbon tax. The results of our analysis suggest that: (1) under the proposed DCT, emission reductions in developed and developing countries are higher and leakage is lower than under a carbon tariff; (2) the DCT has weaker competitiveness effects than a carbon tariff; and (3) the DCT is more favorable to developing countries’ output and welfare than a carbon tariff or a uniform global carbon tax. Developing countries may therefore embrace a DCT as an intermediate step towards the implementation of a global carbon tax.

Impact of Carbon Tax Scheme and CO2 Control Technologies on Bangladesh Aviation Industry

Aviation transport action group reported that carbon dioxide (CO2 ) emission of airlines in 2017 was 859 million tons which is 2% of global emissions, (Akça, Z. 2018). It adds that the bank has calculated that “under the worst case ‘carbon intensive’ scenario, living standards will fall by 6.7% for Bangladesh by 2050”. This paper investigates how Bangladesh can respond to best optimize to the EU’s Aviation Carbon Tax Scheme proposed by the Stackelberg game model. The analytic result shows that the strategy “refusal of pay” is the best one which Bangladesh is taking step of. Numerical simulations specify a quantitative visual of the consequences found. The policy is found to be effectively not flying as much would reduce the CO2 emission and consequently, purchase of new aircraft, retrofitting and upgrade improvements on existing aircraft, latest designs in aircraft/engines, fuel efficiency standards and alternative fuels etc. reducing the overall emissions. The main contribution of this paper is to study a new international issue for developing country on aviation carbon tax and CO2 emissions policy suggestions for the aviation technology.

Does a carbon tax affect the feasibility of Arctic shipping?

The Arctic route has huge potential for shipping between Europe and Northeast Asia with significant savings in transit time and distance. However, GHG emissions from shipping would harm the environment of Arctic area. Potential Market Based Measures of GHG emission reduction (such as carbon tax) are under consideration but they may affect the economic viability of Northern Sea Route (NSR) for containerships. This paper investigates the economic viability of NSR against Suez Canal Route (SCR) under 2 proposed carbon tax schemes (fixed vs. progressive). Three different fuel oil types (Heavy Fuel Oil, Light Fuel Oil, Liquified Natural Gas) are used as main bunker fuel for the calculation of economic feasibility. Our result reveals that when there is no carbon tax on NSR nor SCR, or both routes are under a carbon tax scheme, no matter fixed or progressive, NSR is more economically viable, regardless of fuel type choice. When only NSR is under a carbon tax scheme, the viability depends on specific carbon tax scheme and fuel choice, but for the majority of containership sizes, NSR has lower unit cost. The result also suggests that for a given route, a progressive scheme in preferable than a fixed one and LNG would be an appealing fuel with lower unit cost.

An Optimal Production Policy Model Considering Defective Items in the Context of Carbon Tax Scheme

Carbon tax scheme is one main low-carbon policy to curb carbon emission. This paper develops an optimal production policy model with defective items in a single production period under carbon tax scheme. We assume that the demand for perfect items is price-sensitive and environment-sensitive and the defective items can always be sold. Firstly, we get the optimal production policy and the maximum expected profit. Secondly, we analyze the effect of some parameters emphatically and the results show that when the tax rate is low, firm can’t utilize the optimal production policy unless the rate of perfect product is high. We also find that the optimal production lots may increases when the rate of perfect product increases and the profit may decreases in the same situation, which is inconsistent with intuition.

Fixing long-term price paths for fossil energy – the optimal incentive for limiting global warming

Neither a gradually rising carbon tax nor emission trading schemes can ensure that the costs of emitting greenhouse gases, in particular CO2, will steadily rise faster than the general price level. If, e.g., global fossil energy prices decline faster than a carbon tax or the emission permit price rises, then the final good and its use become cheaper. Since the prices of fossil energy as well as CO2 emission permit prices belong to the most unstable prices in the global economy, carbon taxes and trading schemes cannot anchor the long-term expectation that the effective emission costs for firms and households will rise continuously. Such an expectation, however, is a prerequisite for steadily growing investment in energy efficiency and/or renewable energy because the profits from such investments consist of the saved fossil energy costs (“opportunity profits”). This paper presents an alternative approach: The EU sets a path of steadily rising prices of crude oil, coal and natural gas by skimming off the difference between the EU target price and the respective world market price through a monthly adjusted quantity tax. Instead of the prices of fossil raw materials, the (implicit) quantity tax should fluctuate. In this way, the uncertainty about future price developments of crude oil, coal and natural gas and, hence, of the effective emission costs would be eliminated. Firms and households could calculate the profitability of investments in avoiding carbon emissions. At the same time, such a tax would ensure a uniform European carbon price in all sectors, provided the initial level of the price paths of crude oil, coal and natural gas account for the different CO2 intensities of these types of fossil energy. Given the size of the EU import bill for fossil energy, the amount of potential receipts of such an implicit and flexible CO2 tax would be (very) huge.

Policy measures to promote mid-summer drainage in paddy fields for a reduction in methane gas emissions: the application of a dynamic, spatial computable general equilibrium model

Rice production is affected by climate change, while climate change is simultaneously accelerated by methane gas (CH4) emissions from paddy fields. The rice sector must take suitable mitigation measures, such as prolonging mid-summer drainage (MSD) before the rice flowering period. To propose a mitigation policy, this study aims to demonstrate the environmental and economic effects of MSD in Japanese paddy fields by using a dynamic, spatial computable general equilibrium (CGE) model and crop model; the study also considers environmental subsidies with a carbon tax scheme to promote MSD measures. The results demonstrate that climate change under the 8.5 representative concentration pathway (RCP) scenario will reduce rice prices and rice farmers’ nominal income due to bumper harvests until the 2050s. Promoting MSD in paddy fields can prevent a decrease in farmers’ nominal income and effectively reduce CH4 emissions if all farmers adopt this measure. However, some farmers can potentially increase their own yield by avoiding MSD under high rice prices, which would be maintained through other farmers’ participation. A strong motivation exists for some farmers to gain a “free ride,” and an environmental subsidy with a carbon tax can help motivate farmers to adopt MSD. Therefore, the policy mix of prolonging MSD and environmental subsidies can increase all farmers’ incomes by preventing “free rides” and decrease greenhouse gas emissions with a slight decrease in Japan’s GDP.

The full energy cost of avoiding CO2: A clean-energy booking provision for a vigorous energy transition

Carbon tax, emission trading schemes and externality disclosures have not provided the incentive to replace fossil-carbon sourced energy as envisioned at the Paris Agreement 2015. Much of the enforcement of these schemes is outside the fossil hydrocarbon producer's control. As an alternate to these schemes, this paper proposes an inventive evaluation and accounting procedure, based on the energy penalty cost of decarbonizing fossil fuels. Such cost can be internalized within the producer's books, and provide the required incentives, including provisions for the deployment of carbon-free fuels. In the inspiring thermodynamics of hydrocarbon to hydrogen conversion in a closed system using hydrogen combustion to decompose the hydrocarbon, we find a penalty of 0.56 J for each Joule available in the original hydrocarbon. Applying energy market price range of 150e500 $/t methane and molecular mass-conversion to CO 2 equivalent, results in costs ranging from 60 to more than 200$/t CO 2. They are well above current carbon tax or emission trading schemes prices. They quantify the required incentives to cleaner (C-free) production yielding prompt emission reduction in the producers' market. We show how similar penalties accrue from a broad spectrum of industrial hydrogen production processes using hydrocarbons. Among those, methane pyrolysis produces carbon-free energy from fossil fuels, with non-combustion promising applications for its carbon production.

Impacts of the Québec carbon emissions trading scheme on plant-level performance and employment

In 2013, Québec implemented a greenhouse gas (GHG) emissions trading system (QC ETS), despite opposition from industry, which feared loss of competitiveness and warned about job destruction. This article assesses the impact of that carbon regulation on industrial facilities in Québec. Conditional difference-in-differences ordinary least squares regressions show that regulated plants reduced their GHG emissions by about 9.8%, employment by about 6.8% and carbon intensity by about 3.7% more compared to non-regulated plants in the rest of Canada during the period 2013–2015. This suggests that facilities adapted to the new program by improving their technology, but first and foremost by scaling down their activity, which raises questions about the ability of the QC ETS to induce enough environmental investment and innovation in industrial facilities. The results, in terms of employment effects, contrast with the findings of similar studies on the early stages of the European ETS and the British Columbia carbon tax scheme, and this information challenges the initial allocation scheme for permits, in particular, with a view to a green fiscal reform.

Optimal Robust Ordering Quantity for a New Product Under Environmental Constraints

Rapid new product introduction is an effective method for firms to capture market share. Considering the growing concerns of environmental threats, firms are under intense pressure to measure their impacts on the environment. Before launching a new product, a firm should make the appropriate decision regarding the order quantity with incomplete information to achieve the goals of both profit maximization and environmental threat minimization simultaneously. In this paper, distribution-free news vendor models with the environmental constraints are proposed to obtain efficient order decisions. The models are formulated based on the absolute minimax regret criterion. Based on the moment bound problem framework, the models are translated into a semi-infinite linear optimization problem. In addition, the closed-form solutions of the robust order quantities and carbon emission volumes are derived. The characteristics of effective order decisions are discussed under three types of carbon emissions regulations (i.e., the carbon capacity policy, carbon tax scheme, and carbon trading mechanism). By analyzing the product characteristics from both economic and environmental aspects, four possible new product introduction strategies are proposed that the firm might employ under different environmental constraints. The characteristics of the optimal order quantity are also investigated under three carbon emissions regulations across four new product introduction strategies.

Feasibility analysis of China’s carbon taxation policy responding to the carbon tariff scheme of USA

Aimed at determining whether China’s active carbon emission reduction policy can respond to the threat of carbon tariff of the USA, this study proposed two kinds of carbon tax schemes for the USA and China, same carbon tax policy and a differential carbon tax policy. Four scenarios are set: the USA only charging carbon tax on domestic products; the USA charging carbon tax on domestic products and carbon tariff on imported products from China; the USA and China taking the same carbon tax policy on domestic products; the USA and China taking the differential carbon tax policy on their domestic products. Global Trade Analysis Project Energy model is applied to discuss whether China’s active measure to reduce carbon emissions can be an effective solution to the threat of carbon tariff of the USA. The research results show that China’s active measure of the same carbon tax policy as the USA is not effective to cope with carbon tariff of the USA. However, it is an effective measure to take a differential carbon tax policy. The specific policy implications of the study are discussed in conclusion.

The Carbon Tax Vacuum and the Debate About Climate Change Impacts: Emission Taxation of Commodity Crop Production in Food System Regulation

The scientific consensus on climate change is far ahead of U.S. policy on point. In fact, the U.S. has a legal vacuum of carbon taxation while climate change continues to impact the codependence of agriculture and the environment. As this Article shows, carbon taxes follow the polluter-pays model, levying taxes on the highest greenhouse gas (“GHG”) emissions — and contributions to climate change. But this is not only unsustainable; it would also undermine agricultural production and, thus, food security. This Article describes how the law can regulate climate change contributions and promote adaptation and mitigation strategies. If climate change adaptation and mitigation are not supported through carbon taxes in the agricultural sector, twenty percent of GHG contributions will be left untouched, jeopardizing the future of U.S. food production at the environment’s expense. This Article reveals new avenues of climate change adaptation and mitigation through carbon taxation of genetically modified (“GMO”) commodity crops to bring the carbon tax to a previously overlooked contributor to climate change: intensive agriculture. However, adapting to and mitigating the effects of climate change, such as extreme weather events, droughts, and floods, can only be accomplished through concerted efforts of various industries, governments, and the public like cap-and-trade or carbon tax schemes imposing blanket limits on GHG emissions.

Green Procurement Relationships Development under Carbon Emissions Regulations: A Bi-Level Programming Approach.

A multi-period Stackelberg game is adopted to study a green procurement relationship between manufacturers and suppliers in a supply chain. The manufacturers are considered as leaders, while the suppliers are modelled as followers in this Stackelberg game. Accordingly, a mixed binary linear bi-level programming model is developed to elaborate the game in consideration of carbon tax scheme. The upper level (the leader) aims at selecting a proper number of suitable suppliers to provide heterogeneous raw materials at the lowest operational cost. The objective of the lower level (the follower) is to find optimal purchasing quantities of raw materials. In addition, two lemmas are introduced to transform the mixed linear bi-level programming model into a single level linear programming model. The numerical example illustrates that: (1) the manufacturer prefers to adopt the multiple sourcing strategy due to the flexibility; (2) keeping stable supplies and large order volumes could effectively reduce carbon emissions for the suppliers and make the supply chain greener.

Equity and the willingness to pay for green electricity in Germany

The production of electricity on the basis of renewable energy technologies is often discriminatively financed: the German energy-intensive sector, for instance, benefits from a far-reaching exemption rule, while all other electricity consumers are forced to bear a higher burden in the form of a higher surcharge on the net price of electricity. Here, we demonstrate that reducing this inequity in cost burden substantially raises household willingness to pay for green electricity. In a stated-choice experiment among about 11,000 households, participants who were informed about the energy industry exemption were less likely to accept an increase in the fixed surcharge per kilowatt hour than those who were not informed. However, participants who were informed about the industry exemption but then told that it would be abolished had significantly higher acceptance rates. This suggests that reducing inequity in the distribution of the cost burden increases the acceptance of bearing these costs. This outcome may have far-reaching implications for policymaking that extend to other domains where exemptions exist, such as carbon tax schemes. The cost of green electricity is unfairly distributed, with consumers paying more while industry actors are subsidized. Here, the authors find that reducing the inequity in cost burden by abolishing exemptions increases consumer acceptance of these costs.