Emission Tax Research Articles

Transboundary watershed pollution control and product market competition with ecological compensation and emission tax: a dynamic analysis.

Product competition and pollution control are closely related to watershed environmental management, but existing literature rarely investigates them in an identical framework. Therefore, this paper develops a multiple differential game model to analyze product market competition and ecological compensation games between watershed regions based on the assumption that a region can choose four strategies to regulate its manufacturers while cooperating with other regions in the basin. Then, we solve the model and obtain a simultaneous equilibrium between the governments and manufacturers for the first time. The results show that the combination of emissions tax and ecological compensation results in the highest social welfare and water ecology for all regions in a basin. Furthermore, the ecological compensation rate independent of emissions tax policy and ecological compensation does not shift investment from downstream to upstream, but it can induce the upstream region to increase investment in management. In addition, if the governments impose an emissions tax, manufacturers' output in both regions decreases, and the upstream region is higher than in the downstream region.

Emission tax and strategic environmental corporate social responsibility in a Cournot–Bertrand comparison

This study considers the strategic relations between emission tax and environmental corporate social responsibility (ECSR) in a Cournot–Bertrand comparison and analyzes two different timings of the games between a tax-then-ECSR (T game) and an ECSR-then-tax (E game). We show that the T game always yields higher emission tax than the E game irrespective of competition modes, but lower ECSR under Cournot competition and higher ECSR when the marginal damage is high under Bertrand competition. We also show that compared with Bertrand competition, Cournot competition yields lower (higher) ECSR in the T (E) game but lower emission tax in the E game and higher emission tax when the product substitutability is low in the T game. We finally show that firms endogenously choose Cournot competition with the commitment of the E game irrespective of marginal damage and product substitutability.

Can Environmental Policy Encourage Technical Change? Emissions Taxes and R&D Investment in Polluting Firms

Abstract Higher country taxes on noxious manufacturing emissions lead to substantial increases in firms’ R&D spending. The R&D response is entirely driven by those high-pollution firms most affected by emissions taxes. Pollution taxes increase the marginal value of R&D spending in polluting firms, even when this spending does not lead to new innovation. Pollution taxes have the strongest effect on R&D investment in sectors in which new invention is difficult to appropriate and outside knowledge is easier to acquire, suggesting an important reason dirty firms invest in R&D is to expand their capacity to absorb external knowledge and technical know-how.

Green firm, brown environment

AbstractWe develop a theoretical model to examine the implication of a monopolist’s environmental consciousness, which induces it to adopt cleaner technology or to internalize negative environmental externalities of production or both, for the environment. Results show that greater environmental concern of the monopolist may damage the environment more, despite leading to lower emission intensity. This is true regardless of whether consumers value green production or not. This paper also draws implications of technology standard and emission tax as instruments for environmental regulation. This paper provides a theoretical underpinning of the rebound effect in production by showing that the voluntary pro‐environmental compliance behavior may not always mitigate the rebound effect. This suggests that a regulator should be cautious while designing regulatory mechanisms.

ECONOMIC AND LEGAL WAYS OF TRANSPORT INDUSTRY MODERNIZATION IN UKRAINE IN THE CONTEXT OF CLIMATE CHANGE

Abstract. There is substantiated the need to modernize the transport area of Ukraine in the view of state obligations adopted during the signing of international environmental agreements. It is argued that the adoption of the United Nations Framework Convention on Climate Change and its further implementation by the Kyoto Protocol and the Paris Agreement require the signatory States to take measures to minimize the anthropogenic impact of CO2 emissions in the earth’s atmosphere. A comparative analysis of the qualitative and quantitative composition of the fleet of transport industries of European countries and Ukraine proves that the minimization of environmental pollution by Ukraine should be done by renewal the fleet. Based on the statistics of the quality fleet of transport industries of European countries that practice CO2 emissions and those that who does not tax harmful CO2 emissions, it is demonstrated the dependence of the age — related conditions of the fleet, where the taxation demonstrates its incentive properties to modernize transport industries and renew fleets to modern vehicles. The characterization of global trends in minimizing of harmful emissions into the atmosphere of greenhouse gases gave a reason to argue that the implementation of an environmental tax has a dual nature. On the one hand, the tax encourages owners of enterprises, institutions, organizations of transport industry to invest in environmentally friendly transport to minimize the tax burden, and on the other hand, the taxation influences on the environmental situation in the regions and on the planet as a whole. It is substantiated that regulations aimed at minimizing harmful emissions into the atmosphere allow at the state level to implement policies on the formation, distribution and use of tax revenues for fighting climate change. It is concluded that tax revenues from the taxation of CO2 emissions into the atmosphere can be used to support the transport industry through public-private partnerships. It also emphasizes that Ukraine should intensify international cooperation and agree with developed countries to support the modernization of the Ukrainian transport industry using financial mechanisms and technology transfer agreements to increase resistance to climate change and reduce greenhouse gas emissions enshrined in the Paris Agreement. Keywords: climate change, harmful CO2 emissions, transport area, vehicles, international environmental agreements, regulations, environmental tax. JEL Classification F21, E62, K32, K34, R42, R48 Formulas: 0; fig.: 0; tabl.: 6; bibl.: 16.

Cooperative green innovation.

Cooperative green innovation is an important tool to cope with global climate change and this article highlights cooperative green innovation with game theory. Some interesting conclusions are achieved. First, emission tax stimulates the innovation for all firms. Second, free-rider phenomena appear in cooperative green innovation. When the cooperative green innovation requires big investment, firms have intention to launch free-rider. Finally, the underinvestment of cooperative green innovation exists. This article suggests to regulate innovative investment and to subsidize to improve cooperative green innovation.

When does environmental innovation crowd out process innovation? A dynamic analysis

It is known that environmental innovation may crowd out process innovation. Less known are the exact conditions under which crowding‐out effect occurs. This article fills the gap by developing a dynamic control model of environmental and process innovation. The result shows that when the depreciation rate of process innovation is sufficiently high, environmental innovation investment crowds out process innovation investment. By comparing monopolist and social planner optimum, we find that the problem of insufficient investments can happen for environmental and process innovation for a smaller emission tax.

WORLD EXPERIENCE OF CARBON TAXATION AND ITS IMPLEMENTATION INTO DOMESTIC PRACTICE

Purpose. The aim of the article is to study the global experience of taxation of carbon emissions and the expediency and possibility of its implementation into domestic practice. Methodology of research. The combination of both general scientific and specific research methods (in particular, methods of description and comparison, monographic, generalization, etc.) made it possible to substantiate the reasons for the insufficient effectiveness of the mechanism of taxation of carbon emissions and to modify it according to a stimulating approach. Findings. It is substantiated that the mechanism of taxation of carbon emissions currently operating in Ukraine is insufficiently effective and does not ensure the performance of the main function – the reduction of carbon emissions, which inhibits the fulfilment by Ukraine of its obligations regarding the reduction of greenhouse gas emissions determined in accordance with the Second Nationally Determined Contribution to the Paris Climate Agreement. Emphasis is placed on the urgent need to reform carbon taxation in order to create an effective mechanism that, without drastic interventions in the activities of economic agents, will ensure the effective influence of the state on their behaviour and the achievement of ambitious climate goals regarding the reduction of CO2 emissions, provided for by the Second Nationally Determined Contribution to the Paris Climate Agreement and the Low-Carbon Development Strategy of Ukraine until 2050. Originality. The mechanism of taxation of carbon emissions was modified, which, unlike the existing one, is based on an incentive approach that will stimulate economic agents to change consumer and production behaviour. Practical value. Implementation of the modified carbon emissions taxation mechanism in practice will contribute to the reduction of carbon emissions and Ukraine’s fulfilment of its obligations provided for by the Second Nationally Determined Contribution to the Paris Climate Agreement. Key words: mechanism of carbon taxation, tax on carbon emissions, tax rate, the system of monitoring and verification of carbon emissions, tax administration.

On the Evolutionary Interplay between Environmental Csr and Emission Tax

On the Evolutionary Interplay between Environmental Csr and Emission Tax

Pollution and Labor Market Search Externalities Over the Business Cycle

We study the relationship between unemployment, environmental policy, and business cycles. We develop a dynamic stochastic general equilibrium real business cycle model that includes both a pollution externality and congestion externalities from labor market search frictions, which generate unemployment. We consider two policies to address the market failures: an emissions tax and a tax or subsidy on job creation. With both policies present, the efficient outcome can be achieved. When one policy is constrained or absent, we solve for the second best. The absence of a vacancy policy to address the congestion externalities substantially affects the value of the emissions tax, both in steady state and over the business cycle. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

On the Evolutionary Interplay between Environmental Csr And Emission Tax

On the Evolutionary Interplay between Environmental Csr And Emission Tax

Cross Ownership, Green Delegation and Emission Taxation

Cross Ownership, Green Delegation and Emission Taxation

Cross Ownership, Green Delegation and Emission Taxation

Cross Ownership, Green Delegation and Emission Taxation

Підвищення ролі будівельної галузі у сповільненні глобального потепління

The work reveals the current state of problems related to the growth of emissions greenhouse gases and environmental temperature due to excessive burning of fossil fuels (oil, coal, natural gas). The analysis of the implementation of the European experience is given introduction of taxation of carbon dioxide emissions, which had a positive effect on sales energy saving and reduction of greenhouse gas emissions. It is shown that the G20 countries account for 78 % of global greenhouse gas emissions, therefore they play a critical role in global mitigation efforts climatic changes. Indicators of Ukraine’s actual global carbon dioxide emissions and international obligations to reduce them and achieve climate neutrality are presented. The potential consequences for the country’s economy of the implementation of the cross-border mechanism have been revealed carbon border adjustment mechanism (Carbon Border Adjustment Mechanism — CBAM), a comparative analysis of taxes on greenhouse gas emissions in Ukraine and other countries is given. There have been generalized modern methods of utilization of carbon dioxide by its use in technologies for the production of cement concrete, fuel and other materials. The construction industry consumes up to 40 % of all energy carriers used in the country has huge reserves of saving energy resources. It is shown that it is an effective solution reducing greenhouse gas emissions and increasing global temperature remains implementation of low-clinker cement, non-metallic construction materials technology fittings Planting bushes, trees, landscaping walls and roofs, parking lots remain a recognized direction of landscape design and serve as a natural mechanism improvement of ecology. It is shown that the reduction plays a decisive role in the reduction of global warming the use of fossil fuels with subsequent abandonment of them in favor of RES. Expansion of the use of pellets for heating, implementation of green standards for new construction and insulation of the outdated housing stock will contribute to the reduction of energy consumption in construction.

TRIBUTAÇÃO DO CARBONO NA AMÉRICA LATINA E PERSPECTIVAS PARA O BRASIL

This paper presents an analysis of carbon taxation, that is, the taxation of greenhouse gas emissions, in Latin American countries. This research aims to draw a parallel between foreign and Brazilian legislation, to promote the discussion on the use of economic mechanisms to control CO2 emissions in the country. For its realization, bibliographical and documental research was carried out, as well as the study of the specific legislation of the countries that instituted such taxation in their legal systems. Mexico, some of its states, Chile, Colombia, and Argentina tax carbon in some way. Despite not being the only market mechanism or policy to control and reduce GHG emissions, carbon taxation is shown to be the most viable market mechanism for developing countries, given its low complexity and implementation costs.

Asymmetric impact of economic growth, financial development and energy consumption on CO2 emissions in Vietnam

This study aims to investigate the asymmetric effects of economic growth, financial development, and energy consumption on CO2 emissions in Vietnam over the period 1995–2020. By doing so, we employ Quantile on Quantile Regression introduced by Sim and Zhou (2015) and Granger Causality in different quantiles developed by Troster (2018). Our findings indicate that there is a positive influence of economic growth, financial development, and energy usage on CO2 emissions at most quantiles, which implies that these macroeconomic factors would increase CO2 emissions in this country. In addition, economic development requires more energy, resulting in a rise in environmental degradation is inevitable in the short run. Nevertheless, it is necessary for Vietnam to pay attention to enhancing the use of clean energy and controlling CO2 emissions in order to achieve sustainable development. Furthermore, financial policies are able to support the development of renewable energy and contribute to reducing CO2 emissions. The Vietnamese government should develop a rough, transparent, and relatively stable policy mechanism in the long run, including emission benchmark, tax incentives and other incentives to encourage private investment and foreign direct investment participating in the process of technological innovation, clean energy and renewable energy.

Using Energy and Emissions Taxation to Finance Labor Tax Reductions in a Multi-Sector Economy

Using Energy and Emissions Taxation to Finance Labor Tax Reductions in a Multi-Sector Economy

MODEL OF THE MUTUAL INFLUENCE OF ENVIRONMENTAL ASPECTS AND ENERGY RATIONING ON TRAIN TRACTION IN RAILWAY LOGISTICS

The article deals with the issues of environmental taxation of carbon dioxide emissions by the countries of the European Union and the methodology for calculating the amount of emissions by regulatory documents of Ukraine. It is established that our country's methodology is not adapted to real operating conditions under the influence of cross-border carbon taxation and the "Emissions Trading System". A mathematical model of the impact of power generating stations of states and their contribution to the overall energy balance of the country on the environmental cost and mass emissions of 1 kWh of electricity generation is proposed. The amount of electricity losses during its transportation from the power plant to the electric moving warehouse is determined and is taken into account in the total amount of deductions for the "Emissions Trading System" for DC and AC railway networks. Schemes of transit and local cargo routes are considered on the basis of a real fleet of traction rolling stock of Railways and a network of logistics lines. The passport characteristics of locomotives are analyzed and the amount of emissions and deductions during operation at Rated mode and idle speed is determined. Specific norms for selected routes and train conditions are calculated. The total costs, their cost and the amount of emissions and taxation of selected routes are determined, and rational economic and environmental logistics lines of train traffic are determined on their basis.

Strategic non‐use of the government's precommitment ability for emissions taxation: Environmental R&D formation in a Cournot duopoly

AbstractThe primary focus of this paper is to examine the link between environmental R&D formation and the strategic use or non‐use of a government's ability to precommit to an emissions tax rate. The existing literature implicitly omits this important matter. This paper comprehensively evaluates various regulatory contexts separated by the timing of emissions taxation and by environmental R&D formations in a Cournot duopoly. The following three points are revealed. First, an equilibrium occurs in which the government does not strategically use its emissions tax rate precommitment ability to enhance social efficiency. Second, if the efficiency of environmental R&D costs is high and if environmental damage is serious, then the government should precommit to an emissions tax rate and allow for the cartelization of the two firms' environmental R&D. However, if the environmental R&D cost efficiency and environmental damage are both low, then the government should adopt a time‐consistent emissions tax and allow for the cartelization of the two firms' environmental R&D. Third, when the two firms can form an environmental research joint venture (ERJV), ERJV cartelization should be invariably allowed, even if the government is a strategic non‐user of its precommitment ability.

Designing an optimal sustainable supply chain system considering pricing decisions and resilience factors

Nowadays, sustainability has become an integral part of industries and supply chains, which are facing the risk of unpredictable disruptions. Therefore, the capability of the supply chains to thwart the harmful effects of disruptions using preventive and recovery policies cannot be neglected. In this respect, this study addresses bi-level programming to optimize a sustainable supply chain by considering resilience factors and pricing decisions. Moreover, it is defined how the governments can optimize and affect environmental and social responsibility by setting an emissions tax rate. In the developed model, Stackelberg game model is employed while the government is considered as the leader and the manufacturer as the follower. Furthermore, the results of the model are compared with the centralized one indicating that the centralized model will result in a better solution for both the manufacturer and the government. Moreover, the results express that keeping emergency stock strategy always is suggested but considering multiple suppliers and extra reserved capacity are not always preferable for mitigating the adverse effect of disruptions in the investigated case study. For highlighting the efficiency of the proposed model, it has been implemented in a real case, and the managerial insights ensuing from the results of the case study are provided.