Fuel Tax Research Articles

Measuring long‐run gasoline price elasticities in urban travel demand

AbstractI develop a structural model of urban travel to estimate long‐run gasoline price elasticities. I model the demand for transportation services using a dynamic discrete‐choice model with switching costs and estimate it using a panel dataset with public market‐level data on automobile and public transit use in Chicago. Long‐run own‐ (automobile) and cross‐ (transit) price elasticities are substantially more elastic than short‐run elasticities. Elasticity estimates from static and myopic models are downward biased. I use the estimated model to evaluate the response to several counterfactual policies. A gasoline tax is less regressive after accounting for the long‐run substitution behavior.

Correcting Heterogeneous Externalities: Evidence from Local Fuel Taxes

The demand for automobile transportation and the external costs of driving vary widely across locations. However, gasoline taxes, the most common policy tools implemented to correct these externalities, are levied uniformly at the federal and state levels. I examine how a gasoline tax that reflects the heterogeneity in demand and damages can improve efficiency. I estimate county-level travel demand elasticities and congestion damages to compare the efficiency of state gasoline taxes to county-specific fuel taxes. Because elasticities, congestion damages, and pollution damages exhibit heterogeneity across regions, county-specific fuel taxes, largely levied in major metropolitan areas, provide consumer welfare gains between $5 and $30 per capita annually in addition to equity gains relative to revenue-neutral state fuel taxes.

Вплив адміністрування екологічного податку на вартість теплової енергії в Україні

The article provides an overview of approaches to greenhouse gas emissions taxation and tax rates in European countries. To compare heated boilers with different characteristics, which run on different fuels the average cost of thermal energy for the life cycle LCOH was used. Environmental tax on environmental pollution (as a component of LCOH) is calculated for the three most common types of boilers in Ukrainian boilers with a capacity of 4.65 to 58 MW, burning natural gas, coal, and fuel oil, as well as for low-power boilers (0.5 and 1 MW ), burning fossil fuels and biofuels. The eco-tax for biofuel boilers is calculated under current taxation and subject to the adoption of a European approach to taxation of carbon dioxide emissions. It is established that at the current rates there are almost no economic incentives for the introduction of technologies to reduce the concentration of pollutants in emissions, but increasing the rates of environmental tax may change this situation. However, provided that rates are evenly increased for all types of boilers, the eco-tax for natural gas boilers will remain the lowest, while for biofuel boilers it will increase significantly, which contradicts the stated goal of decarbonizing the economy. It is shown that not only the change of environmental tax rates can be an effective tool for achieving the goals of sustainable development, as the principles of its administration are also important.

Balancing equity, environmental and growth objectives: a case study of electricity subsidy reform in a large polluting developing country

ABSTRACT This article examines the impact of Indonesia’s electricity reform and meeting its 2030 carbon emissions and 2050 renewable energy targets on the country’s economic growth, carbon emissions and poverty and income distribution. Simulation results from a dynamic computable general equilibrium model show that energy reform and carbon tax in Indonesia have a regressive impact while the gasoline tax has a progressive impact. Of the two demand side policies, gasoline tax was found to be more harmful than the carbon tax, resulting in GDP loss, declining investment, higher energy prices, and rising urban and rural poverty. A hybrid policy comprising a renewable energy mix target (supply side policy) and a carbon tax (demand side policy) is a viable option for minimising GDP loss, income disparity and carbon emissions. However, the transition towards renewable energy use is fraught with challenges for Indonesia.

Riding to Learn, Learning to Ride: Early School-busing in Connecticut, 1900–1945

Riding to Learn, Learning to Ride: Early School-busing in Connecticut, 1900–1945

A novel quantitative forecasting framework in energy with applications in designing energy-intelligent tax policies

Energy, monetary and fiscal policies are going to play a crucial role towards the broad transformation of global energy. The design and optimization of these policies as well as the efficacy in achieving the desirable results require quantitative approaches. In this study, we extend the methodology of our novel quantitative framework, the Energy Price Index (EPIC) that represents the average price of energy in the US, to the design, optimization and assessment of energy-intelligent tax policies. The non-availability of actual energy demand and price data for the recent months is addressed with the introduction of a rolling horizon methodology that demonstrates excellent forecasting ability over a testing period of 181 months. The mean absolute percentage error of the initial and the 2nd adjusted EPIC are just 2.71% and 1.02% respectively over this period, with the forecasting framework demonstrating excellent robustness even during the unprecedented pandemic of COVID-19. The same framework can be used to forecast the energy demands for the next four years. Two case studies for energy-intelligent tax policies are presented, investigating parametrically the effects that a gasoline tax hike and a carbon tax could have retrospectively and prospectively. A hypothetical gasoline tax hike of 15 cents per gallon would increase EPIC by 1.6%, with the greatest increase of 3.67% being associated with the transportation sector (TEPIC). This policy would result in an estimated annual average revenue of $20.253 billion. Likewise, a hypothetical incremental carbon tax hike over the next 10 years would lead in substantial reductions in CO2 emissions, while the average price of energy would increase by just $1.5/MMBtu, generating though more than $110 billion in annual revenue.

Comparative Analysis of the Effect of Direct and Indirect Taxation Revenue on Economic Growth of Nigeria

The study was conducted to comparatively analyse the effects of direct and indirect taxation revenue on economic growth of Nigeria. This was necessitated by the revenue shortfall from Crude oil sales which has been the main revenue earner of the government and the latent potentials of taxation as the most reliable source of revenue. The study was designed to find out which of the tax category affect economic growth most in Nigeria. Ex post facto research design was the research design involving secondary data extracted from the Central Bank of Nigeria (CBN) and Federal Inland Revenue Service (FIRS) published reports. Data were analyzed using descriptive and inferential statically techniques using correlational and regressional statistics. Results reveal that direct taxation has more negative effect on the economy than indirect taxation as evidenced by the adjusted R2 (Direct taxes 80%; Indirect taxes 67%, case wise predictive residuals (maximum values: direct taxes 6.123, indirect taxes 5.893). It was therefore recommended that the government should review regulatory and operational guidelines at the oil and gas sector and tax reforms in the form of reliefs and other incentives to companies to encourage investors and boost productive activities to enhance economic growth of the country.

Gasoline demand elasticities in the world’s energy gluttons: a time-varying coefficient approach

In this paper, we estimate the price and income elasticities for gasoline demand in selected energy gluttons-China, India, USA, Russia, and Japan. Specifically, we employ a time-varying parameter approach which adequately deals with potential parameter instabilities and nonlinearities and effectively captures price and income elasticity variations over time, with each time period having its own set of coefficients. Our empirical findings reveal the following: gasoline consumption is price-inelastic and income-inelastic, there are movements in both the price and income elasticities, and the movements generally correspond with business cycle patterns of each of the countries; overall, sensitivity to price and income changes increase during periods of economic crises. Constant elasticity models overestimate price and income elasticities, and income is predominantly more elastic than price. Our conclusion is that policy mechanisms that are price-based such as gasoline taxes are likely to be unsuccessful in achieving consumption-cum-pollution reduction objectives in the energy gluttons. Such policies may, however, be effective if they ensure that gasoline prices rise at a greater rate than income. Such policies may also be useful for revenue-raising purposes.

An Experimental Study of a Wine Batch Distillation in a Copper Pot Still Heated by Gas

Wine batch distillation in a copper pot still heated directly by combustion is unusual. It is a niche sector. Few studies are available on the subject and even fewer have studied it from a thermal point of view. In a context of ecology awareness and regularly increasing gas taxes, finding less energy consuming and more performing solutions has become necessary. Two methods already exist to recover energy for such pot stills, however improvements could be made. The present study focuses on the heating zone of an experimental pot still. First, a thermal diagnosis based on a nodal model is conducted in transient regime. The major sites of energy expenditure and waste are thus identified and quantified. Results highlight significant losses both in combustion smoke and by conduction to the environment resulting from a limited thermal performance of the system. Proposals are then made to enhance it. For instance, the preheating could be optimized and more thermal waste could be recovered.

Implications of Japan’s Spent Nuclear Fuel Taxes

우리나라 국회에서는 조세법률주의에 근거하여 사용후핵연료를 대상으로 하는 지역자원시설세 법안들을 활발히 발의하고 있다. 그러나 이 법안들의 상당수는 일본의 사용후핵연료세 현황만을 참고하고, 그 이면에 존재하는 양국간의 차이점을 간과하고 있다. 이에 본 연구에서는 일본의 사용후핵연료세 신설 절차, 과세 대상 선정, 세율 결정 과정, 과세에 대한 검토 방식 등을 조사하여 우리나라에 대한 시사점을 도출하였다. 조사 결과에 따르면, 일본은 우리나라와 달리 사용후핵연료세를 신설·갱신하는 절차를 법제화하고, 조세평등주의, 목적세 원칙 등과 같은 원칙과 기준을 명확히 설정하고 있다. 그리고 목적세로 부과된 세수의 용처 적합성에 의한 조세 성격 충족, 해당 지방자치단체의 재정수요를 반영한 추가 재원의 필요성 등을 평가하도록 제도화하고 있다. 이처럼 우리나라와 일본은 세법에서도, 세 신설 절차에서도, 세를 신설하는 목적에서도, 핵연료사이클 정책에서도 차이가 존재한다. 우리나라의 사용후핵연료 과세 신설은 국가간 상이한 여건을 파악한 후에 국내 실정에 맞는 방식으로 도입하여 실행하여야 정책 실패의 비용을 최소화할 수 있다.

The Impact of Petroleum Profit Taxes on Economic Growth in Nigeria (1981-2020)

The primary function of a resilient oil and gas tax system is to raise enough revenue to finance essential government expenditure that will raise the standard of living, promote sustainable firms and create jobs of the future for economic growth. This study seeks to determine the impact of petroleum profit taxes on economic growth in Nigeria from 1981 to 2020. An expo-facto research design with two (2) objectives and one (1) baseline theory anchored this empirical paper. The population of the study is Nigeria with a tax history of forty (40) years from 1981 to 2020. The study adopted an interval scale of measurement and the preceding year basis of sampling, with a sample size of nine (9) years from 2010 to 2018. The source of data was secondary, obtained from the Central Bank of Nigeria, National Bureau of Statistics, OECD Statistics, and World Bank Group. The study adopted univariate analysis and bivariate analysis for data analysis with MS Excel 2019 and SPSS Statistics 26. The study found that PPT has no significant relationship on PCI and that PPT has no significant relationship with JOB. The study concluded that: given high levels of oil price stability and production boom, petroleum profit tax might not significantly contribute to per capita income and the employment rate for economic growth, with a correlation of less than 10%. The study recommended that government should reduce the tax incentives granted to petroleum companies in Nigeria, and increase the tax rate of non-petroleum companies, which will increase government revenue from petroleum taxes, during times of oil price volatility and production cuts.

The Impact of Gas Exploration Taxes on Economic Growth in Nigeria (1981-2020)

The primary function of a resilient oil and gas tax system is to raise enough revenue to finance essential government expenditure that will raise the standard of living, promote sustainable firms and create jobs of the future for economic growth. This study seeks to determine the impact of gas exploration taxes on economic growth in Nigeria from 1981 to 2020. An expo-facto research design with two (2) objectives and one (1) baseline theory anchored this empirical paper. The population of the study is Nigeria with a tax history of forty years from 1981 to 2020. The study adopted an interval scale of measurement and the preceding year basis of sampling, with a sample size of nine (9) years from 2010 to 2018. The source of data was secondary, obtained from the Central Bank of Nigeria, National Bureau of Statistics, OECD Statistics, and World Bank Group. The study adopted univariate analysis and bivariate analysis for data analysis with MS Excel 2019 and SPSS Statistics 26. The study found that and that ITG has no significant relationship with PCI but has a significant relationship with JOB. The study concluded that: given high levels of oil price stability and production boom, income tax on gas exploration might significantly contribute to per capita income and employment rate, with a correlation of more than 67%. The study recommended that government should reduce the tax incentives granted to petroleum companies in Nigeria, and increase the tax rate of non-petroleum companies, which will increase government revenue from petroleum taxes, during times of oil price volatility and production cuts.

Planetary good governance after the Paris Agreement: The case for a global greenhouse gas tax

The Paris Agreement and the subsequent IPCC Global Warming of 1.5 °C report signal a need for greater urgency in achieving carbon emissions reductions. In this paper we make a two stage argument for greater use of carbon taxes and for a global approach to this. First, we argue that current modelling tends to lead to a “facts in waiting” approach to technology, which takes insufficient account of uncertainty. Rather than look to the future, carbon taxes that facilitate social redesign are something we have control over now. Second, we argue that the “trade” in “cap and trade” has been ineffective and carbon trading has served mainly as a distraction. Carbon taxes provide a simpler more flexible and pervasive alternative. We conclude with brief discussion of global context.

A game theoretic approach for analyzing electric and gasoline-based vehicles’ competition in a supply chain under government sustainable strategies: A case study of South Korea

This study investigates the issue of electric vehicle (EV) pricing, as well as the issue of determining the extent of electric vehicles' technological improvements on gasoline vehicles (GVs). Furthermore, it looks at four important goals in line with government sustainability plans including the number of EVs, CO2 emissions reduction (ER), revenue seeking (RS), and customer surplus (CS). Two strategies, including a tax optimization strategy (TO-strategy) and a subsidy optimization strategy (SO-strategy), are suggested in this study as ways to reach the four goals by finding optimum values for four decision variables. Two decision variables of the TO-strategy are the determinations of a GV and gasoline taxes. SO-strategy decision variables are the determinations of a manufacturer and consumer subsidies. The cooperation of government in R&D expenditures is considered as a manufacturer subsidy. The EV manufacturer will optimize research and development efforts to improve the level of EV technology and the government will optimize its share of cooperation in expenditure of the manufacturer's R&D programs. The problem under study is solved by a backward induction procedure. The obtained results are challenging and are not straightforward. For instance, if the government seeks to maximize the number of EVs, or wants to minimize pollution, or maximize revenue, it should consider a tax optimization strategy. Under the TO-strategy, if the government has RS or CS goals, the government must increase the GV tax and decrease the fuel tax. Under the SO-strategy, the government must increase its manufacturer subsidy and decrease its customer subsidy.

Sustainable collection center location selection in emerging economy for electronic waste with fuzzy Best-Worst and fuzzy TOPSIS

In emerging economies, electronic waste is an important problem, because it negatively affects the health of staff and people, and causes pollution. Moreover, the location of the collection center has a crucial role in sustainable supply chains. Therefore, in this study, a framework was proposed to identify the location of sustainable collection centers for e-waste. The criteria set includes 3 main criteria, and 23 sub-criteria, and 7 different location options. The main criteria cover economic, social, and environmental criteria, which are organized as the Triple-Bottom-Line dimensions. Alternatives are Manisa, Menemen, Gaziemir, Kemalpaşa, Torbalı, Çiğli, and Akhisar. Fuzzy Best-Worst Method (BWM) and Fuzzy TOPSIS methods are used to calculate the weights of criteria and rankings of the alternatives, respectively. Transportation cost was found as the most important criterion for sustainable collection center selection, followed by collection cost, storage/holding cost, land cost, greenhouse gas emissions, energy cost, tax, and investment cost, respectively. Among other alternatives, Çiğli was found as the best alternative for sustainable collection center, followed by Gaziemir, and Manisa. Managerial implications were presented based on the findings.

Effects of higher required rates of return on the tax take in an oil province

For different reasons the oil companies might apply higher required rates of return than they did some years ago, and this has consequences for investments and tax revenue in oil provinces. By applying various required rates of return as well as various oil prices, this study derives future Norwegian tax revenue during 2018–2050 by using a partial equilibrium model for the global oil market. An important contribution is a detailed modelling of the supply side including the complete petroleum tax system. The model explicitly accounts for reserves, development and production. Both investment in new reserves and production are profit driven. With rising required rates of return fewer of the high cost reserves become profitable to develop and investments decline. Intuitively one would think that lower activity and investments will lead to lower tax income for the government. However, because the government in practice carries a large fraction of the investments because of favourable possibilities for deductions of capital expenses for the oil companies, less investment in a period increases the tax base and the tax income. The initial effect is offset by a subsequent reduction in production which has a negative effect on future taxes. The result is that increasing required rates of return will lead to small variations in net present value of total tax revenue. Further, with lower oil prices, tax take increases significantly when required rates of return rise.

CGE 모형과 사회효용함수를 이용한 최적경유세율 결정 모형의 개발

경유세와 같은 환경개선을 위한 정책수단의 크기는 환경개선의 경제적 한계비용과 사회적 한계가치가 같아지는 수준에서 결정되어야 한다. 이와 같은 의사결정의 기준은 이론적 수준에서는 매우 기본적이지만 실제로 정책에 적용하기 위한 모형을 제시해 주는 연구는 흔치 않다. 본 연구는 환경정책의 최적수준을 결정하기 위한 실제적인 의사결정 도구를 구축하기 위한 연구이다. 정책수단으로서는 경유세를 선택하였고 그 선택의 결과로서의 경제적 가치는 GDP를 그리고 환경질은 경유로 인하여 발생하는 초미세먼지 관련 대기질을 선택하였다. 경유세 시나리오별로 발생하는 경제적 비용을 계산하는 방법으로는 다수의 경유세율 시나리오에 대하여서 반복적인 CGE 연산을 통하여 GDP-대기질 공간상에서 생산가능변경을 작성하였다. 그리고 사회효용함수(사회무차별곡선)는 기존의 CVM이나 편익이전 연구결과를 활용하여 계산(calibration)하는 방식과 변형된 선택실험법을 이용하여 직접 통계적으로 추정하는 두 가지 방식으로 추정하였다. 생산가능경계와 사회무차별곡선이 접하는 점에 해당하는 경유세율을 구하면 그것이 최적경유세율이다. 이렇게 도출된 최적경유세 인상률의 값 중 대표적인 값을 선택하면 2015년 기준으로 35% 정도이며 이는 경유가격으로 환산하면 17% 정도의 인상요인이 된다. 이는 기존 연구에서의 경유세 인상을 통한 경유가격 13.6% 인상안보다 높은 수치이다.

What’s in a name? The incidence of gasoline excise taxes versus gasoline carbon levies

Legislators often attach specific names to individual taxes to help explain their purpose, increase transparency, and ease public backlash over tax increases. It may be politically beneficial, but does the simple act of naming a tax and attaching it to a specific set of benefits have an actual effect in the marketplace? Do consumers respond differently to tax-induced price increases depending on what that tax is? In this article, a natural experiment is used to evaluate tax incidence after the introduction of two gasoline taxes in Alberta - 1) an increase in the generic excise tax and 2) an environmentally-targeted “carbon levy”. While similar on the cost side, the taxes were very different in name and transparency on the benefit side. Results show that benefit-side transparency can matter – responses were lower and incidence higher for the more transparent carbon levy than with the less transparent excise tax.

Does fuel tax decrease carbon dioxide emissions in Turkey? Evidence from an asymmetric nonlinear cointegration test and error correction model.

Excise taxes on fuel consumption may serve an important role in the abatement of CO2 emissions. Fuel tax has been a significant revenue-raising tool in Turkey for years. The present paper investigates whether there is a relationship between carbon dioxide emissions and public revenues from excise taxes on fuel consumption in Turkey by employing an asymmetric nonlinear cointegration test and error correction model that is a novel methodology proposed by Hepsag Commun Stat-Simul Comp 50:400-412, (2021). We collect our sample that consists of annual data on CO2 emissions, GDP, and fuel tax in Turkey from 1985 to 2018. The empirical findings display that there exist relationships among economic growth, CO2 emissions, and fuel tax supporting the environmental Kuznets curve (EKC) hypothesis in the short and long run. However, we find out that fuel tax is statistically insignificant and has no impact on CO2 emissions. Because a significant carbon dioxide reduction is not possible by fuel taxation, by converting the excise tax on fuel consumption into a carbon tax, a considerable emission reduction can be provided efficiently.

Economic Impact of Eliminating the Fuel Tax Exemption in the EU Fishing Fleet

The EU-27 fishing fleet consumed 2.02 billion liters of fuel to catch 4.48 million tons of fish, valued at €6.7 billion in 2018. The profitability of the EU fishing fleet shows an increasing trend, partly due to the improvements in the energy efficiency and recovery of fish stocks in the North-east Atlantic. Fuel is one of the main expenses fishing fleets have, and therefore, their economic performance remains highly dependent on the fuel price, even if they benefit from a fuel tax exemption. The adoption of the European Green Deal, the revision of the Energy Taxation Directive (ETD), the ongoing World Trade Organization (WTO) negotiation to prohibit harmful fisheries subsidies, and general public opinion are putting pressure to eliminate this tax exemption. This analysis investigates the impacts of the potential elimination of the fuel tax exemption across the different EU fishing fleets and it is discussed to what extent the small-scale, large-scale and distant-water fleets could be affected. This analysis is useful to inform policy-makers and stakeholders on the consequences of the potential elimination of the fuel tax exemption, as well as to discuss potential measures to mitigate the socioeconomic impacts arising from this eventual change in the current regulatory framework.