Pollution Tax Research Articles

Evaluation of using solar energy in Iran's textile industry towards cleaner production: Sustainable planning and feasibility analysis

The use of solar thermal energy is a suitable alternative to fossil fuels, but due to the lack of sufficient information on the implementation of thermal plants, solar industrial process heat (SIPH) was not implemented. The goal of this study is to assess SIPH in the textile industry of Iran. For this purpose, the suitable province for developing SIPH projects is determined from five dimensions using multicriteria decision-making (MCDM) methods. The step-wise weight assessment ratio analysis (SWARA) is used for weighting and the grey measurement alternatives and ranking according to compromise solution (MARCOS-G) is used for prioritizing the provinces. Then, at the optimum site, the performance of a 5 MW power plant with solar parabolic trough collectors along with the storage system is optimized, and dynamic modeling is done. MCDM results showed that Isfahan is the most suitable province for developing SIPH in Iran's textile industry. The feasibility assessment showed that the levelized cost of heat in the optimal condition is equal to 20.9 $/MWh-t. Also, it has led to the reduction of 4 kt of CO2 emissions. Although the price of natural gas is very cheap in Iran, if the pollution tax policies are applied in Iran, SIPH will be cost-effective in the textile industry.

Evaluation and comparison of energy tax, resource tax and air pollution tax: an environmental-DSGE model

How governments choose green fiscal policies to achieve green transition is an urgent issue to be solved. In this context, an environmental-dynamic stochastic general equilibrium model is developed to analyze and compare the macroeconomic effects of fossil energy tax, natural resource tax and air pollution tax. The research shows that the supply-side policy, the natural resource tax, has a stronger impact on the economy than the other two demand-side policies, the fossil energy tax and air pollution tax. More importantly, supply-side policies are more effective than demand-side policies in two aspects: (1) all three policies can make up for the negative impact of tight fiscal policies on the economy, with supply-side policy offsetting the negative impact to a greater extent than demand-side policy; (2) all three policies can act as automatic stabilisers of the economy, with supply-side policy being more effective than demand-side policy in smoothing economic fluctuations.

China’s Outward Foreign Direct Investment and the Environmental Performance of the “Belt and Road Initiative” Countries

Since the launch of the “Belt and Road Initiative” (BRI) in 2013, China’s outward foreign direct investment (OFDI) has grown rapidly. Moreover, the environmental protection issues introduced by these investment behaviors to BRI countries have attracted widespread attention from the international community. With the unbalanced panel data of 66 BRI countries from 2006 to 2020, this paper studied the impacts of China’s OFDI on the environmental performance of BRI countries from a systemic and partial perspective. We found that from a systemic perspective, China’s OFDI is conducive to the improvement of the comprehensive environmental performance of countries along the “Belt and Road”. From a partial perspective, the environmental performance influences of China’s OFDI in countries along the “Belt and Road” are threefold: (1) China’s OFDI can help mitigate climate change; (2) China’s OFDI improves wastewater treatment capacity; and (3) China’s OFDI has no significant impact on air quality. Therefore, China’s OFDI needs to continue its efforts to promote and improve the environmental performance of BRI countries to achieve their sustainable development goals. Some BRI developing countries should gradually change their extensive economic growth models; reduce their share of high energy-consuming, high-pollution, and inefficient industries in the national economy; and expand the proportion of their environmentally friendly industries while refraining from improving environmental performance by imposing high environmental pollution taxes.

Are green cars an optimal and efficient choice for motorists? Evidence from Italy

This study evaluates whether a motorist's choice over green cars (i.e., cars with featuring low CO2 emissions) and non-green cars (i.e., cars featuring high CO2 emissions) is efficient. To this end, we present a micro-founded model of motorist choice incorporating the impact of eco-incentives and taxation on CO2 emissions. Subsequently, we implement data envelopment analysis on a large database of new cars registered in 2019 to evaluate efficiency. The results show that the motorist's optimal choice (green car) does not coincide with the efficient choice. Moreover, motorist choice is mainly guided by the high price of green cars. On average, the efficient choice coincides with cars that end up in the dark area (they do not benefit from eco-incentives and do not pay the pollution tax), being the cheapest, the lightest, the least powerful (low Kw) and petrol fuelled. On average, these elements pertain to Italian motorists with respect to their tastes; most importantly, their budgets do not go well with the high costs of green cars.

Environmental Policy in Vertical Markets with Downstream Pollution: Taxes Versus Standards

Abstract This paper examines the performance of two environmental regulation policies – emission taxes and absolute standards – in a vertical market where an upstream foreign monopolist sells a specific input to two downstream multiproduct firms that generate pollution in the domestic country. Specifically, we use a three-stage game to analyze and compare the two policies for regulating downstream pollution. In the first stage, the domestic government determines an optimal tariff and sets one of the two instruments (taxes or standards) by maximizing social welfare, in stage two, the upstream foreign monopoly sets its input price, and finally, the downstream domestic firms independently make their output and abatement decisions for profit maximization. We find that total emissions are lower under the absolute standard. Nevertheless, the tax dominates the standard in terms of domestic welfare, consumer surplus, and downstream multiproduct firms’ profits. Thus, the tax equilibrium leads to a win-win-win situation compared to the standard equilibrium. These results show the non-equivalence of emission taxes and absolute standards in regulating downstream pollution. The analyses suggest that a pollution tax is an economically and politically feasible policy.

Do Environmental Taxes Affect Carbon Dioxide Emissions in OECD Countries? Evidence from the Dynamic Panel Threshold Model

The latest decades have been marked by rapid climate change and global warming due to the release of greenhouse gas emissions into the atmosphere. Environmental taxes have emerged as a cost-effective way to tackle environmental degradation. However, the effectiveness of environmental taxes in reducing pollution remains a topic of ongoing debate. The purpose of this paper is to examine empirically the effects of various environmental tax categories (energy, pollution, resource and transport) on CO2 emissions in 34 OECD countries between 1995 and 2019. The dynamic panel threshold regression developed by Seo and Shin (2016) is implemented to assess whether the impact of environmental taxes on CO2 emissions depends on a given threshold level. The locally weighted scatterplot smoothing analysis provides evidence for a nonlinear association between environmental taxes and CO2 emissions. The analysis indicates the existence of one significant threshold and two regimes (lower and upper) for all environmental tax categories. The dynamic panel threshold regression reveals that the total environmental tax, energy tax and pollution tax reduce CO2 emissions in the upper regime, i.e., once a given threshold level is reached. The threshold levels are 3.002% of GDP for the total environmental tax, 1.991% for the energy tax and 0.377% for the pollution tax. Furthermore, implementing taxes on resource utilization may be effective but with limited environmental effects. Based on the research results, it is recommended that countries in the OECD implement specific environmental taxes to reduce greenhouse gas emissions.

Environmental Taxation and Green Economics in Southeast Asia

This research aims to simulate models of taxes across Southeast Asia by inserting var models such as environment and gasoline fees. This study is for getting the idea that Southeast Asia imposes an environmental fee based on a regression model derived from Southeast Asia's energy consumption and CO2 emissions adjusted by a 10% additional tax (as a dummy variable). This study was motivated by the European Union's policy suggestions on environmental fees, which could be implemented by Southeast Asia. The log-t methods are used in this study, which allows clustering by countries into additional clubs or convergence groupings, and also for utilizing the test for converging within some panel’s states taking into account the variable’s panel data. We believe that environmental fees are an essential public policy tool in Southeast Asia for reducing CO2 emissions as well as the effects on pollutants. Gas tax or carbon pollution tax upon the energy and transportation industries have a substantial influence on raising tax collections in addition to economic expansion within Southeast Asia. Power tax could help to fund initiatives that utilize ecologically good energy while limiting the prohibiting the utilization of natural gas or eco-friendly power. In the transportation industry, the environmental taxes’ function is to reduce emissions of carbon dioxide caused as a result of less environmentally friendly public transport, as well as to support eco-friendly transport.

Share of polluting input as a sufficient statistic for burden sharing

By investigating the general equilibrium effects with theoretical analysis and computational experiments, we observe that the value share of polluting input is a sufficient statistic for the welfare incidence of a quantity-based policy in a competitive economy for short-term and commonly implemented mitigation policy. This result is robust with respect to the sectoral, regional disaggregation and consumer preference. In contrast, with a given pollution tax, the imputed welfare incidence could vary under economies with different production technologies and consumer preferences. The quantity-based policy instrument leads to a more explicit welfare incidence than the price instrument. On this basis, outcome-based criteria used in pollution reduction burden sharing across regions can simply choose the value share of polluting input as a reference base for allocation.

Low tariff on dirty goods—Environmental negligence or environmental concern?

AbstractShapiro (Quarterly Journal of Economics, 2021) conducts an in‐depth empirical analysis to show that dirtier upstream goods face lower import tariffs than cleaner downstream goods. Inspired by that paper, we examine how the welfare maximizing tariffs on the final goods will differ depending on the dirtiness and the extent of cross border pollution. We show that countries concerned about controlling pollution but maximizing own welfare would be encouraged toward relatively unfettered import of dirtier final goods if pollution is mainly generated through domestic production. We discuss the implications of global welfare maximizing tariff protection, pollution taxes, and multiple tradable products.

Fiscal and monetary effects on environmental quality, growth, and welfare

This paper examines the effect of fiscal and monetary policies on economic growth, inflation, environmental quality, and welfare. To this end, the horizontal-R&D growth model is extended to include pollution generated in the intermediate-goods production, and the demand for money through cash-in-advance (CIA) constraints on intermediate-goods production and R&D investment. Fiscal policy embodied in the taxation of pollution decreases output, profits, inflation, and wages in the intermediate-goods sector, reallocating labor to R&D that is the engine of economic growth. As it reduces pollution, it increases welfare if there are strong preferences for a clean environment. In turn, since the inflation rate is an increasing function of the nominal interest rate, the effects of changes in this monetary policy variable extend to the effects of changes in the inflation rate. An increase in the nominal interest rate penalizes employment, wages and output in the R&D sector relatively more if the respective CIA constraint is more demanding and thus economic growth decreases. As it also reduces pollution since decreases intermediate-goods production, it increases welfare if the preferences for a clean environment are strong enough.

Abatement technology innovation and pollution tax design: A dynamic analysis in monopoly

In this paper, we devise an alternative environmental policy and design a dynamic environmental tax. The two key features of this approach are: (i) environmental tax is levied on a monopoly firm's emissions intensity (emissions per unit of output) rather than on the firm's total pollution emissions; and (ii) the pollution tax rate is a state variable whose dynamic equation is operationalized with an exponential smoothing process of historical emissions intensity. We compare results from when the monopolist chooses how much effort to expend on developing clean production technology to those when it is chosen by an environmental regulator. Our main results show that: 1) whether under the firm's decision or regulator's adjustment, the saddle-point stability of steady-state equilibrium depends on the discount rate, decay rate of pollutants, and adjustment parameter; 2) the monopolist's output level is higher when the regulator chooses the firm's innovation effort than when the firm does so; 3) when a benevolent regulator chooses the firm's clean technology innovation effort, the level of effort and the resulting level of clean technology are both greater than when the firm makes this choice; 4) the pollution tax and pollution stock are higher under the firm's decision than under the regulator's adjustment.

Mapping Climate Change Mitigation Strategies Adopted by Industries: An Overview from First Commitment of Kyoto Protocol (2009–2023)

Abstract This paper analyses the climate change mitigation strategies adopted by industries from the first commitment period of Kyoto Protocol (2008) till present day (2023). A systematic literature review was conducted using the AND operator to customise articles published in Scopus database of 15 years of first commitment period of Kyoto Protocol (2009–2023). Findings show that all the climate change mitigation strategies (CCMS) identified can broadly be classified into managerial and technological. These strategies span from carbon offsets to start-up (ex. renovation in construction industries) to hydrogen as an energy source. VOSviewer network analysis of research paper showed that large number of countries are working closely on CCMS with USA in the forefront. Keywords like climate change, sustainability, greenhouse gas (GHG) were found to be most common in the research articles. This study confirms the significance of adopting managerial and technological strategies in industries for sustainability management. In addition, finance for climate policy and mitigation in terms of cost effectiveness, trade-offs, pollution tax, investments seem to possess a considerable influence on the climate governance.

Design Options for Pollution Tax on Mining of Crypto Assets

Design Options for Pollution Tax on Mining of Crypto Assets

Validity of Environmental Kuznets Curve in the Malaysian Economy: A Fresh Evidence

It is acknowledged that environmental degradation, climate change and the atmosphere's temperature are increasing due to the emission of greenhouse gasses. Therefore, a speedy response is required to lessen the severe effects of greenhouse gases. The present study has analyzed the influence of electric consumption, fiscal development, globalization, and trade openness on carbon emission using the latest dataset and modern econometric techniques. To accomplish the said objectives, the study has employed Johansen cointegration, autoregressive distributed lag model (ARDK), and block exogeneity. The results specify that with the 1% increase in electric consumption, fiscal development, globalization and trade openness, the carbon dioxide emission increases by 0.01%, 0.04%, 0.68%, and 0.25%, respectively. Moreover, the results also indicated that the environmental Kuznets curve is prevailing in the Malaysian economy because an inverted U-shape connection occurs between carbon and GDP2. On the basis of data diagnostics, it is determined that the ARDL model is credible, stable, and reliable. Further, block exogeneity affirms the long-term affiliation among the factors and concludes that all the factors under analysis contribute to the environmental deterioration in the Malaysian economy. Therefore, the government may design an environmental or pollution tax policy to minimize carbon emissions. Green energy should be produced and consumed as it is environmental friendly and helps to reduce temperature and atmospheric pollution.

Developing the optimization control of pollution constrained by the convection diffusion equations

In this paper, an optimization control of pollution subject to the convection diffusion equations is developed and analyzed. The optimization objective function is to consider the pollution effects for minimizing the weighted derivation between simulated concentrations and allowable concentrations at observation sites and the costs of emission reductions, pollution taxes, and the cost related to layout of pipelines. The proposed optimal control problem is defined on the multiple observation and polluting points and is constrained by the convection diffusion equations. We analyze this optimization problem from a rigorous mathematical viewpoint and prove the existence of a solution of the pollution optimal control. We build the numerical optimal control approach by a second-order improved splitting upwind finite volume method to solve the convection diffusion equations and by the constrained difference evolution (DE) algorithm to compute the optimization procedure. Three numerical experiments are investigated, where the first one aims at searching the optimal disposal fluxes while minimizing concentration deviation and reduction cost, the other two are to minimize the whole economical costs that contain waste water treatment cost, pipeline layout cost and pollution taxation by finding the optimal effluent concentration of waste water. The developed optimal control is efficient and it can be applied in applications.

Exploring the impacts of China’s water resource tax policies: A trade-off between economic development and ecological protection

The reform of water resource tax policies is an important measure in the process of China’s green economic transformation. Therefore, improving the accuracy of tax policy impact prediction is crucial for policymakers to make correct decisions. This study focused on the water resource tax policies composed of water resource tax and water pollution tax. A water computable general equilibrium (WCGE) model extended from the traditional computable general equilibrium model was proposed to simulate the impacts of policy changes and determine the optimal tax rate range. Water self-purification capacity and agricultural subsidies were first considered in water computable general equilibrium, providing a simulation–evaluation method that could support the analysis of policy alternatives from a more realistic perspective. The results indicated that water resource tax and water pollution tax synergistically promote water conservation and water pollution reduction, and the negative impact on the economy when they are raised together is lighter than that when the tax burden is raised alone. The water resource tax not only has the best water-saving effect but also has the greatest negative impact on the economy. Technological progress has the best effect in reducing water pollution and is also conducive to reducing the adverse impact of tax increases on the economy. Taxation can also improve social welfare, and the optimal tax rate level is the combination that water resource tax is 4 Yuan/m3, and the water pollution tax is in the range of 5.6–8.4 Yuan/pollution equivalent. The results demonstrate the positive role of government in environmental governance and provide a scientific basis for policymakers to adjust the direction of policy reform, strengthen the collaborative design of water tax policies, and select the optimal tax rate level. Also, solutions of water computable general equilibrium could provide in-depth analysis of the trade-offs between violation risk and system benefits and generate more reliable results by reproducing actual situations. Moreover, the water computable general equilibrium model constructed in this study is also applicable to analyze other types of policies.

Konsep Turunan Green economy dan Penerapannya: Sebuah Analisis Literatur

The purpose of this study is to explain the determinant concept of Green economy and its application. The research was conducted qualitatively with library analysis tools. The data was obtained by browsing bibliographic sources using online search tools on the Mendeley Manager Desktop, which contains the science direct journal platform and other supporting journals. The Green economy is economic development that prioritizes environmental sustainability. A Green economy brings other concepts that become one unit: green jobs, green tourism, green financing, and investment. A Green economy can be implemented with rewards and punishments, such as pollution taxes, subsidies for waste treatment, pressure from associations, etc. Development or shifting of economic activity towards a Green economy is needed not only severe efforts by all groups to run a green-based economy, and campuses need to build curricula and conduct research and development (R and D) in the Green economy so that it becomes common knowledge.

Martin Weitzman: A Gift That Keeps on Giving

Martin Weitzman: A Gift That Keeps on Giving

Policy spillovers, technological lock-in, and efficiency gains from regional pollution taxes in the U.S.

We used the US-TIMES energy-system model in conjunction with integrated assessment models for air pollution (AP3, EASIUR, InMAP) to estimate the consequences of local air pollutant (LAP) and carbon dioxide (CO2) policy on technology-choice, energy-system costs, emissions, and pollution damages in the United States. We report substantial policy spillover: Both LAP and CO2 taxes cause similar levels of decarbonization. Under LAP taxes, decarbonization was a result of an increase in natural gas generation and a near-complete phaseout of coal generation in the electric sector. Under a CO2 tax, the majority of simulated decarbonization was a result of increased electric generation from wind and solar. We also found that the timing of the CO2 and LAP taxes was important. When we simulated a LAP tax beginning in 2015 and waited until 2025 to introduce a CO2 tax, the electric sector was locked into higher levels of natural gas generation and cumulative 2010–2035 energy system CO2 emissions were 8.8 billion tons higher than when the taxes were implemented simultaneously. A scenario taxing CO2 and LAPs simultaneously beginning in 2015 produced the highest net benefits, as opposed to scenarios that target either CO2 or LAPs, or scenarios that delayed either LAP or CO2 taxes until 2025. Lastly, we found that net benefits compared to business as usual are higher under a regional versus a national LAP-tax regime, but that efficiency gains under the regional tax are not substantially higher than those under the national LAP-tax policy.

The real cost of deep peak shaving for renewable energy accommodation in coal-fired power plants: Calculation framework and case study in China

To fulfill the commitment to carbon emission reduction, the grid penetration rate of renewable energy in China has increased rapidly. High penetration of renewable energy brings a significant challenge to the peaking ancillary services providers. In northern China, coal-fired units still play a significant role in peak-shaving, especially in areas where pumped hydropower, gas-fired power, and controllable load are limited. The current peaking ancillary service market in China cannot effectively mobilize the enthusiasm of peaking power plants. Fair calculation of the peak-shaving costs of coal-fired power plants is significant for formulating an ancillary service market mechanism. Current research on peak-shaving costs calculation of coal-fired power fleets is limited to the operating coal consumption costs, wear-and-tear costs, and the additional environmental costs (do not contain pollutant tax and ashes treatment). However, this costs calculation lacks consideration of the additional peaking coal consumption costs, the additional peaking environmental costs with pollution tax and ashes treatment, and the power output loss caused by the peak-shaving process. Therefore, this study proposes a novel calculating framework that includes all the potential peak-shaving costs of the coal-fired generating units mentioned above. To evaluate the proposed framework, a case study was conducted in a coal-fired power plant in Dalian City, Liaoning Province, China, in 2020. The results show that the total costs of peak-shaving in 2020 was only 4.96 million Yuan according to the existing method. However, according to the proposed costs calculation framework, the peak-shaving costs in 2020 should be 16.97 million Yuan. The power grid compensated 12.83 million Yuan to the power plant, and the real peaking net profits was -4.14 million Yuan, which means coal-fired power units are unprofitable under the current peaking compensation mechanism. Compared with the existing traditional costs calculation method, the proposed method could provide a more comprehensive and accurate costs accounting for the deep peak-shaving process of coal-fired units. This study may help formulate the benchmark and reasonable compensation in the peak-shaving ancillary service market.