• Energy Research

2012 Fall. ; Includes illustrations. ; Includes bibliographical references. ; Faced with the failure in coordinating a global policy to limit carbon emissions, one of the key issues in climate policy is carbon leakage, where emissions reductions in regulated regions stimulate emissions in unregulated regions. Many studies discuss border carbon adjustments to mitigate leakage and propose a rate of adjustments based on the carbon price (a Pigouvian rate). But, the question arises, is such a prescription optimal? This thesis analyzes optimal border carbon adjustments, specifically showing that the conventional Pigouvian rates are suboptimal. In Chapter 2, a general-equilibrium simulation model shows that the optimal trade policy is to set a net import tariff less than the Pigouvian rate. In Chapter 3, an analytical model demonstrates that the optimal import tariff consists of both the marginal social damage of the externality and the ability of the home country to influence foreign prices and thus foreign production. Furthermore, the model proves that the optimal rate is less than the Pigouvian rate because of the foreign consumer response. Chapter 4 shows that the findings in the previous chapters hold in an empirical context. Specifically, a general-equilibrium simulation model calibrated to the GTAP 7.1 global dataset demonstrates that the optimal border adjustments are smaller than the Pigouvian rates by 20% to 50% depending on export policy. This thesis contributes to the ongoing discussion of border carbon adjustments by showing the suboptimality of Pigouvian rates in both the theoretical and empirical contexts. Admittedly, using Pigouvian rates to set border adjustments provides a simple rule. The tradeoff between the efficiency improvement that I explore, and the cost increase related to implementing and maintaining the optimal rates (compared to the Pigouvian rates) should be considered.

Over the last few decades, several instruments have evolved to deal with similar energy and environmental challenges. For instance, the economic literature prescribes separate tax or cap-and-trade systems to internalize negative environmental externalities and subsidies to internalize positive externalities such as research and development. However, policy is not straightforward because of the influence on cost and competition and concerns for regional employment, economic activity within certain industries and any distributional effects. Tax discrimination, subsidies and regulations then undermine the efficiency of energy instruments. To balance any environmental concerns, other instruments, including green and white certificates, have been created. While innovative, these work as simple combinations of taxes and subsidies. While the extant literature thoroughly analyzes the partial effects of these instruments, there has been little focus on their basics and the effects of aggregate taxes and subsidies. This complexity calls for research on the efficiency of each instrument, including the administration and transaction costs associated with holding a large set of instruments. We should consider the coordination and simplification of policy tools before complicating the system further by introducing new, primarily equivalent, instruments.

Author(s): Dotson, Greg | Abstract: Many aspects of carbon taxes have been studied in the academic literature. This paper focuses on an area that has received insufficient attention by examining some of the specific institutional challenges a carbon tax proposal would face in Congress. A relatively unknown recent debate in the House of Representatives over a resolution to denounce the concept of carbon taxes provides a window into these challenges, demonstrating the arguments and tactics that can impede solution-oriented action to address climate change. Developing a policy that responds to these arguments is likely to add complexity to a carbon tax proposal, to increase the number of congressional committees involved in consideration of the proposal, and to create additional demand for the revenue that a proposed carbon tax would generate. Moreover, opponents of a policy can exploit these complicating factors and the lengthy time needed in Congress to consider legislation, so they can preemptively attack emerging concepts and proposals. The paper concludes by arguing that enacting a carbon tax at the federal level, with the policy elements that are often contemplated, will require a great deal of agreement or complaisance among lawmakers. Understanding this challenge well in advance of the opportunity for congressional consideration of a carbon tax will best prepare carbon tax advocates for a successful outcome.

MBA thesis - WBS ; In December of 2010, the National Treasury Department of South Africa released a white paper for public comment on reducing greenhouse gas (GHG) emissions by introducing a carbon tax of minimum seventy five Rand per ton of carbon dioxide equivalent (R 75/t CO2e), increasing to about R 200/t CO2e. Such a tax could have a significant impact on South Africa’s Coal Mining Industry. This research focused on understanding what the South African Coal Mining Industry’s reaction would be to the possible implementation of a carbon tax, and aimed to evaluate the potential impacts of such a tax on the industry. Data was collected using a face-to-face data collection method from a purposive sample and analysed and interpreted using content analysis since the main medium for data collection was done via human communication. One of the key findings of this research is that government has not outlined a clear framework for its carbon pricing policy. The South African Coal Mining Industry, together with other mining institutes has put together a task team to assist government develop a clear framework. The majority of the respondents interviewed do not believe that a carbon tax is the right carbon pricing mechanism to address climate change. There were various reasons for this point of view, the most prominent being that government had not done its homework with regards to a carbon tax being the appropriate economic instrument. However, climate change mitigation could provide opportunities for both the government and industry at large. The impacts of a carbon tax are dependent entirely on the policy framework and the design of the carbon pricing mechanism, and could be minimal or significant enough to impact on the economy as a whole. Climate change mitigation measures could prove to be advantageous with many inherent growth opportunities, viz., by being an industry in its own right, beginning from the development of new technologies and following on through to the sales of goods and services. The key message ...

La taxe carbone a été discutée en France depuis de nombreuses années. Un long processus a combiné des rapports publics, des études à partir de modèles économiques et des conférences réunissant experts et parties-prenantes. Il a permis de dégager progressivement un consensus, sur les principes et sur les valeurs à retenir. Les derniers moments précédant la décision ont vu émerger de vives controverses. Les décisions prises finalement peuvent s'inscrire dans le consensus progressivement construit, à condition cependant que la croissance du prix du carbone dans les années à venir permette de respecter les trajectoires d'émission conformes aux engagements internationaux de la France. The carbon tax has been discussed in France since now many years. A long lasting process of public reports, modelling studies and conferences attended by experts and stakeholders allowed to progressively develop a consensus on the principles and level of taxation to be retained. However a vivid controversy developed in the very last moments before the decision was taken. The choices finally made may be consistent with the pre-existing consensus, provided however that the growth in the carbon price in the coming years really impulses the changes in emission trajectories required by France's international commitments.