• Energy Research
• 2016-2025close

Border carbon adjustments imply that high-income countries set taxes on energy-intensive imports that are proportional to the carbon content of these imports, to match their own carbon taxes. This paper considers the impacts of such a policy on exporter countries, many of which have no or very low carbon taxes today. The paper first studies a policy whereby the importer allows the exporter’s border tax to be reduced by its own comprehensive carbon tax (“tax rebating”). The analysis finds that the exporter is then incentivized to set its own comprehensive carbon tax at the same rate as the border tax, up to a maximal rate. When the border tax is higher, the exporter instead reduces its carbon tax. Border tax revenues of the high-income country can be returned to incentivize higher carbon taxes in the exporting countries (“carbon crediting”). When tax rebating is not allowed but tax revenues are fully returned, even higher exporter carbon taxes can then be incentivized, possibly exceeding $60 per ton of carbon dioxide in the numerical examples. Border taxation can give rise to export diversion away from border tax-setting countries, which reduces the scope for incentivizing the exporter’s carbon tax. The paper also studies how taxes on oil extraction by oil exporters can be incentivized by oil importing countries, by increasing their oil import prices above world market rates, or more efficiently through support to investments in exporters’ renewable energy capacity.

Government regulations and responsible customers’ behavior are key drivers for businesses to adopt respectful management strategies towards the environment and reduce the overall carbon emissions of their supply chains.Under a strict carbon emissions legislation and the increased awareness of customers about carbon emissions issues, companies are now pushed to improve their environmental performance to achieve better profits. Thus, they need to make optimal decisions within their Supply Chain Management to reduce the carbon emissions that are generated from their various activities.In this context, we identify the issue of the low carbon supply chain management. In this thesis, our objective is first to study this problem and to identify its key drivers. We then aim to review the literature and to study how quantitative models have addressed this problem and its related constraints. We therefore develop new models of low carbon supply design problems under the carbon tax legislation, which is recognized to be one of the relevant applied carbon legislations. In our proposed models, we particularly emphasize on the features of this carbon regulation that have been ignored within the literature. We first study strategic decisions of the company taking into consideration the non-homogeneous carbon tax scheme between countries. We then, study the investment decision of the company under a progressive carbon tax strategy. Through analytical and numerical analyses, we study the impact of such carbon legislations schemes on strategic decisions of the company and its performances. We aim to provide companies with a decision support tool to help them make optimal strategic decisions under this carbon legislation. We also provide recommendations to governments, as to which carbon tax legislations are the most efficient. Finally, we initiate the development of stochastic models to study the strategic investment problem in such an environmental context. We first consider a random customer demand, and then a dynamic and ...

Government regulations and responsible customers’ behavior are key drivers for businesses to adopt respectful management strategies towards the environment and reduce the overall carbon emissions of their supply chains.Under a strict carbon emissions legislation and the increased awareness of customers about carbon emissions issues, companies are now pushed to improve their environmental performance to achieve better profits. Thus, they need to make optimal decisions within their Supply Chain Management to reduce the carbon emissions that are generated from their various activities.In this context, we identify the issue of the low carbon supply chain management. In this thesis, our objective is first to study this problem and to identify its key drivers. We then aim to review the literature and to study how quantitative models have addressed this problem and its related constraints. We therefore develop new models of low carbon supply design problems under the carbon tax legislation, which is recognized to be one of the relevant applied carbon legislations. In our proposed models, we particularly emphasize on the features of this carbon regulation that have been ignored within the literature. We first study strategic decisions of the company taking into consideration the non-homogeneous carbon tax scheme between countries. We then, study the investment decision of the company under a progressive carbon tax strategy. Through analytical and numerical analyses, we study the impact of such carbon legislations schemes on strategic decisions of the company and its performances. We aim to provide companies with a decision support tool to help them make optimal strategic decisions under this carbon legislation. We also provide recommendations to governments, as to which carbon tax legislations are the most efficient. Finally, we initiate the development of stochastic models to study the strategic investment problem in such an environmental context. We first consider a random customer demand, and then a dynamic and uncertain carbon tax regulation. We proceed to the evaluation of our developed stochastic models through numerical examples and comparisons of their results to those of deterministic models that are widely studied within the literature.; Sous la pression externe des gouvernements et des clients conscients des enjeux environnementaux, les entreprises sont plus que jamais obligées de réduire leurs émissions de carbone. Par conséquent, elles sont poussées à trouver les moyens pour optimiser la gestion de leurs chaînes logistiques afin d’améliorer leurs performances environnementale et économique. Dans ce cadre s’intègre la problématique de gestion de chaîne logistique à faible teneur en carbone qui consiste à repenser les décisions de la gestion de la CL en vue de réduire les émissions de carbone. Dans la présente thèse, nous abordons cette problématique. Nous cherchons d’abord à comprendre les différentes caractéristiques de ce problème et à identifier ses facteurs clés. Une telle étude demeure essentielle pour faciliter l’analyse de la littérature existante en termes de modélisation et d’incorporation de paramètres liés aux émissions de carbone dans les modèles mathématiques d’aide à la décision. Nous proposons ensuite de contribuer à la littérature en développant de nouveaux modèles de conception de chaîne logistique sous la législation de la taxe carbone, en proposant une meilleure intégration de cette réglementation. Nous considérons alors dans nos modèles, d’une part, la non homogénéité des taxes carbone entre les pays, puis d’autre part, la progressivité de ce système législatif. A travers la résolution analytique et numérique de nos modèles, nous étudions l’impact de la taxe carbone sur les décisions stratégiques des entreprises et leurs performances. Nous mettons ainsi l’accent sur l’efficacité de cet outil législatif, ainsi que sur les nouvelles directives à mettre en place par les gouvernements pour mieux inciter les entreprises à minimiser leurs impacts indésirables sur l’environnement. Finalement, nous initions la modélisation sous incertitude du problème d’investissement stratégique dans le cadre de la législation de taxe carbone, en considérant d’abord une demande client aléatoire, puis des taxes carbone évolutives et incertaines. Nous proposons une évaluation de nos modèles stochastiques développés en les exploitant sur des exemples numériques et en les comparant aux modèles déterministes largement étudiés dans la littérature.

Boulder, Colorado, a small city located approximately 30 minutes outside of Denver, has historically funded its Climate Action Plan through a tax on electricity (“CAP tax.”) In addition to generating revenue, the CAP tax serves as a carbon pricing mechanism. With the CAP tax expiring in 2023, this report examines what updates the city could make to the tax so it: 1) continues to generate revenue, 2) incorporates other fuels such as natural gas, and 3) better reflects the societal cost of greenhouse gas emissions. We provide recommendations and next steps to the city based on our analysis of the city’s regulatory authority, research on worldwide carbon pricing systems, and quantitative model results. We find that a charge reflecting the full social cost of carbon (~$42 in 2020) could greatly increase revenue beyond historical CAP tax levels, and that incorporating the natural gas sector at a lower rate could provide long-term funding stability for the city.

Carbon taxes are utilized as a tool to address the negative externalities of carbon emissions from production. However, as countries begin to price carbon and create additional policies that address environmental damage, the issue of “carbon leakage” has emerged. Instead of reducing pollution as intended, products produced domestically are instead replaced with more carbon intensive imports (European Commission Taxation and Customs Union, 2021). This essentially reduces the effect of carbon pricing and makes environmental regulations less effective. To combat this, the European Commission announced a proposal on July 14, 2021, to create a carbon border adjustment mechanism (CBAM). This carbon border tax aims to prevent carbon leakage and increase accountability worldwide for environmental degradation by equalizing the price of carbon in the EU (European Union) with that of imports. However, the potential outcome of this policy is a highly controversial topic among economists, policymakers, and environmentalists. Some economists assert that this border tax could disrupt global trade and potentially start trade wars, while others question the proposal’s legality under WTO (World Trade Organization) laws. Those in favor argue that this mechanism would prevent carbon leakage and would lead to additional environmental regulations worldwide. This paper argues that a carbon border tax is likely to succeed in the goal of reducing carbon emissions if regulated and enforced properly. However, some evidence demonstrates consumers and producers could face additional costs in the short term as a period of disruption could occur in the trade sector, while also shifting the carbon price burden onto developing countries. Therefore, the EU should continue with this program but ensure that a gradual transition occurs, giving manufacturers in other countries ample time to address additional costs and reduce emissions, while also ensuring that clean technology is accessible to developing countries. If successful, the EU should also ...

Master of Law in Taxation Law. University of KwaZulu-Natal, Durban 2016.

MEng (Development and Management Engineering), North-West University, Potchefstroom Campus ; The South African Carbon Tax Act came into effect in 2019, and it places a price on the emissions of greenhouse gases (GHG). The second phase of the carbon tax will be implemented in 2023. Presently, there is uncertainty regarding the changes that will be made to tax policy during this review. This is especially problematic since GHG emissions mitigation strategies are dependent on the existing tax policy design. Subsequently, carbon taxpayers, like gold mining companies, cannot plan for future carbon tax-related scenarios. The uncertainty regarding carbon tax policy changes needs to be reduced to assist South African gold mines with future carbon tax planning. This study investigated a variety of scenarios associated with Phase 2 tax policy designs and GHG mitigation strategies. The uncertainty was reduced through the assessment of the impact of tax policy design, and emissions mitigation strategies, on a gold mining company’s future carbon tax exposure. This study developed possible carbon tax policy scenarios and emissions mitigation scenarios. An appropriate baseline scenario was identified for 2021 to 2027. The carbon tax exposure was calculated and forecasted for each scenario for the same period as the baseline. A sensitivity analysis was performed on these scenarios with reference to the baseline scenario. This was done to ascertain the sensitivity of carbon tax exposure to the scenarios themselves. The analysis of the carbon tax policy scenarios resulted in various findings. First, phasing out the basic tax-free allowance for fossil fuel combustion emissions would expose a gold mining company to more carbon tax annually compared to the baseline. However, the extent to which this is true could not be verified. Secondly, selecting a carbon budget based on national emissions reductions requirements, rather than a gold mining company’s mitigation potential, would lead to higher annual carbon tax exposure if said ...

The goal of the paper is to reveal the positive and negative aspects of Carbon Border Adjustment Mechanism for Türkiye and to discuss Turkey’s strategic response. This paper uses a document analysis method to achieve the objectives of the study. The main subject of the research, the Carbon Border Adjustment Mechanism, is excluded from the application results due to being a relatively new practice and gradually coming into effect. Additionally, another limitation of the study is that its scope is limited to Türkiye. The Carbon Border Adjustment Mechanism, which came into effect on October 1, 2023, brings about certain advantages in terms of environmental protection and effectively addressing global warming. However, it also raises some concerns. It is believed that this process could have an impact on national economies and may lead to disadvantages for developing countries like Türkiye, which may not have the resources to sustain stable climate policies in the global market. Turkish businesses exporting to the EU would be required to pay indirectly the carbon tax imposed by the EU if carbon pricing is not implemented in Türkiye. Therefore, it would be in Turkey's favor to accept carbon pricing through domestic regulations. Since the paper focuses on a current debate, so academic studies on this subject are limited. Although there are studies discussing the Carbon Border Adjustment Mechanism, this project differs from others in that it focuses on Türkiye. Additionally, this paper is important in that it focuses on one of the most important problems facing countries. The fact that the step taken by the European Commission to solve this problem will entirely come into force very soon makes it even more important to discuss its positive and negative effects comprehensively.

Economics Department Honors Thesis. ; With Climate Change at the center of many global political and policy debates, a Pigouvian tax on carbon dioxide emissions remains a favorite solution among economists and other policy experts. However, asymmetric implementation of a carbon tax across the globe gives rise to several problems. A country which implements a carbon tax while others do not faces relatively higher energy and manufacturing costs than its taxless peers. As a result, its energy-intensive industries are made less competitive, and there is potential for significant carbon leakage. Border carbon adjustments (BCAs) are one measure designed to protect domestic firms and prevent carbon leakage, but there is not yet consensus on what form they might take. This thesis makes several recommendations for the design of a BCA and provides a prediction of the effect of a carbon tax combined with BCA on US production and carbon emissions. ; Economics ; College of Arts and Science