[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_2579.html
   My bibliography  Save this paper

EU-Type Carbon Emissions Trade and the Distributional Impact of Overlapping Emissions Taxes

Author

Listed:
  • Thomas Eichner
  • Rüdiger Pethig
Abstract
The European Union fulfills its emissions reductions commitments by means of an emissions trading scheme covering some part of each member state’s economy and by national emissions control in the rest of their economies. The member states also levy energy/emissions taxes overlapping with the trading scheme. Restricting our focus on cost-effective policies, this paper investigates the distributive consequences of increasing the overlapping emissions tax that is uniform across countries. For quasi-linear utility functions and for a class of parametric utility and production functions emissions tax increases turn out to be exactly offset by permit price reductions. As a consequence permit-exporting [permit-importing] countries lose [gain] from an increase in the emissions tax. These results are not general, however. By means of a numerical example we show that export-import reversals and welfare reversals are possible.

Suggested Citation

  • Thomas Eichner & Rüdiger Pethig, 2009. "EU-Type Carbon Emissions Trade and the Distributional Impact of Overlapping Emissions Taxes," CESifo Working Paper Series 2579, CESifo.
    • Handle: RePEc:ces:ceswps:_2579
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp2579.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Steven Sorrell, 2003. "Carbon Trading in the Policy Mix," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(3), pages 420-437.
    2. Shiell, Leslie, 2003. "Equity and efficiency in international markets for pollution permits," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 38-51, July.
    3. Eichner, Thomas & Pethig, Rüdiger, 2009. "Efficient CO2 emissions control with emissions taxes and international emissions trading," European Economic Review, Elsevier, vol. 53(6), pages 625-635, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Currier, Kevin M. & Rassouli-Currier, Susanne, 2018. "Producer incentives in electricity markets with green quotas and tradable certificates," Utilities Policy, Elsevier, vol. 55(C), pages 59-68.
    2. Robaina Alves, Margarita & Rodríguez, Miguel & Roseta-Palma, Catarina, 2011. "Sectoral and regional impacts of the European carbon market in Portugal," Energy Policy, Elsevier, vol. 39(5), pages 2528-2541, May.
    3. Currier, Kevin M., 2016. "Incentives for cost reduction and cost padding in electricity markets with overlapping “green” regulations," Utilities Policy, Elsevier, vol. 38(C), pages 72-75.
    4. Fei Zou & Yanju Zhou & Caihua Yuan, 2020. "The Impact of Retailers’ Low-Carbon Investment on the Supply Chain under Carbon Tax and Carbon Trading Policies," Sustainability, MDPI, vol. 12(9), pages 1-27, April.
    5. Yoshihiro Hamaguchi, 2024. "Whether to Abolish or Introduce Dual Regulation as Trade and Environmental Policy?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 32(1), pages 57-95, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas Eichner & Rüdiger Pethig, 2009. "Taxing and trading carbon emissions in the EU: Distributional comparisons of mixed policies," Volkswirtschaftliche Diskussionsbeiträge 135-09, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    2. Costantini, Valeria & D'Amato, Alessio & Martini, Chiara & Tommasino, Maria Cristina & Valentini, Edilio & Zoli, Mariangela, 2013. "Taxing international emissions trading," Energy Economics, Elsevier, vol. 40(C), pages 609-621.
    3. Chitnis, Mona & Sorrell, Steve & Druckman, Angela & Firth, Steven K. & Jackson, Tim, 2014. "Who rebounds most? Estimating direct and indirect rebound effects for different UK socioeconomic groups," Ecological Economics, Elsevier, vol. 106(C), pages 12-32.
    4. Lehmann, Paul, 2010. "Combining emissions trading and emissions taxes in a multi-objective world," UFZ Discussion Papers 4/2010, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    5. Balint, T. & Lamperti, F. & Mandel, A. & Napoletano, M. & Roventini, A. & Sapio, A., 2017. "Complexity and the Economics of Climate Change: A Survey and a Look Forward," Ecological Economics, Elsevier, vol. 138(C), pages 252-265.
    6. V. Oikonomou & C. Jepma, 2008. "A framework on interactions of climate and energy policy instruments," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(2), pages 131-156, February.
    7. Charnovitz, Steve & Fischer, Carolyn, 2015. "Canada–Renewable Energy: Implications for WTO Law on Green and Not-So-Green Subsidies," World Trade Review, Cambridge University Press, vol. 14(2), pages 177-210, April.
    8. Bonilla, Jorge & Coria, Jessica & Sterner, Thomas, 2012. "Synergies and Trade-offs between Climate and Local Air Pollution: Policies in Sweden," Working Papers in Economics 529, University of Gothenburg, Department of Economics.
    9. Adrian Amelung, 2016. "Das "Paris-Agreement": Durchbruch der Top-Down-Klimaschutzverhandlungen im Kreise der Vereinten Nationen," Otto-Wolff-Institut Discussion Paper Series 03/2016, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
    10. Pan, Xunzhang & Teng, Fei & Wang, Gehua, 2014. "A comparison of carbon allocation schemes: On the equity-efficiency tradeoff," Energy, Elsevier, vol. 74(C), pages 222-229.
    11. Antoine D'Autume & Katheline Schubert & Cees Withagen, 2016. "Should the Carbon Price Be the Same in All Countries?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(5), pages 709-725, October.
    12. Fabio Antoniou & Efthymia Kyriakopoulou, 2019. "On the Strategic Effect of International Permits Trading on Local Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1299-1329, November.
    13. Mulder, Machiel & Zeng, Yuyu, 2018. "Exploring interaction effects of climate policies: A model analysis of the power market," Resource and Energy Economics, Elsevier, vol. 54(C), pages 165-185.
    14. Valentine, Scott Victor, 2010. "Canada's constitutional separation of (wind) power," Energy Policy, Elsevier, vol. 38(4), pages 1918-1930, April.
    15. repec:spo:wpmain:info:hdl:2441/1nlv566svi86iqtetenms15tc4 is not listed on IDEAS
    16. Liu, Yang & Zhang, Yuchen & Zhao, Xiaoli & Farnoosh, Arash & Ma, Ruoran, 2024. "Synergistic effect of environmental governance instruments embedded in social contexts: A case study of China," Ecological Economics, Elsevier, vol. 220(C).
    17. Timo Goeschl & Grischa Perino, 2017. "The Climate Policy Hold‐Up: Green Technologies, Intellectual Property Rights, and the Abatement Incentives of International Agreements," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 709-732, July.
    18. Kalkuhl, Matthias & Edenhofer, Ottmar & Lessmann, Kai, 2013. "Renewable energy subsidies: Second-best policy or fatal aberration for mitigation?," Resource and Energy Economics, Elsevier, vol. 35(3), pages 217-234.
    19. Dobes Leo & Jotzo Frank & Stern David I., 2014. "The Economics of Global Climate Change: A Historical Literature Review," Review of Economics, De Gruyter, vol. 65(3), pages 281-320, December.
    20. Fan, Jin & Wang, Shanyong & Wu, Yanrui & Li, Jun & Zhao, Dingtao, 2015. "Buffer effect and price effect of a personal carbon trading scheme," Energy, Elsevier, vol. 82(C), pages 601-610.
    21. Thomas Eichner & Rüdiger Pethig, 2007. "Efficient CO2 Emissions Control with National Emissions Taxes and International Emissions Trading," CESifo Working Paper Series 1967, CESifo.

    More about this item

    Keywords

    emissions taxes; emissions trading; international trade;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_2579. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.