Designing Fiscal Policy to Address the External Costs of Energy

Parry, Ian

doi:10.1561/101.00000065

Cited by 27 publications

(6 citation statements)

References 60 publications

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“…States often use the methods of tax-like incentives and state financing, for example, investment or production tax credits, value-added tax (VAT), energy tax, CO 2 tax and other tax reductions, energy production payments, state investments, loans, capital support, and other schemes. Of the above-mentioned ways, according to Kalkuhl and his colleagues [14] and Parry [15] the direct methods are the most effective for reducing CO 2 emissions.…”

Section: Regionmentioning

confidence: 99%

Communicating Renewable Energy in the National Action Plans of the Member States of the European Union

et al. 2020

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For implementing renewable energy policies it is necessary to convince the population of the appropriateness and usefulness of the ideas. The information provision needed for that requires the communication to be accessible and understandable to the target audience. This research examined the national renewable energy action plans of the member states of the European Union. The online accessibility of these documents and their readability were examined using a simple accessibility test and the Flesch and Flesch–Kincaid readability tests. The paper also addresses the relationship between the culturally-determined power distance indices and the economic and developmental characteristics of the countries and the readability values of their samples. The results showed that the examined documents could be easily accessed, but the action plans of all the member states were difficult to read. The emerging pattern suggested that the text samples of the countries with higher power distances were harder to interpret. Nevertheless, no significant relationship was detected by the correlation analyses between the power distance indices and the Flesch and Flesch–Kincaid readability scores, while strong relationships were detected between the Human Development Index (HDI) data and the results of both readability tests in the group of countries with the highest power distance values.

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Section: Regionmentioning

confidence: 99%

Communicating Renewable Energy in the National Action Plans of the Member States of the European Union

et al. 2020

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“…The latest policy was released through Government Regulation Number 18 Year 2015 on Income Tax Facility for Investment on Specific Business Sectors and/or Specific Regions. The electrical equipment industry, waste management, and the procurement of electricity, gas, and geothermal energy can receive income tax reductions of up to 30% of the amount invested, allowed for six years at 5% per year with accelerated amortisation.…”

Section: Government Revenues and Grant Policiesmentioning

confidence: 99%

“…A wide range of fiscal policies can be used to encourage economic activity, address the external costs of energy [18], and assist countries' energy transition toward a greener economy [19]. For example, government guarantees and financing facilities are considered in reducing risks, such as risk of failure in the exploration of geothermal energy.…”

Section: Introductionmentioning

confidence: 99%

The Political Economy of Indonesia’s Renewable Energy Sector and Its Fiscal Policy Gap

Halimanjaya¹

2019

IJEFM

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This research paper identifies fiscal policy gaps that occur in Indonesia's renewable energy (RE) sector and analyses its political economy. Primary data from 37 stakeholders and secondary data from fiscal policies from Indonesia's 2007-2017 taken from Ministry of Finance (MOF) and Ministry of Energy and Mineral Resources (MEMR) regulation databases. The fiscal policy data were analysed using a cluster approach and meta-synthesis method. The results show that Indonesia has experienced multi-faceted principal-agent problems between PT PLN, the agent with sole authority to manage electricity transmissions, and various principals, namely the Ministry of State Owned Enterprises (MSOE), the MEMR, the Ministry of Industry (MOI) as the intermediary between domestic and foreign RE industries, and the MOF. While changing the MEMR's feed-in-tariff (FiT) policies sends an uncertain policy signal, the MOF's fiscal incentive policies other than FiT to promote RE development in Indonesia remain sub-optimal; the fiscal policies required to incentivise a large volume of smalland medium-scale investment in RE are absent. Differentiated tax rates and tax-break periods for national and foreign companies on the micro, small and medium scales could significantly accelerate the development of RE by both domestic and foreign companies, supporting Indonesia in achieving its sustainable development goals and emission reduction targets under its nationally determined contribution.

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“…It shares with this literature the ability to consider the tax system in great detail. This is important, given the evidence that both the costs and the effectiveness of climate policies are influenced by existing tax distortions [see, for example, Goulder (1995), Goulder et al (1999), Goulder et al (2008), Marron and Toder (2014), and Parry (2014)]. On the other hand, it incorporates many of the insights of the endogenous growth literature.…”

Section: Introductionmentioning

confidence: 99%

Achieving the triple dividend in Portugal: a dynamic general-equilibrium evaluation of a carbon tax indexed to emissions trading

Pereira

2017

Journal of Economic Policy Reform

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Using an applied dynamic general-equilibrium model, we simulate the environmental, economic, and budgetary effects in Portugal of a new carbon tax indexed to the carbon price in the EU-ETS market. Through careful recycling of the carbon-tax revenues to finance lower personal income taxes, lower Social Security contributions, and higher investment tax credits-in particular when these changes are directed at promoting energy efficiency-we show that a carbon tax reform can yield three dividends of a long-lasting nature: a reduction in emissions, better economic performance, and a stronger budgetary position. Thus, we show that it is possible to design a politically-feasible carbon tax reform that not only boosts economic growth and strengthens fiscal consolidation, but also accommodates the legitimate needs of different stakeholders: interest groups that target environmental goals, households focused distributional issues, and businesses concerned with international competitiveness. These views were fully incorporated in a draft bill presented to the Portuguese Government in September 2014 by the Commission for Environmental Tax Reform [CRFV (2014)]. Based on these recommendations, a new indexed carbon tax was then approved by Parliament, and enacted on January 1 st , 2015.

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Designing Fiscal Policy to Address the External Costs of Energy

Cited by 27 publications

References 60 publications

Communicating Renewable Energy in the National Action Plans of the Member States of the European Union

Communicating Renewable Energy in the National Action Plans of the Member States of the European Union

The Political Economy of Indonesia’s Renewable Energy Sector and Its Fiscal Policy Gap

Achieving the triple dividend in Portugal: a dynamic general-equilibrium evaluation of a carbon tax indexed to emissions trading

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