The Role of Carbon Taxes in Adjusting to Global Warming

Pearce, David

doi:10.2307/2233865

Cited by 705 publications

(332 citation statements)

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“…While there is much evidence supporting the Irish government's view that implementing a carbon tax is a cost-effective method of achieving a significant cut in CO 2 emissions (see, for example, Pearce, 1991, or McIlven and Helm, 2010), the evidence from countries which have already imposed this tax is mixed (Lin and Li, 2011). In light of this proposed budgetary measure we aim to assess the costs and benefits of a carbon tax in Ireland.…”

Section: Introductionmentioning

confidence: 99%

Carbon tax scenarios and their effects on the Irish energy sector

Cosmo

Hyland

2013

Energy Policy

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In this paper we use annual time series data from 1960 to 2008 to estimate the long run price and income elasticities underlying energy demand in Ireland. The Irish economy is divided into five sectors: residential, industrial, commercial, agricultural and transport, and separate energy demand equations are estimated for all sectors. Energy demand is broken down by fuel type, and price and income elasticitieis are estimated for the primary fuels in the Irish fuel mix. Using the estimated price and income elasticities we forecast Irish sectoral energy demand out to 2025. The share of electricity in the Irish fuel mix is predicted to grow over time, as the share of carbon intensive fuels such as coal, oil and peat, falls. The share of electricity in total energy demand grows most in the industrial and commercial sectors, while oil remains an important fuel in the residential and transport sectors.Having estimated the baseline forecasts, two different carbon tax scenarios are imposed and the impact of these scenarios on energy demand, carbon dioxide emissions, and government revenue is assessed. If it is assumed that the level of the carbon tax will track the futures price of carbon under the EU-ETS, the carbon tax will rise from e21.50 per tonne CO2 in 2012 (the first year forecasted) to e41 in 2025. Results show that under this scenario total emissions would be reduced by approximately 861,000 tonnes of CO2 in 2025 relative to a zero carbon tax scenario, and that such a tax would generate e1.1 billion in revenue in the same year. We also examine a high tax scenario under which emissions reductions and revenue generated will be greater.Finally, in order to assess the macroeconomic effects of a carbon tax, the carbon tax scenarios were run in HERMES, the ESRI's medium-term macroeconomic model. The results from HERMES show that, a carbon tax of e41 per tonne CO2 would lead to a 0.21 per cent contraction in GDP, and a 0.08 per cent reduction in employment. A higher carbon tax would lead to greater contractions in output.J.E.L. Classification Numbers: Q4,Q52,Q54.Keywords: Environmental tax, Energy demand, CO2 emissions, income distribution. * ESRI and Trinity College Dublin. e-mail: valeria.dicosmo@esri.ie. We thank John FitzGerald, Adele Bergin, Richard Tol, Sean Lyons, Ide Kearney, participants at conferences in UCD and the ESRI seminars for helpful comments and suggestions. Remaining errors and expressed views are our own.

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Section: Introductionmentioning

confidence: 99%

Carbon tax scenarios and their effects on the Irish energy sector

Cosmo

Hyland

2013

Energy Policy

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“…The 1994 Oslo Symposium on sustainable consumption has established that the principles of democracy and the reality of control limitations demand that changes in consumption patterns be achieved not by force (e.g., bans) but rather through responsible consumer choices (Scammon and Mayer 1993) facilitated by the provision of independent information on markets. Because they allow for freedom of choice and avoid distorting market prices (Pearce 1991), labelling practices tend to be a preferred option to attain various objectives; for example, nutrition labels serve public health objectives (Mannell et al 2006), and environmental labels aim to achieve ecological goals (see Koos 2011). In the food sector, official organic labels attempt to promote the development of organic farming and more sustainable consumption (Thøgersen 2000).…”

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Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects

2011

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International audienceAn organic label offers a market signal for producers of organic food products. In Western economies, the label has gained high recognition, but organic food still represents a small part of total food consumption, which raises questions about the label's efficacy. By considering organic labels as a signal of quality for consumers, this article studies how this signal interacts with brand signals when both are visible to consumers, applying a cobranding framework. This research examines the moderating effect of the brand on organic label effects. In a 2 × 2 experimental design using real consumers (N = 122) in a shopping context, it found that, depending on brand equity, the marginal effect of organic labelling information in terms of perceived product quality varies. In particular, when brand equity is high (low), the organic label appears less (more) effective. However, regardless of the brand equity level, an organic label makes the environmentally friendly attribute salient, which has a positive impact on perceived quality. Pertinent implications for marketing and public policy are discussed

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“…4 Early papers in the double dividend literature argued that because of that gain from recycling revenue, environmental taxes would still be worthwhile even if the pollutant being taxed turned out to be harmless: that the efficiency gain from revenue-recycling would more than cover the efficiency cost of the tax. That was a particularly attractive argument in the case of a carbon tax, because at the time the early double-dividend papers were written, there was still significant scientific uncertainty about the relationship between anthropogenic carbon emissions and climate change (and it remains a potentially attractive political argument even today, given 2 See, for example, Tullock (1967), Pearce (1991), Repetto (1992), and Oates (1995). 3 The terms "revenue-recycling effect" and "tax-interaction effect" are due to Goulder (1995).…”

Section: Environmental Taxes As Part Of the Broader Tax Systemmentioning

confidence: 99%

Environmental Taxation

Williams¹

2016

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This paper examines potential environmental tax policy reforms. It focuses primarily on a carbon tax, but also more briefly considers a range of other possible changes. These include revising or eliminating various energy and environmental tax credits and deductions (many of which might become unnecessary in the presence of a carbon tax), as well as changes to energy taxes that have substantial environmental implications (such as the federal gasoline tax). The paper draws on recent theoretical and empirical research to evaluate the effects of such reforms on tax revenue, pollution emissions, economic efficiency, and income distribution.

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The Role of Carbon Taxes in Adjusting to Global Warming

Cited by 705 publications

References 0 publications

Carbon tax scenarios and their effects on the Irish energy sector

Carbon tax scenarios and their effects on the Irish energy sector

Why Might Organic Labels Fail to Influence Consumer Choices? Marginal Labelling and Brand Equity Effects

Environmental Taxation

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