Special Issue "Economics of Environmental Taxes and Green Tax Reforms"

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (31 July 2019).

Special Issue Editors

Prof. Dr. José M. Labeaga
Website
Guest Editor
Económico (Economics), Universidad Nacional de Educación a Distancia (UNED), Madrid, Spain
Interests: panel data methods; evaluation of public policies; energy demand; environmental taxation; sustainable energy consumption
Prof. Xavier Labandeira
Website
Guest Editor
Department of Applied Economics, University of Vigo, Vigo, Spain
Interests: climate change; energy efficiency; tax; energy economics; public economics

Special Issue Information

Dear Colleagues,

Environmental taxes and green tax reforms are increasingly seen as powerful tools to promote a transition to sustainable societies. It is common knowledge that environmental taxes constitute a cost-effective corrective approach and contribute to the development and use of clean technologies. Environmental taxes can actually be applied on a myriad of environmental problems, with climate change mitigation as a clear candidate, and be part of a wider (green) tax reform scheme with distributional and/or revenue objectives.

This Special Issue welcomes, through this call for papers, contributions in the field of economics on the design, implementation and assessment of environmental taxes and green tax reforms. The issue will also incorporate invited papers from leading academic figures in the field.

Please refer to the journal webpage for paper and submission instructions

Prof. Dr. José M. Labeaga
Prof. Xavier Labandeira
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Green tax reform
  • environment
  • distribution
  • clean technology
  • climate change

Published Papers (10 papers)

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Editorial

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Open AccessEditorial
Economics of Environmental Taxes and Green Tax Reforms
Sustainability 2020, 12(1), 350; https://doi.org/10.3390/su12010350 - 01 Jan 2020
Abstract
Environmental taxes and green tax reforms are increasingly seen as powerful tools for promoting a transition to sustainable economies [...] Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)

Research

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Open AccessArticle
Carbon Taxation: A Tale of Three Countries
Sustainability 2019, 11(22), 6280; https://doi.org/10.3390/su11226280 - 08 Nov 2019
Abstract
Carbon pricing is considered by most economists as a central dimension to any climate policy. It is assumed to bring simple, transparent, and cost-effective means to change investment and consumption behaviors. The most straightforward method is carbon taxation, but its implementation is more [...] Read more.
Carbon pricing is considered by most economists as a central dimension to any climate policy. It is assumed to bring simple, transparent, and cost-effective means to change investment and consumption behaviors. The most straightforward method is carbon taxation, but its implementation is more complex. This study provides a comparative analysis of carbon taxation in three countries—Sweden, Canada, and France—aimed at drawing lessons for the future of carbon taxation. Comparing the experience of the three countries reveals that carbon taxes, once in place, do have the intended effect. In this sense, they work well. However, the analysis also reveals very different situations in terms of advances, difficulties, and results, which highlights the need to carefully consider the social and political conditions for the acceptance and effective implementation of such economic instruments. Against this background, the comparative analysis yields four main insights that deserve further research from economics and social scientists: the ability to combine pure economic instruments and other regulation or policies and measures; the management of lobbies and vested interests; the identification of a clear strategy for the recycling of the carbon revenues, whether earmarked or not; and finally, the importance of these three dimensions of carbon taxes in the new settings of zero net emission policies. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Open AccessArticle
New Green Tax Reforms: Ex-Ante Assessments for Spain
Sustainability 2019, 11(20), 5640; https://doi.org/10.3390/su11205640 - 13 Oct 2019
Abstract
The great recession brought an increased need for public revenues and generated distributive concerns across many countries. This has led to a new generation of green tax reforms characterized by the use of markedly heterogeneous proposals that, overall, share a more flexible use [...] Read more.
The great recession brought an increased need for public revenues and generated distributive concerns across many countries. This has led to a new generation of green tax reforms characterized by the use of markedly heterogeneous proposals that, overall, share a more flexible use of tax receipts adapted to the new economic environment. This article explores the possibilities of implementing this new generation of green tax reforms in Spain. It analyzes the impact of such reforms on energy demand, emissions, public revenues and income distribution from taxing various energy-related environmental damages and by considering two alternative uses for the tax receipts: fiscal consolidation and funding the costs of renewable-energy support schemes. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Open AccessArticle
Optimal Environmental Tax Rate in an Open Economy with Labor Migration—An E-DSGE Model Approach
Sustainability 2019, 11(19), 5147; https://doi.org/10.3390/su11195147 - 21 Sep 2019
Cited by 1
Abstract
Recent research has started to apply environmental dynamic stochastic general equilibrium (E-DSGE) models for climate policy analysis. However, all of the studies assume a closed economy setting, where there is no interaction of the economy with an outside economy; this paper fills the [...] Read more.
Recent research has started to apply environmental dynamic stochastic general equilibrium (E-DSGE) models for climate policy analysis. However, all of the studies assume a closed economy setting, where there is no interaction of the economy with an outside economy; this paper fills the gap by constructing a two-city E-DSGE model that features labor migration. With the model, we solve for the optimal environmental tax rate determined by a Ramsey social planner, who maximizes household utility and takes into account the policy’s impact on labor migration. We find the following. (i) The optimal environmental tax rate should be more volatile and procyclical than the rates predicted in the aforementioned literature. (ii) In the closed economy setting, a higher environmental tax rate would always dampen production, while in our setting, it could stimulate output through deterring labor outflow and attracting labor inflow. (iii) We complement the existing literature by emphasizing that the optimal environmental tax rate in a city should respond not only to the shocks that occur internally, but also to those that occur in the opponent city. In particular, we find that it is optimal to reduce the environmental tax rate if a positive total factor productivity (TFP) shock occurs in the neighbor city. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Open AccessArticle
On the Use of Market-Based Instruments to Reduce Air Pollution in Asia
Sustainability 2019, 11(18), 4895; https://doi.org/10.3390/su11184895 - 06 Sep 2019
Abstract
The high rates of economic activity and environmental degradation in Asia demand the implementation of creative and cost-effective environmental policy instruments that provide polluters with more flexibility to find least-cost solutions to pollution reduction. Despite their many theoretical advantages, the use of market-based [...] Read more.
The high rates of economic activity and environmental degradation in Asia demand the implementation of creative and cost-effective environmental policy instruments that provide polluters with more flexibility to find least-cost solutions to pollution reduction. Despite their many theoretical advantages, the use of market-based instruments (MBIs) is a relatively recent phenomenon in Asia, partly due to policymakers being unfamiliar with MBIs and countries lacking the institutional capacity to implement and enforce them. This paper reviews the Asian experience with MBIs intended to reduce air pollution emissions and synthetizes lessons to be drawn and areas for improvement. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Open AccessArticle
A Tax Coming from the IPCC Carbon Prices Cannot Change Consumption: Evidence from an Experiment
Sustainability 2019, 11(18), 4834; https://doi.org/10.3390/su11184834 - 04 Sep 2019
Abstract
This article compares a socially-optimal tax coming from a model integrating consumers’ preferences for various milks, with a tax directly computed from carbon emissions of milks with carbon prices given by the International Panel for Climate Change (IPCC). Regarding consumers’ preferences, we conducted [...] Read more.
This article compares a socially-optimal tax coming from a model integrating consumers’ preferences for various milks, with a tax directly computed from carbon emissions of milks with carbon prices given by the International Panel for Climate Change (IPCC). Regarding consumers’ preferences, we conducted an experiment in France for finding consumers’ willingness-to-pay (WTP) for different bottles coming from either cow’s milk or soy milk, under a regular or an organic process of production. This experiment shows higher WTPs for organic bottles than for regular bottles, and higher WTPs for soy milk than for cow’s milk. These WTPs were introduced into a model estimating the effects of regulatory instruments. From this model using WTPs, it was shown that, for milk coming from cows and soy, a tax on regular bottles and a subsidy on organic bottles maximized the consumers’ welfare. This tax on regular bottles was stronger than the tax that was alternatively estimated with the emissions and IPCC carbon prices. Indeed, a tax based on the IPCC carbon prices seemed too weak for efficiently changing the consumption towards sustainable products. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Open AccessArticle
Exploring Carbon Pricing in Developing Countries: A Macroeconomic Analysis in Ethiopia
Sustainability 2019, 11(16), 4395; https://doi.org/10.3390/su11164395 - 14 Aug 2019
Abstract
This study uses a Computable General Equilibrium model to analyze policy scenarios for a carbon tax on greenhouse gas emissions from petroleum fuels and kerosene in Ethiopia. The carbon tax starts at $5 per ton of carbon dioxide in 2018 and rises to [...] Read more.
This study uses a Computable General Equilibrium model to analyze policy scenarios for a carbon tax on greenhouse gas emissions from petroleum fuels and kerosene in Ethiopia. The carbon tax starts at $5 per ton of carbon dioxide in 2018 and rises to $30 per ton in 2030; these rates are translated into taxes on the different energy types covered, depending on their carbon contents. Different scenarios examine the impacts with revenue recycling through a uniform sales tax reduction, reduction of labor income tax, reduction of business income tax, direct transfer back to households, and use by the government to reduce debt. Because petroleum fuels and kerosene are a relatively small part of the Ethiopian economy, the carbon tax has small impacts on overall economic activity and greenhouse gas emissions. In proportional terms, however, the impact on greenhouse gas emissions from these energy sources is notable, depending on the recycling scenario. The assumed carbon tax trajectory also can raise significant revenue—up to $800 million per year by 2030. The impacts on the poor through increased cost of living are not that large, since the share of the poor in total use of the taxed energy types is small. In terms of induced income effects through employment changes, urban households tend to experience more impacts than rural households, but the results also depend on the household skill level and the revenue recycling scenario. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Open AccessArticle
Tax Policy, Environmental Concern and Level of Emission Reduction
Sustainability 2019, 11(4), 1047; https://doi.org/10.3390/su11041047 - 17 Feb 2019
Cited by 6
Abstract
Regulators often use environmental policy to induce green initiatives by firms. This paper examines the emission-reduction-inducement effect of the environmental tax deduction (ETD) incentive by Stackelberg game models between an environmental regulator and a profit-maximizing monopolistic firm facing emission-dependent demand. Different cases, i.e., [...] Read more.
Regulators often use environmental policy to induce green initiatives by firms. This paper examines the emission-reduction-inducement effect of the environmental tax deduction (ETD) incentive by Stackelberg game models between an environmental regulator and a profit-maximizing monopolistic firm facing emission-dependent demand. Different cases, i.e., with/without considering the regulator’s environmental concerns, were used to investigate the ETD policy effects with a numerical example. This paper shows that the regulator’s tax policy will only affect the emission reduction level, but cannot influence the output, which combined with the firm’s operation factors mainly depends the consumers’ attitude toward green products and price sensitivity. Numerical simulation results showed that for the cases with a moderate level of environmental concern and emission standard, the regulator can set an ETD incentive to motivate the choice of a higher level of emission reduction and simultaneously increase social welfare; otherwise, the increase in environmental quality is at the expense of social welfare. When the market’s environmental consciousness increases, it is easier for the regulator to guide the firm to adopt an ETD solution. Therefore, improving consumers’ awareness of environmental protection is an effective way to promote green investment of firms. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Open AccessArticle
Regional Aspects of a Climate and Energy Tax Reform in Norway—Exploring Double and Multiple Dividends
Sustainability 2018, 10(11), 4175; https://doi.org/10.3390/su10114175 - 13 Nov 2018
Abstract
We investigate the potential for double or even multiple dividends arising from a climate and energy tax reform (CETR), using a regional computable general equilibrium model. Such dividends indicate if government revenues raised from energy-related environmental taxes and recycled back to households or [...] Read more.
We investigate the potential for double or even multiple dividends arising from a climate and energy tax reform (CETR), using a regional computable general equilibrium model. Such dividends indicate if government revenues raised from energy-related environmental taxes and recycled back to households or industries through (regional) social security contributions will yield welfare gains larger than gross cost. Building on existing double dividend theory, we broaden the scope by considering both social and regional aspects of a CETR. We explore the use of household transfers and regional payroll taxes as recycling instruments and investigate to what extent wage formation on the labor market has an effect. For Norway, our results indicate that a CETR may conflict with sub-national policy goals under all assessed scenarios. In particular, this holds for income inequality. Although our analysis concerns the social, economic and environmental aims of a Norwegian policy, the approach can be generalized to, e.g., a European context. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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Review

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Open AccessReview
Market-Based Instruments for Managing Hazardous Chemicals: A Review of the Literature and Future Research Agenda
Sustainability 2019, 11(16), 4344; https://doi.org/10.3390/su11164344 - 11 Aug 2019
Cited by 1
Abstract
We take stock of the lessons learned from using market-based instruments in chemicals management and discuss the potential for increased use of risk-based taxation in the management of pesticides and other hazardous chemicals. Many chemical substances cause significant diffuse emissions when emitted over [...] Read more.
We take stock of the lessons learned from using market-based instruments in chemicals management and discuss the potential for increased use of risk-based taxation in the management of pesticides and other hazardous chemicals. Many chemical substances cause significant diffuse emissions when emitted over wide areas at individually low concentrations. These emissions are typically very difficult and costly to control. The targeted chemical may exist in many products as well as in a wide variety of end uses. However, the current regulatory instruments used are primarily bans or quantitative restrictions, which are applied to individual chemicals and for very specific uses. Policy makers in the area of chemicals management have focused almost solely on chemicals with a very steep marginal damage cost curve, leading to low use of price regulations. The growing concerns about cumulative effects and combination effects from low dose exposure from multiple chemicals can motivate a broader use of market-based instruments in chemicals management. Full article
(This article belongs to the Special Issue Economics of Environmental Taxes and Green Tax Reforms)
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