Carbon-Energy Taxation

Lessons from Europe

Edited by Mikael Skou Andersen and Paul Ekins

Highly topical and political subject that is evidence and data-based
Pan-European with analysis of many countries from Slovenia and Finland to the UK
Includes a full introduction to carbon and energy taxation and its implications
Major contribution to the debate on carbon-taxation

Carbon-Energy Taxation

Lessons from Europe

Edited by Mikael Skou Andersen and Paul Ekins

Description

When taxes are introduced on carbon and energy, and the revenue is used to reduce other taxes, will a positive effect be achieved both for the environment and for the economy? In 1990 Finland was the first country to introduce a tax on CO2. Later, Sweden, Denmark, Netherlands, Slovenia, Germany and the UK followed suit with tax reforms that shifted taxation from labour to carbon and energy. Over the years, CO[{2} and energy taxes have gradually been raised, so that in Europe taxes of more than 25 billion Euros a year have been shifted.

This book examines carbon-energy taxation in detail and looks at tax shifting programmes for lowering other taxes. It offers extensive analysis on the basis of historical data and seeks to answer important questions for policy-making, such as: What was the impact of tax shifting for economic performance and competitiveness? By how much were emissions of CO[{2} reduced? Could energy-intensive industries cut further down on their fuel demand or did they loose market shares? To what extent was there "leakage" from Europe, so that production and CO[{2} emissions were shifted to other countries or regions without CO[{2} -abatement policy? The use of unique and original data, including sector-specific energy prices and taxes, as well as the use of advanced statistical techniques, such as co-integration analysis and panel-regression techniques along with the time-series estimated macro-economic model E3ME, make this a truly comprehensive volume.

On the basis of the lessons learned in Europe, this volume indicates how carbon-energy taxation could usefully be combined with emissions trading, and discusses implications for future international climate policy, including how the IPCC recommendations for a gradual escalation in carbon price could be accomplished while preventing carbon leakage.

Carbon-Energy Taxation

Lessons from Europe

Edited by Mikael Skou Andersen and Paul Ekins

Preface
Pricing of Carbon in Europe
1. Carbon-energy taxation, revenue recycling and competitiveness, Mikael Skou Andersen
2. Design of Environmental Tax Reforms in Europe, Stefan Speck and Jirina Jilkova
Industry Sector Competitiveness
3. Assessing Vulnerability of Selected Sectors under Environmental Tax Reform: the issue of pricing power, John Fitz Gerald, Mary Keeney and Sue Scott
4. Trends in the competitiveness of selected industrial sectors in ETR countries, Roger Salmons and Alexandra Miltner
5. The impact of energy taxes on competitiveness: a panel regression study of 56 European industry sectors, Martin Enevoldsen, Anders Ryelund and Mikael Skou Andersen
6. Energy-intensive industries: Approaches to mitigation and compensation, Mikael Skou Andersen and Stefan Speck
Country Competitiveness and Carbon Leakage
7. The Effects of Environmental Tax Reform on International Competitiveness in the European Union: modelling with E3ME, Terry Barker, Sudhir Junankar, Hector Pollitt and Philip Summerton
8. Carbon leakage from unilateral environmental tax reforms in Europe, 1995-2005, Terry Barker, Sudhir Junankar, Hector Pollitt and Philip Summerton
Implications for Future Climate Policy
9. Carbon Taxes and Emissions Trading: Issues and Interactions, Paul Ekins
10. Conclusions - Europe's lessons from carbon-energy taxation, Mikael Skou Andersen and Paul Ekins
Annex- tables A.1 to A.23

Carbon-Energy Taxation

Lessons from Europe

Edited by Mikael Skou Andersen and Paul Ekins

Author Information

Mikael Skou Andersen is Professor in Policy Analysis at Denmark's National Environmental Research Institute (NERI), Aarhus University. His PhD and Master's degrees were obtained from the Faculty of Social Sciences at Aarhus University, where he was previously also a tenured Associate Professor in the Department of Political Science and Head of the Policy Analysis section. He also holds a degree in Environmental Studies from the Faculty of Natural Sciences. He was a member of the Danish Minister of Taxation's Working Group on CO2 and since 2005 has been a member of the European Commission's High-level Network of Environmental Economists. He was a co-founder of the Centre for Social Science Research on the Environment (CESAM) 1992-2001, and has been scientific coordinator for several EU research projects, including COMETR. Paul Ekins has a PhD in economics from Birkbeck College, and a BSc in electrical engineering from Imperial College. He joined King's College London as Professor of Energy and Environment Policy in January 2008, having been Head of the Environment Group at the Policy Studies Institute and Professor of Sustainable Development at the University of Westminster since 2002. He was a Member of the Royal Commission on Environmental Pollution from 2002-2008 and, from 2003-2007, was on the UK Government's Sustainable Energy Policy Advisory Board. He is a Co-Director of the UK Energy Research Centre, in charge of its Energy Systems and Modelling theme, and leads King's College's involvement in large research consortia on Bioenergy and Hydrogen. He is also Chairman of the National Industrial Symbiosis Programme (NISP), the UK's most effective initiative at promoting resource efficiency in industry.

Contributors:

Mikael Skou Andersen, Aarhus University
Paul Ekins, King's College London
Jirina Jilkova, University of Economics Prague
John Fitz Gerald, Economic and Social Research Institute, Dublin
Mary Keeney, Central Bank and Financial Services Authority of Ireland
Sue Scott, Environment Policy Research Centre, ESRI
Roger Salmons, Policy Studies Institute
Alexandra Miltner, Policy Studies Institute
Martin Enevoldsen, Deloitte Business Consulting, Copenhagen.
Anders Ryelund, Health Planning Department, Midtjylland, Denmark.
Stefan Speck, Kommunalkredit, Austria
Terry Barker, University of Cambridge
Sudhir Junankar, Cambridge Econometrics
Hector Pollitt, Cambridge Econometrics
Philip Summerton, Cambridge Econometrics