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The importance of energy-environmental taxation in the transition to decarbonized economies does not correspond to its actual role due to several constraints on its application. This paper emphasizes one of the main barriers, the negative impacts on distribution and equity, and suggests alternatives to mitigate these effects. In particular, it list...
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Context 1
... reform (Simulation 1) would lead to increases of, respectively, 0.048 and 0.142 euro per liter in the excise taxes levied on petrol and diesel, with reductions of 1.1% and 2.9% in petrol and diesel consumption so that the 2018 increase in GHG emissions from transport is reversed. These tax increases would generate an additional annual revenue of 4,239 million euro (Table 3) mainly originated in the coastal regions (65.7%), urban areas (80.9%) and densely populated areas (39.8%) (see Table A5 in the Appendix). ...Context 2
... Reynolds-Smolensky index is negative (-0.0001), indicating that the reform is indeed regressive. In addition, the estimation of Equation (1) provides a decreasing relationship, which points to regressivity for both the initial tax burden on gasoline and diesel, the fnal tax burden and the additional tax burden resulting from the reform (see Table A3 in the Appendix) 41 . In addition, the negative impact of the reform on household income varies across regions (see Tables A6-A8 in the Appendix), being generally lower in the coast, in cities, and in highly populated areas. ...Context 3
... distributional effects of this reform would be similar to those of the preceding simulation (see Table A2 in the Appendix), with an increasing (decreasing) percentage income reduction in the poorest (richest) deciles. In addition, the Reynolds-Smolensky index would have a negative sign (-0.0003), indicating its regressivity, while the estimation of (1) shows that both the fnal tax burden and the additional tax burden from the reform are regressive (Table A3 in the Appendix) for any income level (Table A4 in the Appendix) 43 . Transport Taxes and Decarbonization in Spain: Distributional Impacts and Compensation pensatory packages. ...Context 4
... addition, the reduction in the demand for airline tickets as a result of the reform leads to lower spending and so to income increases, particularly for the richest households (who devote a larger share of their income in this transport mode). In this sense, the Reynolds-Smolensky index is zero and the estimation of Equation (1) shows an increasing relationship between the level of equivalent income and the share of tax payments over total equivalent income, indicating that the reform is slightly progressive (see Table A3 in the Appendix) except for the richest households (see Table A4 in the Appendix) 46 . However, low-income households may be forced to stop using air travel due to tax-related increases in ticket prices 47 , thus justifying the introduction of compensatory packages. ...Context 5
... distributional impacts of Simulation 5 are similar to those of the previous simulation, albeit greater, with the income of all households increasing by a percentage that generally grows with the level of income (see Table A2 in the Appendix). The Reynolds-Smolensky index is also zero in this case, with an increasing relationship between income and the share of tax payments on household income that shows the progressivity of this reform (Table A3 in the Appendix) in all but the richest households (Table A4 in the Appendix). Tables 12, A2 and A4 summarize the results of the compensatory packages associated to the wider aviation tax. ...Similar publications
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Citations
... Por lo tanto, la aplicación de una reforma fiscal verde en un momento en el que existe una creciente desigualdad y revisados sus efectos se muestra como inviable su aplicación. No obstante, el riesgo distributivo que pueda generar la implementación de estos impuestos no los descalifica como herramienta si se tiene la habilidad de prever los efectos y neutralizar o compensar a los afectados (Gago et al., 2021). ...
Introducción: La crisis de sostenibilidad global exige acciones urgentes, especialmente en el ámbito tributario. Este artículo analiza las tendencias en la reforma fiscal verde en España, basándose en recomendaciones de organizaciones internacionales y evaluando sus posibles impactos. Metodología: Se realizó un análisis de las recomendaciones de organizaciones internacionales y de los impactos potenciales de la reforma fiscal verde en el sistema tributario español. Resultados: El estudio concluye que la reforma fiscal verde tiene un gran potencial para promover la sostenibilidad y la justicia fiscal en España. Discusión: Para maximizar los beneficios y minimizar los desafíos de la reforma, es esencial una implementación cuidadosa y considerada, así como la cooperación internacional. Conclusiones: La reforma fiscal verde puede ser una herramienta eficaz para enfrentar la crisis de sostenibilidad global, siempre y cuando se implemente con atención y se fomente la cooperación a nivel internacional.
... communicated to the public(Dorband et al., 2019, Gago et al., 2021.O'Beirne et al. (2020) mention that in the case of the Greenhouse Gas Removal (GGR) in the U.K., procedural justice has received little attention despite its importance. ...
... Therefore, our first objective in this paper is to simulate the environmental, revenue and distributional effects of a CO 2 emissions tax on the main Mexican energy products. Energy taxes have the capacity to generate a relevant volume of public revenue, sometimes at the cost of significant distributional impacts (see Gago et al., 2021). So, our second aim is to explore the introduction of compensatory mechanisms aimed to reduce poverty and inequality using the additional revenue generated by the new tax. ...
The main aim of this paper is to analyze the different impacts of carbon taxation inMexican households at different income levels. First, we estimate a household demandsystem for non-durable goods with special emphasis on energy-related goods. Then, weuse the results to simulate the introduction of a carbon tax. We look at the potential toraise revenue with the aim of implementing different redistributive policies in order toaddress issues of inequality and poverty. Moreover, we evaluate the effects of carbontaxes on demand and emissions reduction.
... Therefore, although energy transition will bring benefits, it will also generate transitional, social and distributional problems. According to some studies (Gago et al., 2020), the distributional effects of energy-environmental taxation will depend on how the generated revenue is employed. Consequently, how the revenue is recycled is critical in a tax reform proposal such as the revision of the ETD. ...
... As they apply, normally, the same tax rate without exemptions or reductions, the energy costs and tax burdens may represent a higher proportion of expenditure in low-income households, which tend to consume more energy-intensive products given their limited possibilities to move to cleaner technologies -e.g. electric vehicles, heat pumps or roof-top installed solar panels (Gago et al., 2020)-. ...
... Therefore, the main negative impact of ETD is associated with effects on household income distribution. Addressing these aspects will be necessary to ensure that the transition and the EU's delivery of its Paris Climate Agreement commitments provide economic opportunities for industry and households alike (Gago et al., 2020). (144) «Carbon pricing encourages the use of clean energy and investment in clean technologies, i.e. renewable electricity and heating. ...
Internet of Things (IoT) is currently a technology in expansion, which is used for multiple purposes. This article explores how Tax Law and Administrations could use it to improve the level of tax compliance and enforcement without overrunning the limits of taxpayers’ rights, through five Sections: Tax Proof; Taxpayers’ Rights; VAT & Customs; Fiscal Incentives; Energy taxation. Since is a very novel disruptive technology, this paper addresses common taxation topics, from a tax policy perspective, that can be related to any national or supranational regulations.
... 63 If distributional considerations matter, and they always do, federal/central collection of revenues would make it simpler to introduce compensatory measures for SNGs that would be relative losers-for low-income groups or for selected businesses. The introduction of carbon taxes may have to be accompanied by other changes in redistribution policies, including direct transfer programs or through changes in direct taxes (Poterba 1991;Callan et al. 2008;Ahmad and Stern 2009;Gago et al. 2020). The potentially uneven distribution of the costs of carbon taxes among SNGs can be an obstacle to their introduction that could be addressed by changes in the current system of intergovernmental transfers (Tang 2011). ...
... The aforementioned simulations are of keen interest for a growing middle-income country with large shares of poverty and high inequality indices, largely unexplored by the literature. Indeed, Gago et al. (2020) emphasize the importance of properly accounting for the distributional impacts of energy taxes and defining alternatives to mitigate such effects. ...
Equity and efficiency are crucial issues behind any tax reform, but they are particularly relevant in countries with high inequality and large shares of poverty. This paper provides a comprehensive socio-economic empirical assessment of Mexico's proposed (and partially implemented) tax reforms in the energy domain, and of a hypothetical partial removal of existing electricity subsidies. Using a rich household income and expenditure survey within the context of a demand system adjustment of non-durable goods, the article provides the public-revenue, environmental and distributional impacts from the simulation of different combinations of energy taxation, subsidy-removal and distributive offsets. The paper also provides detailed ex-ante evidence on the effects of compensatory devices that may contribute to the successful implementation of energy reform packages and significant poverty alleviation in Mexico.
The objective of this investigation was to conduct a systematic analysis of the existing research literature on public acceptance of carbon pricing. The study utilized bibliometric techniques, including citation and co-citation analysis, and dynamic co-citation analysis. The methodology involved a comprehensive review of the literature using the Web of Science database. The findings of the study revealed four crucial thematic areas, namely, overcoming public resistance and promoting public acceptance of carbon pricing, public attitudes and opinions towards carbon pricing, policies and implementation of carbon pricing, and the distributional effects and consequences of carbon pricing. This research employed bibliometric methodology to scrutinize the literature on public acceptance of carbon pricing, pinpointing major contributors, influential articles, and key themes. The study identified thematic areas of focus, exposed research gaps, and suggested potential paths for further investigation. Overall, the study provides a roadmap for upcoming researchers interested in public acceptance of carbon pricing and advocates for the inclusion of articles from additional databases to expand the breadth of the inquiry.
Despite the consensus that green taxation is an effective way to accelerate the decarbonization of economies, few countries are implementing ambitious tax reforms. This is the case of diesel for transport in Spain. The arguments against boosting the diesel tax stressed its potential adverse effects on the economy and society, accusing it of being a regressive policy. In this paper, we shed light on the distributional impact of raising the excise tax on diesel to the same level as on gasoline for final consumers in Spain and various compensation schemes jointly designed with several stakeholders. The results confirm that raising the diesel tax without offsets would have slightly regressive effects and that rural and middle-income households would bear the brunt of the increase. However, the effects become progressive when the co-designed offsetting schemes are implemented. These findings may help decision-makers in achieving a just, acceptable, and politically viable energy transition.
Environmental taxation has been a permanent feature of the policy agenda over the past few decades. It has represented about 2.5 percent of GDP and 6 percent of total taxation in the EU in recent years. In this paper, we study the evolution of total environmental taxation and its two main subcategories, energy and transport taxes, as a percentage of GDP and as a share of total taxation in the EU, through a club convergence analysis of the period 1995–2016. From the GDP perspective, the results show three groups of countries or clubs for the total environmental taxation and only two clubs for the two other categories analysed. Considering the taxation structure perspective, two clusters emerge for the total environmental taxes, three for the energy case and only one for the transport taxation, denoting overall convergence in this case. These results indicate a high grade of convergence in environmental taxation in the EU.