Climate Change Mitigation and Poverty Reduction: Trade-offs or Win-win Situation?

En 2014 México implemento un impuesto al carbón, el cual no ha alcanzado la recaudación esperada, no ha reducido emisiones y ha tenido un efecto regresivo. Adicionalmente, no hay coordinación entre metas climáticas y otros Objetivos de Desarrollo Sostenible (ODS). Para explorar esto, desarrollamos un análisis de equilibrio general computable, que simula una política de impuestos coordinada que pueda alcanzar los ODS de pobreza, mortalidad y educación. Los resultados sugieren que la tasa de impuesto al carbón coordinada para alcanzar estos ODS en el 2030 debe ser alrededor del 15%, que es más alta que la implementada por el gobierno y podría causar efectos distorsionantes. Abstract: Since 2014, Mexico has implemented a carbon tax policy, which has not reached the expected revenue, failed at decreasing emissions, and had a regressive effect. Moreover, there has not been coordination between climate and other SustainableDevelopmentGoals (SDGs). To explore this, we performa ComputableGeneral Equilibriumanalysis to simulate a coordinated carbon tax policy aimed at reaching the SDGs goals related to poverty, mortality, and education. The results suggest that the required carbon tax rate for approaching SDGs targets by 2030 should be around 15%, which is higher than the actual rate and may cause other distortionary effects

Donwload here https://authors.elsevier.com/a/1cU1C_6se4HCYX The price elasticities demand of electricity, gas, oil fuel, gasoline and steam coal are estimated using household surveys from 1992 to 2014. The analysis uses alternative econometric techniques – OLS, SURE, and Quadratic Almost Ideal Demand System (QUAIDS) – the last of which is based on the methodology of Banks, Blundell and Lewbel considering socioeconomic characteristics of the households to account for the difference in demand of energy related goods. It is found that the demands for fuels are price inelastic, and the differences in elasticities between poor and non-poor households are small but statically significant. The income elasticity of demand is generally found to be positive and higher in absolute value than price elasticity, and the differences are greater between poor and non-poor. Consequently, there would be a differentiated reaction of consumers to changes in energy prices according to their poverty status. Steam coal and firewood, each of which could be considered inferior goods, stand as counterexamples in that the income elasticity is found to be negative. The contribution of this study helps policy makers to analyze household welfare when applying changes in energy prices in the face of fiscal and/or energy reforms, such as those Mexico is implementing.

Open access pdf here: https://www.cambridge.org/core/services/aop-cambridge-core/content/view/89B03C1523719E32CEF1D523865311BC/S1355770X18000402a.pdf/effects_of_energy_price_changes_heterogeneous_welfare_impacts_and_energy_poverty_in_indonesia.pdf ********************************************************************* ********************************************************************* We study the welfare and energy poverty implications of energy price change scenarios in Indonesia. Our analysis extends previous analyses of energy price impacts at the household level in three ways. First, by employing a household energy demand system (QUAIDS), we are able to distinguish between first- and second-order welfare effects over the income distribution. Second, our results point to the ownership of energy-processing durables as another source of impact heterogeneity. Third, we extend the welfare analysis beyond the money-metric utility effects and look at energy poverty, which is understood as the absence of or imperfect access to reliable and clean modern energy services. The analysis indicates that energy prices may serve as an effective instrument to reduce energy use but also have important adverse welfare effects. The latter can, however, be mitigated by appropriate compensation policies.

Mexico recently declared ambitious goals in reducing domestic CO2 emissions and introduced a carbon tax in 2014. Although negative effects on household welfare and related poverty measures are widely discussed as possible consequences, empirical evidence is missing. We try to fill this gap by simulating an input-output model coupled with household survey data to examine the welfare effects of different carbon tax rates over the income distribution. The currently effective tax rate is small and has negligible effects on household welfare. Higher simulated tax rates, maintaining the current tax base, show a slight progressivity but welfare losses remain moderate. Welfare losses, regressivity and poverty rise more with widening the tax base towards natural gas and the other greenhouse gases methane (CH4) and nitrous oxide (N2O) mainly through food price increases. For a complete analysis of the policy, we simulate a redistribution of calculated tax revenues and find that the resulting effects become highly progressive, also for high rates, wider tax bases and even in the absence of perfect targeting of social welfare programs.

We analyse the effects of environmental taxes on welfare and carbon emissions at the household level for the case of Mexico. The integrated welfare-environmental analysis, which is based on a censored energy consumer demand system, extends previous work in two ways. First, the estimation of a full matrix of substitution elasticities allows us to test the necessity of incorporating second-order effects into the welfare analysis. Second, the substitution elasticities derived from the demand system are used to estimate the shortrun CO2 emission-reduction potential. We find that first-order approximations of welfare effects provide reasonable estimates, particularly for carbon taxes. Analog to evidence in other low- and middle-income countries, the taxation of all energy items is found to be regressive, with the exception of motor fuels. The analysis of the emission implications of different tax scenarios indicates that short-run emission reductions at the household level can be substantial - though the effects depend on how revenue is recycled. This effectiveness combined with moderate and manageable adverse distributional impacts renders the carbon tax a preferred mitigation instrument. Considering the large effect of food price increases on poverty and the limited additional emission-saving potential, the inclusion of CH4 and N2O in a carbon tax regime is not advisable.

The unexpected Eurozone Sovereign Debt Crisis (2010–2012) aroused different attempts of interpretation among analysts and practitioners. While some attributed the crisis to a “contagion” effect of the Subprime Mortgages Financial Crisis in the United States (2007–2009), others saw in it an expression of deeper fundamental economic imbalances. This chapter presents an evaluation of whether there is convergence or divergence in the sectorial international competitiveness of the Eurozone area countries. A Dynamic Panel Data analysis on country-level exports for all Eurozone members for a period that goes from 1993 to 2014 finds significant evidence of international competitiveness convergence in four- out of 10-export sectors, and no significant evidence of divergence in the rest. While that evidence is not consistent with the high expectations generated by monetary integration more than 15 years ago, those four sectors correspond to high value-added economic activities and, in that sense, indicate a more homogeneous productive modernization process is taking place in the area.

This paper analyzes the actors in the climate change arena and their influence in directing Mexico toward policies that decrease greenhouse gas emissions, such as the carbon tax and climate change law. The network analysis of the agreement of these laws and public policies in Mexico is a lesson for any country that is in the process of designing and adopting environmental laws. The research is performed using a network analysis that is derived from interviews with various main actors and a discourse analysis of the media. Results show that actors do not coordinate their efforts-they meet frequently but in different inter-ministerial commissions-and do not enforce the same policies. The actors in the industry have formed strong coalitions against the carbon tax and the General Law on Climate Change, whereas international institutions have formed coalitions that support these policies and laws.

A SAM-based price model for Mexico is developed in order to assess the effects of the carbon tax, which was part of the fiscal reform approved in 2014. The model is formulated based on a social accounting matrix (SAM) that distinguishes households by the official poverty condition and geographical area. The main results are that the sector that includes coke, refined petroleum and nuclear fuel shows the highest price increase due to the direct impact of the carbon tax; in addition, air transport and inland transport are the most affected sectors, in an indirect manner, because both employ inputs from the former sector. Also, it is found that welfare diminishes more in the rural strata than in the urban one. In the urban area, the carbon tax is regressive: the negative impact of carbon tax on family welfare is greater on the poorest families.

This paper analyses why middle-income countries incentivize renewable energy despite inexpensive domestic fossil fuel resources and lack of international support. We examine the politics of renewable energy programs in Mexico, South Africa and Thailand. All three countries hold abundant local fossil fuel and renewable energy resources. We argue that renewable energy programs become implementable policy options in fossil fuel resource-rich middle-income countries when coalitions of powerful political actors support them. This study presents an analysis of the domestic coalitions in support of and those in opposition to renewable energy policies from a discourse network perspective. Discourse networks reflect actors and the arguments they share to advance or hamper the policy process. The analysis draws on a data set of 560 coded statements in support or opposition of renewable energy from media articles, policy documents and interviews. Findings show similar structures of competing coalitions in all three countries, with the discourse in all three countries revealing strong linkages between environmental and economic considerations.

http://www.cid.harvard.edu/Economia/Forthcoming%20papers/JChapa%20AOrtega%20SAM%20Mexico%20Aug%202016.pdf In this paper, input-output and accounting multiplier models are formulated to identify the main emitters of direct, indirect and induced carbon dioxide (CO2) for the Mexican economy. The models are based on a Social Accounting Matrix for Mexico, with disaggregated household income and consumption patterns according to the official poverty line. The results show that the final users of the inputs that embody high levels of CO2 emissions include: 1) construction; 2) electricity, gas and water supply; 3) inland transport; 4) food, beverages and tobacco, and; 5) coke, refined petroleum and nuclear fuel. The findings suggest that the implementation of a carbon tax could damage poor families, since these families generate high direct, indirect and induced CO2 emissions per unit of income, as a consequence of their consumption patterns of fuels and the products that embody high CO2 emissions levels (e.g., agriculture, hunting, forestry and fishing).