A Note on Testing for Environmental Kuznets Curves with Panel Data

This paper casts doubt on empirical results based on panel estimations of an “inverted-U” relationship between per capita GDP and pollution. Using a new data set for OECD countries on carbon dioxide emissions for the period 1960-1997, we find that the crucial assumption of homogeneity across countries is problematic. Decisively rejected are model specifications that feature even weaker homogeneity assumptions than are commonly used. Furthermore, our results challenge the existence of an overall Environmental Kuznets Curve for carbon dioxide emissions.Environmental Kuznets Curves, Panel Data, Heterogeneity.

Should Energy Taxation “Go Dutch”?

Ökosteuer, Steuerwirkung, Optimale Besteuerung, Vergleich, Niederlande, Environmental tax, Effects of taxation, Optimal taxation, Comparison, Netherlands

Green Taxes and Administrative Costs: The Case of Carbon Taxation

This paper explores the trade-off between incentive effects and administrative costs associated with the implementation of various environmental tax instruments, with special reference to carbon taxes. In a simple model, we show under what conditions it is optimal to use input rather than emission taxes to internalize environmental externalities. Mixed tax regimes are also studied. If linkage of emissions to inputs is close, if abatement possibilities are costly, and if administrative costs of emission taxes are high, emission taxes should not be introduced. It is shown that these conditions directly apply to current tax policies toward CO2 emissions in several European countries that harness pre-existing energy taxes. First, there is a one-to-one correspondence between carbon content of energy and CO2 emissions. Second, only few possibilities exist to abate CO2 emissions separately. Third, energy excises allow to save on administrative costs. Broadening the carbon tax base by removing certain widely-used exemptions for energy production (and possibly adding emission taxes or abatement subsidies for selected industries) is likely to increase incentives for carbon reduction without significant additional administrative costs.

Environmental Kuznets Curves for CO2: Heterogeneity Versus Homogeneity

We explore the emissions income relationship for CO2 in OECD countries using various modelling strategies.Even for this relatively homogeneous sample, we find that the inverted-U-shaped curve is quite sensitive to the degree of heterogeneity included in the panel estimations.This finding is robust, not only across different model specifications but also across estimation techniques, including the more flexible non-parametric approach.Differences in restrictions applied in panel estimations are therefore responsible for the widely divergent findings for an inverted-U shape for CO2.Our findings suggest that allowing for enough heterogeneity is essential to prevent spurious correlation from reduced-form panel estimations.Moreover, this inverted U for CO2 is likely to exist for many, but not for all, countries.Environmental Kuznets Curves;(Semi)parametric Estimation;Heterogeneity

Reducing Rents from Energy Technology Adoption Programs by Exploiting Observable Information

In this paper, we study how regulators may improve upon the efficiency of their energy technology adoption programs by exploiting readily observable information to limit rent extraction by firms. Using panel data on 862 investment decisions in the Netherlands, we find that rent extraction is closely linked not only to technology characteristics, but also to the firm's capital budgetting technique. In particular, we find that firms are more likely to extract rent when either the technology's pay-back period or its required investment is lower, but less likely if they do not use a formal capital budgeting technique. Standard firm characteristics, such as size and sector, correlate with firms' use of capital budgeting techniques, thereby partly resolving the regulator's asymmetric information problem.rent extraction;tagging;tax expenditure programs;technology adoption subsidies;investment decisions;bivariate probit model

Reducing Rents from Energy Technology Adoption Programs by Exploiting Observable Information

In this CPB Discussion Paper, we study how regulators may improve upon the efficiency of their energy technology adoption programs by exploiting readily observable information to limit rent extraction by firms. Using panel data on 862 investment decisions in the Netherlands, we find that rent extraction is closely linked not only to technology characteristics, but also to the firm's capital budgetting technique. In particular, we find that rms are more likely to extract rent when either the technology's pay-back period or its required investment is lower, but less likely if they do not use a formal capital budgeting technique. Standard firm characteristics, such as size and sector, correlate with firms' use of capital budgeting techniques, thereby partly resolving the regulator's asymmetric information problem.

Environmental Taxes and Green Growth

Providing the right price incentives is key to stimulating green growth. This report discusses how to assess tax options in the context of energy and climate policy and offers some important lessons about environmental taxes. Solutions that may be cost efficient in the short term do not always contribute to achieving long-term goals. It is challenging to introduce smart environmental taxes that both help to achieve environmental goals and are simple to implemen

Ecologische economie: beleidsrelevant of niet?

In deze studie wordt de beleidsrelevantie van het relatief jonge onderzoeksveld van de ecologische economie getoetst. Nagegaan wordt in hoeverre de hier beloofde vernieuwende inzichten ook worden waargemaakt. Daartoe wordt aan de hand van de centrale inzichten uit de ecologische economie nagegaan of deze ook relevant zijn voor het Nederlandse milieubeleid. Dat blijkt slechts gedeeltelijk het geval. Veelal spelen de door deze stroming benadrukte aspecten reeds op enigerlei wijze een rol in het beleid, met name in de lange termijn strategie van het milieubeleid. Dit geldt bijvoorbeeld voor het belang van de fysieke dimensie van het economisch proces, maar ook voor de vermeende noodzaak tot een andere dan de gangbare economische waardebepaling. Zo is er al veel aandacht voor harde milieurandvoorwaarden en voor het belang van alternatieve gedragsmotieven en institutionele arrangementen. Niettemin lijkt er nog wel degelijk ruimte voor verbetering, zoals meer aandacht voor de fysieke terugkoppeling van overheidsbeslissingen, de rol van normen en waarden bij de gedragsbepaling en de endogeniteit van preferenties in verband met de instrumentkeuze, en de wijze waarop overheidsbeslissingen tot stand komen waarbij het milieubelang in het geding is