A Tax Mix Change to Reduce Greenhouse Gas Emissions

Placing a price on greenhouse gas emissions using an emissions tax or auctioning tradable permits provide the least cost government intervention to reduce pollution. Initial effects of the charge on pollution include an increase in the relative prices of greenhouse gas intensive products and production processes to reduce pollution, and a net increase in indirect taxes with a windfall boost to government revenue. There are at least three overlapping sets of economic efficiency, equity and political acceptance reasons for returning most of the windfall revenue gains to households as compensating income tax reductions and increases in social security payments as a tax mix change package. Most of the indirect tax increases will be passed onto consumers as a higher cost of living, albeit with changes in relative prices. With a likely regressive incidence, some compensation in a close to lump sum form has both equity and political acceptability claims. With no changes in market wages and nominal interest rates, the higher cost of living will further distort the effects of existing income taxes on labour and capital market decisions and their associated efficiency costs. Or, the cost of living increase will provide a catalyst for compensating increases in market wages and nominal interest rates, with the added risk of initiating an inflationary cycle. A tax mix change package has the potential to neutralise the negative effects of the associated increase in indirect taxation. Given the expected time path of increases in the pollution charge on greenhouse gas emissions, and of the windfall increase in indirect tax revenue, the details of new tax mix change package will need to be renegotiated every few years.Resource /Energy Economics and Policy,

Tax reform and the natural resource industries

Tax reforms passed by Federal Parliament in June 1999 include rationalising indirect taxes, a tax mix change, and a smaller fiscal surplus. The impact or first‐round effects on the natural resource industries indicate large gains. Important second‐round reactions, particularly a real currency appreciation, erode most of, and in some cases more than all of, the first‐round gains. A complete assessment requires the use of general equilibrium models.Resource /Energy Economics and Policy,

Water rights for variable supplies

The relative merits of different systems of property rights to allocate water among different extractive uses are evaluated for the case where variability of supply is important. Three systems of property rights are considered. In the first, variable supply is dealt with through the use of water entitlements defined as shares of the total quantity available. In the second, there are two types of water entitlements, one for water with a high security of supply and the other a lower security right for the residual supply. The third is a system of entitlements specified as state-contingent claims. With zero transaction costs, all systems are efficient. In the realistic situation where transaction costs matter, the system based on state-contingent claims is globally optimal, and the system with high-security and lower security entitlements is preferable to the system with share entitlements.property rights, state-contingent claims, water, Resource /Energy Economics and Policy,

Generic advertising without supply control: implications of funding mechanisms for advertising intensities in competitive industries

Producer profit‐maximising rules for generic commodity advertising programs and associated funding levies are derived. Lump‐sum, per unit and ad valorem levies, and government subsidy funding arrangements are compared and contrasted. The initial single‐product competitive market model is extended to incorporate international trade, government price policies, and multiple commodity interactions.Marketing,

Establishing and managing the environmental water reserve – the interaction between different government policies

Policy to protect river ecosystems has changed rapidly in Australia and the mechanisms to both establish and manage environmental water are still evolving. Policy has moved from providing a fixed environmental target (albeit varying between years) to one in which the environment can actively participate in the market, with the possibility of better fulfilling variable water requirements. However, the inherent nature of the Sustainable Diversion Limit (SDL), established under the Water Act 2007, is that it represents a fixed allocation to the environment. This paper considers the interaction the new SDL for the Murray Darling Basin and potential issues arising from the interaction with the government buyback initiative. While both the SDL and buyback have been discussed extensively, the interaction between the two policies has received little debate. Pairing these two policy initiatives will have implications for the flexibility of an environmental water reserve (EWR) and the ability for ongoing trade between the environment and consumptive water users. Our position is that the SDL, or preferably rules based water, should reflect an absolute minimum limit on environmental water requirements, while the buyback should provide the EWR with tradable water rights with the flexibility to respond to shifts in the environmental water demand curve by providing environmental water over and above the SDL. If both a buyback and minimum flow rules are in place, the SDL will provide little additional benefits but increase administrative costs and reduce flexibility. This has significant implications for the way the SDL and buyback strategy are structured.Environmental water, water markets, instream flows, sustainable diversion limits (SDLs), Environmental Economics and Policy, Resource /Energy Economics and Policy,

Levy-funded research choices by producers and society

Commodity levies are used increasingly to fund producer collective goods such as research and promotion. In the present paper we examine theoretical relationships between producer and national benefits from levy‐funded research, and consider the implications for the appropriate rates of matching government grants, applied with a view to achieving a closer match between producer and national interests. In many cases the producer and national optima coincide. First, regardless of the form of the supply shift, when product demand is perfectly elastic, or all the product is exported, domestic benefits and costs of levy‐funded research all go to producers and they have appropriate incentives. Second, if research causes a parallel supply shift, the producer share of research benefits is the same as their share of costs of a levy, and their incentives are compatible with national interests. In such cases, a matching grant would cause an over‐investment in research from a national perspective. However, if demand is less than perfectly elastic, and research causes a pivotal supply shift, the producer share of benefits is smaller than their share of costs of the levy, and they will under‐invest in research from a national point of view. A matching grant can be justified in such cases, however the magnitude of the optimal grant is sensitive to market conditions.Research and Development/Tech Change/Emerging Technologies,

Dynamic Industry Structure and Benefit Pass Through Rates from Generic Advertising

Marketing,

Surviving Sepsis Campaign: International guidelines for management of severe sepsis and septic shock: 2008

SCOPUS: ar.jinfo:eu-repo/semantics/publishe