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.

Evaluating policy packages for a low-carbon transitions – Principles and applications

The low carbon transition has become a major challenge for countries in order to limit global temperature increase to acceptable levels. Steering this transition is a very challenging task and the topic of this Special Issue. Transitions require change at system level which asks for a search of appropriate change agents and a proper design of incentives. Economic analysis could be particularly helpful here by focusing on i) descriptive instead of normative analysis of the complexities of the system, and ii) evaluation of policy packages instead of single policy instruments due to the multiple market failure context. In addition I introduce the different contributions in this Special Issue showing how they add to a better understanding of the steering question and how this should help policy makers to improve policies along the transition path.</p

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

Lessons from the Polder: Is Dutch CO2-Taxation Optimal?

This paper evaluates energy tax reform in the Netherlands between 1988 and 2002 from a climate change perspective. A tax on fuels and the so-called regulatory energy tax since 1996 are examples of indirect and non-uniform taxation of emissions. The overall tax base and rate structure corroborates recent theoretical findings that heterogeneity in production processes and transaction costs may justify optimal departures from the Pigovian corrective tax rule. Surprisingly, the Dutch revenue-raising tax matches the (modified) Pigovian policy prescription rather well, whereas the regulatory energy tax mainly follows the revenue raising Ramsey logic. Further improvements of the energy tax structure are also discussed, such as targeting the energy tax base and linking the tax rate more precisely to fuel characteristics.Climate change, Energy taxes, Optimal indirect taxation, Specific and ad valorem taxation

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

Differential Impact of Environmental Policy Instruments on Technological Change: A Review of the Empirical Literature

This survey reviews the empirical literature on the impact of environmental policy instruments on the rate and direction of technological change. The survey is explicitly focused on the empirical identification of the hypothesis to expect a stronger impact from market-based incentives than from non-market alternatives. The general picture emerging from the recent literature is that there is a clear impact of environmental policy on invention, innovation and diffusion of technologies. Although studies on a differential impact are still very scarce, the available evidence suggests that innovators look carefully for rent opportunities, which in turn depend on the specific incentives signalled by the type of (environmental) policy

Taxes and fees of regional water authorities in the Netherlands

The Dutch water management system is fairly unique in the world due to the comprehensive water quantity regulation through dykes and artificial waterways and its linkage with water quality regulation. The existing levy system is based on principles of cost recovery and ‘stakepay-say’ (i.e. strong stakeholder participation and more influence for those who pay levies). The peculiarities of the levy base clearly had a strong impact on businesses’ behaviour in the past, investing in their own water treatment plants to avoid payment of levies. Moreover, the levy also seems to have contributed to innovation in the waste water treatment sector. Although the Dutch water levy system seems to be working quite well, as identified in a 2014 OECD report there remain opportunities for further improvement and an evaluation of the system is currently underway