"Transport related environmental policy instruments
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1 "Transport related environmental policy instruments EUROSAI WGEA Stockholm Thomas Sterner Gothenburg
2 Policy Instruments Depositrefund PRICE- TYPE Taxes Subsidy (Reduct.) Charge, Fee/Tariff Refunded Charge Policy Instruments RIGHTS REGULATION INFO/LEGAL Property rights Technological Standard Public participation Tradable Performance Information permits Standard disclosure Tradable Ban Voluntary Quotas Agreement Certificate Permit Liability CPR Zoning
3 Historical variation of atmospheric CO 2 - concentration 381 ppm
4 Historical variation of atmospheric CO 2 - concentration This is the period of time we usually call History ppm
5 800 Radical goals for the future? EU goal (?) ppm
6 CHALMERS CLIMATE CALCULATOR Christian Azar, Daniel Johansson (Frt) (1 region vs) EMISSIONS STOCK OF C TEMPERATURE
7 STABILIZE EMISSIONS
8
9 SLASH EMISSIONS 2% IMMEDIATELY
10 Emissions of CO 2 (tc/cap) CO 2 emissions per capita (as C) USA Canada, Australia, New Zeeland Russia Japan Western Europe (OECD) Eastern Europe Middle east Global mean China Latin America Asia Africa India
11 IPPC 4 and Stern Climate change anthropogenic Costs of doing nothing considerable Climate change costs ~[5-20%] of GDP Costs of action smaller ~ 1%
12 World decoupling Thomas Sterner Göteborg University
13 Thomas Sterner Göteborg University
14 Thomas Sterner Göteborg University
15 What reduction for transport? 50-70% by 2050 To date Fast Growing; Instruments? 1.Techn. & Beh.
16 The most efficient pol Instrument? Kyoto ETS Agricultural policy Subsidies R&D fusion, solar, wind.energy saving Chinese One Child policy
17 The most efficient pol Instrument? Kyoto ETS Agricultural policy Subsidies R&D fusion, solar, wind.energy saving Chinese One Child policy Gasoline Taxes!
18 Growth and Environment 2050 Can we increase income 50% & reduce fossil emissions 50%?
19 Growth and Environment 2020 Can we increase income 50% & reduce fossil emissions 50%? Take the transport sector: A simple modell for fuel demand is Q = Y a P b Elasticities 1 for income Y, 0.8 for price P
20 Simple-minded economist solves major problem: All you need is to raise price of fuel by 300%! Because P = (0.5/1.5) -1/0.8 = 3.95
21 300%! Is that realistic?? What happens to Welfare? Isn t there some other way? Is it possible?
22 Is that POSSIBLE? Yes : Europe has already done it! International price of fuel is 0,3 $/l. If the Whole World had prices like UK or Italy a large share of the problem would be solved. Though only for transport. We haven t done much concerning industry and electricity yet
23 Price of gasoline Gasoline per capita Petrol prices Consumption/cap ITALY UK AUSTRALIA CANADA USA
24 Effect of higher fuel price in OECD country price Fuel use Hypothetical fuel use Reduction in % AUSTRAL 0, CANADA 0, FRANCE 0, GERM 0, ITALY 1, JAPAN 0, MEXICO 0, NETH 1, SPAIN 0, UK 1, USA 0, OECD 0,
25 Transport Fuel Use in OECD Gtons fuel (and ~C*(12/14)) Real UK prices US prices Fuel use 1,13 0,72 1,47-36% +30%
26 Reactions?
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36 Why are they so angry?
37 shares Gasoline taxes Regressive?? all_fuel deciles all_fuel Table1: Budget shares of fuels (Transport + Cooking and Lighting Fuels)
38 budget share India contd deciles trans_fuel PT tot_tran
39 Percentage expenditure share of fuel S Africa Figure 1: Fuel expenditure as a share of total household expenditure Poorest Income decile Richest
40 Does a gas tax hur the poor? WHO PAYS THE TAX? Share of income spent on good X? Indirect uses.. Definition of income Adaptation behaviour OTHER ASPECTS: WHO SUFFERS POLLUTION TRANSITORY EFFECTS
41 Tax burden as % of annual disposable income Using Income 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% France Germany Serbia Spain Sw eden United Kingdom 0,5% 0,0% Income deciles*
42 Tax burden a % of total annual expenditures Using Expenditure 3,0% 2,5% 2,0% 1,5% 1,0% France Germany Italy Spain Sw eden Serbia United Kingdom 0,5% 0,0% Income deciles*
43 Conclusion In Poor countries progressive In most rich countries neutral If regressive easily compensated
44 Addendum Other policies: Congestion pricing, road tolls, railways etc etc MY opinion Real time marginal pricing + Technology support to advanced R&D +
45 Addendum Other policies: Congestion pricing, road tolls, railways etc etc MY opinion Real time marginal pricing + Technology support to advanced R&D + Reduce parking fees
46
47
48 Subsidies for environmental cars Annual tax: Renew.360; gasoline 2046; Diesel 4011 ( kr >1July) Difference several hundred /yr Parking kr/yr Env car subsidy10000 = 2000/yr Tax benefit: 50% of ~15000 Kr Total kr/yr or 0,5-1 kr/km Reasonable?
49 CO2 storage under ground
50 Houses without Heating In Sweden!?
51 TWh per år Fuel use in Swedish district heating OTHERS OIL COAL BIOMASS
52 There is enough energy
53 tc/cap/year Per capita targets (EU) EU per capita emissions targets towards 350, 450 and 550 ppm ppm 450 ppm 550 ppm
54 Per capita targets (Africa) 4 3,5 3 2,5 2 1, % 1 0,
55 I put in the effect of 8% growth for 35 years to show you the magnitude of this challenge
56 Does a gas tax hur the poor? WHO PAYS THE TAX? Share of income spent on good X? Indirect uses.. Definition of income Adaptation behaviour OTHER ASPECTS: WHO SUFFERS POLLUTION TRANSITORY EFFECTS
57 Tax burden as % of annual disposable income Using Income 3,5% 3,0% 2,5% 2,0% 1,5% 1,0% France Germany Serbia Spain Sw eden United Kingdom 0,5% 0,0% Income deciles*
58 Tax burden a % of total annual expenditures Using Expenditure 3,0% 2,5% 2,0% 1,5% 1,0% France Germany Italy Spain Sw eden Serbia United Kingdom 0,5% 0,0% Income deciles*
59 A summary measure.
60 Calculating Suits (1-L/K) 100 Accum ulated Perce nt of Total Tax Burde n, T K 50 L 45 0 Accumulated Percent of Income(temporary or lifetime), y i. 50 S 1 10 i T( y i ) T( y 5000 i ) y y 1 i i 1
61 Using expenditures
62 SUITS income Effect Fran Ger Italy Serbia Spain Swe U K Y TOT -0,157-0,067 0,172-0,086-0,178-0,125 Y Direct -0,155-0,066 0,187-0,086-0,171-0,123 Life-Y TOT -0,024 0,008-0,110 0,051-0,002 0,064-0,004 Life Y Direct -0,021 0,009-0,110 0,066-0,002 0,072-0,003
63 Percentage expenditure share of fuel S Africa Figure 1: Fuel expenditure as a share of total household expenditure Poorest Income decile Richest
64 Public transport share of total exp._ Public transport expenditures as share of total household expenditures Household income decile
65 Private transport share of total exp. Private transport expenditures as share of total household expenditures Household income decile
66 Transport fuel share of total exp. Transport fuel expenditures as share of total household expenditures Household income decile
67 Mexico % I II III IV V VI VII VIII IX X Carros y gasolina Transporte público
68 Including use of diesel in PubTr Roughly 25% of bus fare is diesel.. Add shares from private fuel Tax in Mexico proportional
69 shares Gasoline taxes Regressive in INDIA? all_fuel deciles all_fuel Table1: Budget shares of fuels (Transport + Cooking and Lighting Fuels)
70 budget share India contd deciles trans_fuel PT tot_tran
71 Percent of Budget Taking indirect effects into account Incidence of Fuel Tax (Rural) Coal PET GAS Kerosene Fuel Consumption Deciles
72 Percent of Budget Urban Incidence of Fuel Taxes (Urban) COAL PET GAS Kerosene Fuel Consumption Deciles
73 Most developing: Progressive
74 Progressivity vs Income
75
76 Prog in Poor countries: Coming back to USA; Adaptation West and Williams: for USA More regressive with Income than Expenditures Less regressive when you take adaptation into account Even less regressive with individual el Progressive with EV - partic with refunding of revenue.
77 Tax Reform more possibilities
78 CAN YOU MAKE A GAS TAX PROG? Of course. You could make the whole tax system progressive. Is there demand for this? FEASIBILITY =/= POVERTY FOCUS
79 THANKS for listening! The Consumer Burden of A Carbon Tax On Gasoline Hassett, Mathur & Metcalf Distributional and Efficiency Impacts of increased U.S. Gasoline Taxes, Bento, Goulder, Jakobsen & von Haefen Estimates from a consumer demand system: implications for the incidence of environmental taxes West & Williams III Sterner, Do gas taxes hurt the Poor?, RFF Press Sweden Fairness in climate allocation
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