Eduardo, Ley and Jessica, Boccardo (2009): The Taxation of Motor Fuel: International Comparison.
Download (321kB) | Preview
We apply the Parry-Small (2005) framework to asses whether the level taxation of motor fuel is broadly appropriate in a group of countries (OECD, BRICs and South Africa) accounting for more than 80 percent of world greenhouse gas (GHG) emissions. This paper deals with emissions from oil combustion in transport, which accounts for about 40 percent of \co2\ emissions. In the benchmark specification, we find that six countries (accounting, in turn, for more than 40 percent of motor-fuel GHG world emissions) would be undertaxing motor fuel. We evaluate the sensitivity of the results to the values of the elasticities and externalities that we use. We find that varying the values of these parameters (within the level of uncertainty reasonably associated with them) significantly affects the results. This implies that, while informative, the results must be taken as indicative. Further analysis for a particular country must rely in a well-informed choice for the values of their country-specific parameters.
|Item Type:||MPRA Paper|
|Original Title:||The Taxation of Motor Fuel: International Comparison|
|English Title:||The Taxation of Motor Fuel: International Comparison|
|Keywords:||Fuel taxation, corrective taxation, climate change, greenhouse gas emissions|
|Subjects:||H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy
H - Public Economics > H8 - Miscellaneous Issues > H87 - International Fiscal Issues ; International Public Goods
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities ; Redistributive Effects ; Environmental Taxes and Subsidies
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy
|Depositing User:||Eduardo Ley|
|Date Deposited:||22. Dec 2009 06:12|
|Last Modified:||12. Feb 2013 20:59|
Ahmad, E., and N. Stern (1991) The theory and practice of Tax Reform in Developing Countries, Melbourne: Cambridge University Press.
Aldy, J.E., E. Ley, and I.W.H. Parry (2008) "A Tax-Based Approach to Slowing Climate Change;" National Tax Journal 61, 493-517.
Amundsen, E. S. and R. Schob (1999) "Environmental Taxes on Exhaustible resources", European Journal of Political Economy 15, 311-329.
Atkinson, A.B., and J.E Stiglitz (1980) Lectures on public economics, New York: McGraw-Hill Book Co.
Bacon, R. and others (2007) "Growth and CO2 Emissions: How do Different Countries Fare?" (unpublished: The World Bank).
Baumol, W. (1972), "On Taxation and the Control of Externalities"', American Economic Review, 62(3), 307-321
Baumol, W., and W. Oates (1971), "The Use of Standards and Prices for the Protection of the Environment", Swedish Journal of Economics, March, 73, pp. 42-54
Baumol, W. and W. Oates (1988) The Theory of Environmental Policy, (2nd edition) Cambridge University Press, Cambridge.
Bergstrom, T.C. (1982) "On capturing oil rents with a national excise tax;" American Economic Review, 72(1), 194--201.
Carisma B. and Lowder S. (2008) "Economic Cost of Traffic Congestion: a literature review for multiple Locations" http://greenconsumerism.net/wp-content/uploads/2008/08/the-cost-of-traffic-congestion.pdf
Connelly and Supangan (2006), "The economic costs of road traffic crashes: Australia, states and territories" Accident Analysis \& Prevention, 38(6), 1087--1093.
Creutzig, F., He, D. (2009). "Climate change mitigation and co-benefits of feasible transport demand policies in Beijing". Transportation Research D 14, 120--131.
Diamond, P.A. and J.A. Mirrlees (1971) "Optimal Taxation and Public Production I: Production Efficiency" and "II: Tax Rules" American Economic Review 61, 8--27 and 261--278.
Farzin, Y.H. (1996) "Optimal pricing of environmental and natural resource use with stock externalities", Journal of Public Economics, 62, 31-57.
IEA (2007) Energy Use in the New Millennium Trends in IEA Countries. International Energy Agency. Paris: OECD.
IEA (2008) Review of International Policies for Vehicle Efficiency. International Energy Agency. Paris: OECD.
INFRAS/IWW (2000) External Costs of Transport: Accidents, Environmental and Congestion Costs of Transport in Western Europe. Zurich/ Karlsruhe.
INFRAS/IWW (2004) External Costs of Transport: Update Study, October
Jayaram, K. and others (2005) "The impact of road traffic congestion on supply chain: insights from Auckland, New Zealand, " International Journal of Logistics 8(2), 159--180.
Johnson, P., McKay S. and Smith S. (1990), The Distributional Consequences of Environmental Taxes. Institute for Fiscal Studies Commentary 23. London.
Karp, L., and D. M. Newbery (1991) "Optimal tariffs on exhaustible resources", Journal of International Economics, 30, 285--299.
Karp, L., and D. M. Newbery (1992) "Dynamically consistent oil import tariffs", Canadian Journal of Economics, 25(1), 1--21.
Kay, J.A., and M.A. King (1980) The British Tax System, Oxford: Oxford University Press.
Maskin, E., and D. M. Newbery (1990) "Disadvantageous Oil Tariffs and Dynamic Consistency", American Economic Review, 80(1), 143-56.
Mendoza, Enrique G., Razin, Assaf, Tesar, Linda L., (1994) "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, 34, 3, pp. 297--323.
Mendoza, A., Chavarria, J. M., and Mayoral, E. (1998) Some Measures to Improve Safety on Road Motor Transport in Mexico. Transportation Research Record 1613, 63--70, Transportation Research Board (TRB), Washington DC, U.S.A.
Metcalf, G.E., and D.A. Weisbach (2009) "Design of a Carbon Tax." University of Chicago Law and Economics, Olin Working Paper 447.
Mirrlees, J. A. (1976) "Optimal tax theory: a synthesis," Journal of Public Economics, 6(4), 327--358.
Mohan, D. (2002) "Social Cost of Road Traffic Crashes in India", Proceedings First Safe Community Conference on Cost of Injury, Viborg, Denmark, pp. 33--38, Indian Institute of Technology. Table available at: http://www.vtpi.org/tca/tca0503.pdf
Myles, G.D. (1995) Public Economics, Cambridge: Cambridge University Press.
Ochoa, F. y Asoc. and Radian Corporacion (1997) "Estrategia Integral de Transporte y Calidad del Aire para la Zona Metropolitana del Valle de Mexico" (ZMVM), Estudio 8: Anexo A. C2-4, Externalidades del Transporte en la ZMVM. (Mexico: Comisi\'on Metropolitana de Transporte y Vialidad.)
Parry, I.W. H. and K.A. Small (2005) "Does Britain or the United States Have the Right Gasoline Tax?" American Economic Review, 95(4), 1276--1289.
Parry, I.W.H., and others (2006) "The Incidence of Pollution Control Policies" in The International Yearbook of Environmental and Resource Economics 2006/2007, edited by T. Tietenberg, and H. Folmer. Northampton, MA: Edward Elgar.
Pearce, D. (1991) "The role of carbon taxes in adjusting to global warming," Economic Journal, 101 (407) 938--48.
Pigou, A.C. (1920) The Economics of Welfare, New York: Macmillan.
Ramsey, F.P. (1927) "A contribution to the theory of taxation" Economic Journal, 37, 47--61.
Willoughby, C. (2002) "Managing Motorization". Discussion Paper 42. Transportation, Water, and Urban Development (TWU). Transport Division. The World Bank.
UNESCAP (2007) "Sustainable Infrastructure in Asia," Economic and Social Commission for Asia and the Pacific, New York, United Nations.
Zhang, Z. and Baranzani, A. (2000). "What do we know about carbon taxes? an inquiry into their impacts on competitiveness and distribution of income" MPRA Paper 13225.
Available Versions of this Item
- The Taxation of Motor Fuel: International Comparison. (deposited 22. Dec 2009 06:12) [Currently Displayed]