Opimal Unilateral Climate Policy with Carbon Leakage at the Extensive and the Intensive Margin

Kruse‐Andersen, Peter K.; Sørensen, Peter Birch

doi:10.2139/ssrn.3887249

Cited by 1 publication

(2 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Hagem et al [30] demonstrate that both output-based and expenditure-based refunding lead to higher output and higher investments in the emission abatement equipment of polluting firms than the standard tax system. Kruse-Andersen and Srensen [19] point out that the optimal leakageadjusted tax-subsidy scheme can create a social welfare accounting for about 0.5% of the national income compared to a single uniform emissions tax.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Previous studies have confirmed that it is efficient to mitigate the inequities caused by emission regulations by combining them with compensatory instruments. Scholars have looked at the combination of an ETS or emission tax with subsidies for research and development (R&D) activities on energy efficiency or renewable sources [18,19]. They have also examined the EU ETS and free/over-allocated emissions allow for exemptions [20].…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Do Firms That Are Disadvantaged by Unilateral Climate Policy Receive Compensation? Evidence from China’s Energy-Saving Quota Policy

2022

View full text Add to dashboard Cite

Inequities caused by a unilateral climate policy may threaten the sustainability of CO2 emission reduction efforts by countries and firms, thus endangering sustainable development for humans and the eco-environment. However, few studies have conducted ex-post evaluations on whether environmentally regulated firms receive external compensation such as subsidies, tax reductions, and loan support. Thus, this study investigates whether firms experiencing inequitable conditions under China’s Energy-Saving Quota Policy (ESQP) are financially compensated. It develops a balanced panel of data from 6189 ESQP-regulated and 6189 unregulated firms from 2010 to 2013, and combines a probit model with the difference-in-differences method to conduct empirical analysis. The results show that ESQP-regulated firms receive more subsidy income and lower tax rates than unregulated firms. Of the ESQP-regulated firms, companies with higher energy-saving burdens receive larger subsidies and lower financial expense ratios than those with lower burdens. Additionally, firms that complete their energy-saving quotas are compensated with larger subsidies and/or lower financial expense ratios and tax rates than those that fail to complete them. Finally, state-owned firms receive more subsidies than private ones. Unlike the emission trading schemes implemented worldwide that formulate an exemption mechanism (i.e., free or over-allocated allowances), the ESQP does not exempt regulated firms from their energy-saving responsibilities. Rather, regulated firms receive a greater amount of external compensation in exchange for their reductions in energy consumption.

show abstract

Section: Literature Reviewmentioning

confidence: 99%