Upstream versus Downstream Implementation of Climate Policy

Mansur, Erin T.

doi:10.7208/chicago/9780226921983.003.0012

Cited by 18 publications

(14 citation statements)

References 13 publications

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“…Carbon pricing mechanisms intended to regulate emissions may be imposed at any point in the supply chain of emissions. The economic burden of such regulation will ultimately be distributed among producers and consumers according to the relative price elasticities of supply and demand-regardless of where taxes are remitted or permits are required (11,12), but the overall efficiency of the policy may depend on the point of regulation and the countries and sectors implementing the pricing mechanism (13).…”

Section: Discussionmentioning

confidence: 99%

“…Furthermore, fossil fuel resources are sufficiently concentrated such that, if the relatively few countries that extract the most fuels imposed a price on carbon at the point of extraction, the economic burden of that regulation would be shared among all of the beneficiaries of those fuels, with very little opportunity for carbon leakage (13,16). Manufacture of goods may shift from one country to another, but fossil resources are geographically fixed.…”

Section: Discussionmentioning

confidence: 99%

See 1 more Smart Citation

The supply chain of CO₂emissions

Davis

Peters

Caldeira

2011

Proc. Natl. Acad. Sci. U.S.A.

413

221

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CO 2 emissions from the burning of fossil fuels are conventionally attributed to the country where the emissions are produced (i.e., where the fuels are burned). However, these production-based accounts represent a single point in the value chain of fossil fuels, which may have been extracted elsewhere and may be used to provide goods or services to consumers elsewhere. We present a consistent set of carbon inventories that spans the full supply chain of global CO 2 emissions, finding that 10.2 billion tons CO 2 or 37% of global emissions are from fossil fuels traded internationally and an additional 6.4 billion tons CO 2 or 23% of global emissions are embodied in traded goods. Our results reveal vulnerabilities and benefits related to current patterns of energy use that are relevant to climate and energy policy. In particular, if a consistent and unavoidable price were imposed on CO 2 emissions somewhere along the supply chain, then all of the parties along the supply chain would seek to impose that price to generate revenue from taxes collected or permits sold. The geographical concentration of carbon-based fuels and relatively small number of parties involved in extracting and refining those fuels suggest that regulation at the wellhead, mine mouth, or refinery might minimize transaction costs as well as opportunities for leakage.carbon intensity of economy | emissions embodied in trade | emissions from traded fuels | international incidence of carbon price A nthropogenic climate change is driven by CO 2 emissions from the burning of fossil fuels (1, 2), which are generally attributed to the country where the emissions are produced (i.e., where the fuels are burned) (3). However, these productionbased accounts differ substantially and increasingly from consumption-based accounts of where goods associated with emissions are ultimately consumed, primarily because of exports from China and other emerging markets to consumers in developed countries (4-8). In addition, fossil fuel resources are more geographically concentrated than energy demand, and therefore, fuels burned to generate energy have, in many cases, been extracted far from the point of combustion and resulting CO 2 emissions (9). As a result, goods and services consumed in one country are commonly produced in another country using fossil fuels extracted in a third country. Understanding the distribution of interests along this supply chain may facilitate international efforts to limit CO 2 emissions from the burning of fossil fuels. The distribution of emissions along the supply chain also has important implications for the international incidence of the economic burden of a given climate policy. Given these implications, we present results from a model that tracks global CO 2 emissions from the source of extracted fossil fuels through the production of emissions during combustion of those fuels to the consumption of goods and services related to those emissions to generate a consistent set of accounts that span the global supply chain of CO 2 emissi...

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

The supply chain of CO₂emissions

Davis

Peters

Caldeira

2011

Proc. Natl. Acad. Sci. U.S.A.

413

221

View full text Add to dashboard Cite

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“…But CCS will only become cost-effective if technology advances dramatically or if carbon tax rates are much higher than the range of current proposals. Mansur (2012) provides an excellent discussion of important considerations in choosing the point in the supply chain to apply a corrective tax. Because combustion-related CO 2 emissions depend only on the carbon content of the fuel, these considerations argue for imposing the tax at natural choke points in the fossil fuel supply chain, where the number of entities subject to the tax would be relatively small, thus minimizing enforcement and compliance costs.…”

Section: Tax Base and Point Of Collectionmentioning

confidence: 99%

Environmental Taxation

Williams¹

2016

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This paper examines potential environmental tax policy reforms. It focuses primarily on a carbon tax, but also more briefly considers a range of other possible changes. These include revising or eliminating various energy and environmental tax credits and deductions (many of which might become unnecessary in the presence of a carbon tax), as well as changes to energy taxes that have substantial environmental implications (such as the federal gasoline tax). The paper draws on recent theoretical and empirical research to evaluate the effects of such reforms on tax revenue, pollution emissions, economic efficiency, and income distribution.

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“…First, accurately identifying the carbon emissions associated with a substantial number of goods and services can become administratively burdensome (Helm 2012). Second, significant transaction costs may originate from monitoring and enforcing a potentially large number of regulated firms along the value chain (Mansur 2012). Third, a price on carbon consumption may have particular positive or negative implications for economic efficiency and emissions leakage (Bushnell and Mansur 2011).…”

Section: Figure 1 Points Of Compliance For Carbon Pricesmentioning

confidence: 99%

Pricing Carbon Consumption: A Review of an Emerging Trend

Munnings

Acworth

Sartor³

et al. 2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractNearly every carbon price regulates the production of carbon emissions, typically at midstream points of compliance, such as a power plant. Over the last six years, however, policymakers in Australia, California, China, Japan, and Korea implemented carbon prices that regulate the consumption of carbon emissions, where points of compliance are farther downstream, such as distributors or final consumers. This article aims to describe the design of these prices on carbon consumption, understand and explain the motivations of policymakers who have implemented them, and identify insights for policymakers considering whether to price carbon consumption. We find a clear trend of policymakers layering prices on carbon consumption on top of prices on carbon production in an effort to improve economic efficiency by facilitating additional downstream abatement. In these cases, prices on carbon consumption are used to overcome a shortcoming in the price on carbon production: incomplete pass-through of the carbon price from producers to consumers. We also find that some policymakers implement prices on carbon in an effort to reduce emissions leakage or because large producers of carbon are not within jurisdiction. Since policymakers are starting to view prices on carbon consumption as a strategy to improve economic efficiency and reduce emissions leakage in a way that is compatible with local and international law, we expect jurisdictions will increasingly implement and rely upon them.

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Upstream versus Downstream Implementation of Climate Policy

Cited by 18 publications

References 13 publications

The supply chain of CO₂emissions

The supply chain of CO₂emissions

Environmental Taxation

Pricing Carbon Consumption: A Review of an Emerging Trend

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Upstream versus Downstream Implementation of Climate Policy

Cited by 18 publications

References 13 publications

The supply chain of CO2emissions

The supply chain of CO2emissions

Environmental Taxation

Pricing Carbon Consumption: A Review of an Emerging Trend

Contact Info

Product

Resources

About

The supply chain of CO₂emissions

The supply chain of CO₂emissions