Economic, Environmental and International Trade Effects of the EU Directive on Energy Tax Harmonization
AbstractIn October 2003, the European Union introduced a Directive which widens the scope of the EU's minimum taxation system from mineral oils to all energy products including coal, natural gas and electricity. It aims at reducing distortions that currently exist between Member States as well as between energy products. In addition, it increases previous minimum tax rates and thus the incentive to use energy more efficiently. The Directive will lead to changes in the energy tax schemes in a number of countries, in particular some southern Member Countries (Greece, Spain, Portugal) and most of the Eastern European EU candidate countries. In this paper, we analyze the effects of the EU energy tax harmonization with GTAP-E, a computable general equilibrium model. Particular focus is placed on the Eastern European countries which became new members of the EU in May 2004. We investigate the effects of the tax harmonization on overall economic growth and sectoral development. Special attention is paid to international trade in order to analyze if competitiveness concerns which have been forwarded in the context of energy taxation are valid. Furthermore, the effect on energy consumption and emissions and thus the contribution to the EU's climate change targets is analyzed.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 462.
Length: II, 23, 2 p.
Date of creation: 2004
Date of revision:
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- F18 - International Economics - - Trade - - - Trade and Environment
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-20 (All new papers)
- NEP-ENE-2004-12-20 (Energy Economics)
- NEP-ENV-2004-12-20 (Environmental Economics)
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