The Taxation of Motor Fuel: International Comparison
AbstractWe 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 19461.
Date of creation: 19 Dec 2009
Date of revision:
Fuel taxation; corrective taxation; climate change; greenhouse gas emissions;
Other versions of this item:
- Ley, Eduardo & Boccardo, Jessica, 2010. "The taxation of motor fuel : international comparison," Policy Research Working Paper Series 5212, The World Bank.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-16 (All new papers)
- NEP-ENE-2010-01-16 (Energy Economics)
- NEP-ENV-2010-01-16 (Environmental Economics)
- NEP-PUB-2010-01-16 (Public Finance)
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