IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v50y2015icp251-263.html
   My bibliography  Save this article

An assessment of proposed energy resource tax reform in Russia: A static general equilibrium analysis

Author

Listed:
  • Orlov, Anton

Abstract

A large part of government revenues in Russia comes from royalties and export taxes on crude oil, oil products, and gas. Recently, the Russian government has considered reducing export taxes on crude oil and oil products compensated by an increase in the royalty on crude oil. The objective of the paper is to analyse the economy-wide effects of this proposal. Moreover, a hypothetical replacement of export taxes and royalties with a pure rent tax is analysed. A static, single-country, multi-sector computable generation equilibrium (CGE) model is employed. The primary findings are as follows. A replacement of export taxes on crude oil and oil products with a royalty on crude oil provides substantial allocative efficiency gains, but this policy is not a superior one. Welfare could be substantially improved when the export taxes and royalty are replaced with a pure rent tax that can be implemented in the form of a cash-flow tax. On the negative side, reducing export taxes on crude oil and oil products results in a strong appreciation of the currency. As a result, domestic producers become less competitive in domestic markets, and there is a massive increase in import demand.

Suggested Citation

  • Orlov, Anton, 2015. "An assessment of proposed energy resource tax reform in Russia: A static general equilibrium analysis," Energy Economics, Elsevier, vol. 50(C), pages 251-263.
    • Handle: RePEc:eee:eneeco:v:50:y:2015:i:c:p:251-263
    DOI: 10.1016/j.eneco.2015.05.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988315001632
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2015.05.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robin Boadway & Frank Flatters, 2023. "The Taxation of Natural Resources: Principles and Policy Issues," Springer Books, in: Anwar Shah (ed.), Taxing Choices for Managing Natural Resources, the Environment, and Global Climate Change, chapter 0, pages 17-81, Springer.
    2. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March.
    3. Ian W.H. Parry & Wallace E. Oates & Ian W.H. Parry & Wallace E. Oates, 2004. "Policy Analysis in the Presence of Distorting Taxes," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 4, pages 67-77, Edward Elgar Publishing.
    4. Lund, Diderik, 2002. "Rent taxation when cost monitoring is imperfect," Resource and Energy Economics, Elsevier, vol. 24(3), pages 211-228, June.
    5. Robin Boadway & Michael Keen, 2014. "Rent Taxes and Royalties in Designing Fiscal Regimes for Non-Renewable Resources," CESifo Working Paper Series 4568, CESifo.
    6. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production II: Tax Rules," American Economic Review, American Economic Association, vol. 61(3), pages 261-278, June.
    7. Orlov, Anton, 2015. "An assessment of optimal gas pricing in Russia: A CGE approach," Energy Economics, Elsevier, vol. 49(C), pages 492-506.
    8. McDonald, Scott & Thierfelder, Karen, 2004. "Deriving A Global Social Accounting Matrix From Gtap Versions 5 And 6 Data," Technical Papers 28716, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    10. Robin Boadway & Michael Keen, 2009. "Theoretical Perspectives On Resource Tax Design," Working Paper 1206, Economics Department, Queen's University.
    11. Burniaux, Jean-March & Truong, Truong P., 2002. "Gtap-E: An Energy-Environmental Version Of The Gtap Model," Technical Papers 28705, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Heyndrickx, Christophe & Alexeeva-Talebi, Victoria & Tourdyeva, Natalia, 2012. "To raise or not to raise? Impact assessment of Russia's incremental gas price reform," ZEW Discussion Papers 12-052, ZEW - Leibniz Centre for European Economic Research.
    13. McDonald, Scott & Karen Thierfelder, 2004. "Deriving a Global Social Accounting Matrix from GTAP Versions 5 and 6 Data," GTAP Technical Papers 1645, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    14. Devarajan, Shantayanan & Go, Delfin & Schiff, Maurice & Suthiwart-Narueput, Sethaput, 1996. "The whys and why nots of export taxation," Policy Research Working Paper Series 1684, The World Bank.
    15. Devarajan, Shantayanan & Robinson, Sherman, 2002. "The influence of computable general equilibrium models on policy," TMD discussion papers 98, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Huihui & Chen, ZhanMing & Wang, Jianliang & Fan, Jihong, 2017. "The impact of resource tax reform on China's coal industry," Energy Economics, Elsevier, vol. 61(C), pages 52-61.
    2. Ieva Meidute-Kavaliauskiene & Vida Davidaviciene & Shahryar Ghorbani & Iman Ghasemian Sahebi, 2021. "Optimal Allocation of Gas Resources to Different Consumption Sectors Using Multi-Objective Goal Programming," Sustainability, MDPI, vol. 13(10), pages 1-19, May.
    3. Lin, Boqiang & Jia, Zhijie, 2019. "How does tax system on energy industries affect energy demand, CO2 emissions, and economy in China?," Energy Economics, Elsevier, vol. 84(C).
    4. Dzyuba, Yu. & Bakalova, I., 2023. "CGE models for resource-based economy: A comprehensive bibliometric analysis," Journal of the New Economic Association, New Economic Association, vol. 61(4), pages 12-50.
    5. Beer, Sebastian & Loeprick, Jan, 2017. "Taxing income in the oil and gas sector — Challenges of international and domestic profit shifting," Energy Economics, Elsevier, vol. 61(C), pages 186-198.
    6. Orlov, Anton & Aaheim, Asbjørn, 2017. "Economy-wide effects of international and Russia's climate policies," Energy Economics, Elsevier, vol. 68(C), pages 466-477.
    7. Ge, Jianping & Lei, Yalin, 2018. "Resource tax on rare earths in China: Policy evolution and market responses," Resources Policy, Elsevier, vol. 59(C), pages 291-297.
    8. Orlov, Anton, 2016. "Effects of higher domestic gas prices in Russia on the European gas market: A game theoretical Hotelling model," Applied Energy, Elsevier, vol. 164(C), pages 188-199.
    9. Sun, Xiaohua & Ren, Junlin & Wang, Yun, 2022. "The impact of resource taxation on resource curse: Evidence from Chinese resource tax policy," Resources Policy, Elsevier, vol. 78(C).
    10. Yanhui Yin & Bowen Yang, 2023. "Environmental Protection or Development? Multiple Policy Effects Evaluation of the Resource Tax Collection Reform for Iron Ore Enterprises in China," IJERPH, MDPI, vol. 20(5), pages 1-15, February.
    11. V. A. Volkonskii & A. I. Kuzovkin, 2019. "Prices and Taxes for Oil and Oil Products in the Context of Long-Term Development of Russia," Studies on Russian Economic Development, Springer, vol. 30(3), pages 252-260, May.
    12. Boqiang Lin & Zhijie Jia, 2020. "Supply control vs. demand control: why is resource tax more effective than carbon tax in reducing emissions?," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-13, December.
    13. Song, Yi & Zhang, Yangxueying & Zhang, Yijun, 2022. "Economic and environmental influences of resource tax: Firm-level evidence from China," Resources Policy, Elsevier, vol. 77(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Orlov, Anton, 2015. "An assessment of optimal gas pricing in Russia: A CGE approach," Energy Economics, Elsevier, vol. 49(C), pages 492-506.
    2. Orlov, Anton & Grethe, Harald & McDonald, Scott, 2013. "Carbon taxation in Russia: Prospects for a double dividend and improved energy efficiency," Energy Economics, Elsevier, vol. 37(C), pages 128-140.
    3. Orlov, Anton & Grethe, Harald, 2012. "Carbon taxation and market structure: A CGE analysis for Russia," Energy Policy, Elsevier, vol. 51(C), pages 696-707.
    4. DAUBANES, Julien & LASSERRE, Pierre, 2011. "Optimum Commodity Taxation with a Non-Renewable Resource," Cahiers de recherche 03-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    5. Beckman, Jayson & Hertel, Thomas & Tyner, Wallace, 2011. "Validating energy-oriented CGE models," Energy Economics, Elsevier, vol. 33(5), pages 799-806, September.
    6. Orlov, Anton & Aaheim, Asbjørn, 2017. "Economy-wide effects of international and Russia's climate policies," Energy Economics, Elsevier, vol. 68(C), pages 466-477.
    7. Alan J. Auerbach, 2006. "The Future of Capital Income Taxation," Fiscal Studies, Institute for Fiscal Studies, vol. 27(4), pages 399-420, December.
    8. Börjesson, Maria & Asplund, Disa & Hamilton, Carl, 2021. "Optimal kilometre tax for electric passenger cars," Working Papers 2021:3, Swedish National Road & Transport Research Institute (VTI).
    9. Parry, Ian W.H., 2008. "How should heavy-duty trucks be taxed?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 651-668, March.
    10. Hoefnagels, Ric & Banse, Martin & Dornburg, Veronika & Faaij, André, 2013. "Macro-economic impact of large-scale deployment of biomass resources for energy and materials on a national level—A combined approach for the Netherlands," Energy Policy, Elsevier, vol. 59(C), pages 727-744.
    11. Tim Besley & Rohini Pande, 1998. "Read my lips: the political economy of information transmission," IFS Working Papers W98/13, Institute for Fiscal Studies.
    12. Alberto Gago & Xavier Labandeira & Xiral López Otero, 2014. "A Panorama on Energy Taxes and Green Tax Reforms," Hacienda Pública Española / Review of Public Economics, IEF, vol. 208(1), pages 145-190, March.
    13. Jaume Sempere, 2022. "On potential Pareto gains from free trade areas formation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(6), pages 1502-1518, December.
    14. da Costa, Carlos E. & Pereira, Thiago, 2014. "On the efficiency of equal sacrifice income tax schedules," European Economic Review, Elsevier, vol. 70(C), pages 399-418.
    15. Christian Keuschnigg, 2008. "Corporate Taxation and the Welfare State," Working Papers 0813, Oxford University Centre for Business Taxation.
    16. Juan Pablo Gama & Rodrigo J. Raad, 2023. "Larde public expenditure shocks in a Ramsey taxation model with default," Textos para Discussão Cedeplar-UFMG 665, Cedeplar, Universidade Federal de Minas Gerais.
    17. Richter, Wolfram F., 2009. "Taxing education in Ramsey's tradition," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1254-1260, December.
    18. Takuya Obara & Yoshitomo Ogawa, 2024. "Optimal taxation in an endogenous fertility model with non-cooperative behavior," Review of Economics of the Household, Springer, vol. 22(1), pages 173-197, March.
    19. Monge, Juan J. & Bryant, Henry L. & Gan, Jianbang & Richardson, James W., 2016. "Land use and general equilibrium implications of a forest-based carbon sequestration policy in the United States," Ecological Economics, Elsevier, vol. 127(C), pages 102-120.
    20. Stéphane Gauthier & Guy Laroque, 2019. "Production efficiency and profit taxation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(2), pages 215-223, February.

    More about this item

    Keywords

    Russia; CGE model; Energy resource taxation; Export taxes; Royalty; Gas and oil;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:50:y:2015:i:c:p:251-263. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.