IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v176y2023i12d10.1007_s10584-023-03608-y.html
   My bibliography  Save this article

Policy diffusion and the interdependent fuel taxes

Author

Listed:
  • Muzhou Zhang

    (University of Essex)

Abstract

Fossil fuels remain undertaxed worldwide despite the accelerating threat of climate change. While subscribing to the existing literature on that domestic politics matters, I contend that policy diffusion is yet another mechanism here: risk-averse policy makers carefully follow their counterparts abroad, so incrementalism in taxing fossil fuels is self-perpetuating transnationally. Using data from 29 OECD countries, 1990–2019, various spatial econometric analyses lend support to my argument: the excise tax on gasoline in one country positively correlates to that in other countries, with this interdependence being more pronounced between geographic or linguistic “neighbors” and trade or political partners. Substantively, a gasoline tax cut by one unit in a single country could spread over 60% of its negative effect elsewhere. This Letter concludes with its contribution to the literature, possible avenues for future research, as well as important policy implications.

Suggested Citation

  • Muzhou Zhang, 2023. "Policy diffusion and the interdependent fuel taxes," Climatic Change, Springer, vol. 176(12), pages 1-8, December.
    • Handle: RePEc:spr:climat:v:176:y:2023:i:12:d:10.1007_s10584-023-03608-y
    DOI: 10.1007/s10584-023-03608-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10584-023-03608-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10584-023-03608-y?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. Aseem Prakash & Matthew Potoski, 2006. "Racing to the Bottom? Trade, Environmental Governance, and ISO 14001," American Journal of Political Science, John Wiley & Sons, vol. 50(2), pages 350-364, April.
    2. Bennett, Colin J., 1991. "What Is Policy Convergence and What Causes It?," British Journal of Political Science, Cambridge University Press, vol. 21(2), pages 215-233, April.
    3. McCulloch, Neil & Natalini, Davide & Hossain, Naomi & Justino, Patricia, 2022. "An exploration of the association between fuel subsidies and fuel riots," World Development, Elsevier, vol. 157(C).
    4. Franzese, Robert J. & Hays, Jude C., 2007. "Spatial Econometric Models of Cross-Sectional Interdependence in Political Science Panel and Time-Series-Cross-Section Data," Political Analysis, Cambridge University Press, vol. 15(2), pages 140-164, April.
    5. Walker, Jack L., 1969. "The Diffusion of Innovations among the American States," American Political Science Review, Cambridge University Press, vol. 63(3), pages 880-899, November.
    6. Jonas Meckling & Thomas Sterner & Gernot Wagner, 2017. "Policy sequencing toward decarbonization," Nature Energy, Nature, vol. 2(12), pages 918-922, December.
    7. Swank, Duane, 2006. "Tax Policy in an Era of Internationalization: Explaining the Spread of Neoliberalism," International Organization, Cambridge University Press, vol. 60(4), pages 847-882, October.
    8. Baldwin, Elizabeth & Carley, Sanya & Nicholson-Crotty, Sean, 2019. "Why do countries emulate each others’ policies? A global study of renewable energy policy diffusion," World Development, Elsevier, vol. 120(C), pages 29-45.
    9. Holzinger, Katharina & Knill, Christoph & Sommerer, Thomas, 2008. "Environmental Policy Convergence: The Impact of International Harmonization, Transnational Communication, and Regulatory Competition," International Organization, Cambridge University Press, vol. 62(4), pages 553-587, October.
    10. Skovgaard,Jakob & van Asselt,Harro (ed.), 2018. "The Politics of Fossil Fuel Subsidies and their Reform," Cambridge Books, Cambridge University Press, number 9781108416795, June.
    11. Cheon, Andrew & Urpelainen, Johannes & Lackner, Maureen, 2013. "Why do governments subsidize gasoline consumption? An empirical analysis of global gasoline prices, 2002–2009," Energy Policy, Elsevier, vol. 56(C), pages 382-390.
    12. Ian W.H. Parry & Mr. Simon Black & Nate Vernon-Lin, 2021. "Still Not Getting Energy Prices Right: A Global and Country Update of Fossil Fuel Subsidies," IMF Working Papers 2021/236, International Monetary Fund.
    13. Fabrizio Gilardi & Charles R. Shipan & Bruno Wüest, 2021. "Policy Diffusion: The Issue‐Definition Stage," American Journal of Political Science, John Wiley & Sons, vol. 65(1), pages 21-35, January.
    14. David M. Konisky, 2007. "Regulatory Competition and Environmental Enforcement: Is There a Race to the Bottom?," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 853-872, October.
    15. Bechtel, Michael M. & Genovese, Federica & Scheve, Kenneth F., 2019. "Interests, Norms and Support for the Provision of Global Public Goods: The Case of Climate Co-operation," British Journal of Political Science, Cambridge University Press, vol. 49(4), pages 1333-1355, October.
    16. Pierson, Paul, 2000. "Increasing Returns, Path Dependence, and the Study of Politics," American Political Science Review, Cambridge University Press, vol. 94(2), pages 251-267, June.
    17. Walker, Jack L., 1969. "The Diffusion of Innovations among the American States," American Political Science Review, Cambridge University Press, vol. 63(3), pages 880-899, November.
    Full references (including those not matched with items on IDEAS)

    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. May-Britt Stumbaum, 2015. "The diffusion of norms in security-related fields: views from China, India and the EU," Asia Europe Journal, Springer, vol. 13(3), pages 331-347, September.
    2. Sara Kahn-Nisser, 2017. "Channels of Influence: The EU and Delta Convergence of Core Labour Standards in the Eastern Neighbourhood," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 127-143, January.
    3. Tim Legrand & Diane Stone, 2021. "Governing global policy: what IPE can learn from public policy? [Review article: What is policy convergence and what causes it?]," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 40(4), pages 484-501.
    4. Si-Ying Tan & Araz Taeihagh & Kritika Sha, 2021. "How Transboundary Learning Occurs: Case Study of the ASEAN Smart Cities Network (ASCN)," Sustainability, MDPI, vol. 13(11), pages 1-19, June.
    5. Shiuh-Shen Chien, 2008. "The Isomorphism of Local Development Policy: A Case Study of the Formation and Transformation of National Development Zones in Post-Mao Jiangsu, China," Urban Studies, Urban Studies Journal Limited, vol. 45(2), pages 273-294, February.
    6. Srivastav, Sugandha & Rafaty, Ryan, 2021. "Five Worlds of Political Strategy in the Climate Movement," INET Oxford Working Papers 2021-07, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    7. Fabrizio Gilardi, 2010. "Who Learns from What in Policy Diffusion Processes?," American Journal of Political Science, John Wiley & Sons, vol. 54(3), pages 650-666, July.
    8. Reut Snir & Gilad Ravid, 2016. "Global nanotechnology regulatory governance from a network analysis perspective," Regulation & Governance, John Wiley & Sons, vol. 10(4), pages 314-334, December.
    9. Evan M. Mistur & John Wagner Givens & Daniel C. Matisoff, 2023. "Contagious COVID‐19 policies: Policy diffusion during times of crisis," Review of Policy Research, Policy Studies Organization, vol. 40(1), pages 36-62, January.
    10. James W. Stoutenborough & Matthew Beverlin, 2008. "Encouraging Pollution‐Free Energy: The Diffusion of State Net Metering Policies," Social Science Quarterly, Southwestern Social Science Association, vol. 89(5), pages 1230-1251, December.
    11. Sharon Werning Rivera, 2004. "Elites and the Diffusion of Foreign Models in Russia," Political Studies, Political Studies Association, vol. 52(1), pages 43-62, March.
    12. Zachary Elkins & Beth Simmons, 2005. "On Waves, Clusters, and Diffusion: A Conceptual Framework," The ANNALS of the American Academy of Political and Social Science, , vol. 598(1), pages 33-51, March.
    13. Kern, Kristine & Jörgens, Helge & Jänicke, Martin, 2001. "The diffusion of environmental policy innovations: A contribution to the globalisation of environment policy," Discussion Papers, Research Unit: Standard-setting and Environment FS II 01-302, WZB Berlin Social Science Center.
    14. Arbolino, R. & Boffardi, R. & De Simone, L. & Ioppolo, G. & Lopes, A., 2024. "Circular economy convergence across European Union: Evidence on the role policy diffusion and domestic mechanisms," Socio-Economic Planning Sciences, Elsevier, vol. 96(C).
    15. Timothy Callaghan & Lawrence R. Jacobs, 2014. "Process Learning and the Implementation of Medicaid Reform," Publius: The Journal of Federalism, CSF Associates Inc., vol. 44(4), pages 541-563.
    16. Møller, Karl Magnus, 2024. "Domestic renewable energy industries and national decarbonization policy," Energy Policy, Elsevier, vol. 192(C).
    17. Liu, Leilei & Ba, Zhichao & Pei, Lei, 2024. "How does policy information shape its adoption? A citation analysis of large-scale energy policies in China," Journal of Informetrics, Elsevier, vol. 18(4).
    18. Upham, Paul & Kivimaa, Paula & Virkamäki, Venla, 2013. "Path dependence and technological expectations in transport policy: the case of Finland and the UK," Journal of Transport Geography, Elsevier, vol. 32(C), pages 12-22.
    19. Muzhou Zhang, 2023. "Trade and the government underfunding of environmental innovation," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 13(4), pages 575-586, December.
    20. Katharina Holzinger & Thomas Sommerer, 2011. "‘Race to the Bottom’ or ‘Race to Brussels’? Environmental Competition in Europe," Journal of Common Market Studies, Wiley Blackwell, vol. 49(2), pages 315-339, March.

    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:spr:climat:v:176:y:2023:i:12:d:10.1007_s10584-023-03608-y. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.