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Rent Taxation for Nonrenewable Resources

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  • Lund, Diderik

    () (Dept. of Economics, University of Oslo)

Abstract

The literature on taxation of rents from nonrenewable resources uses different theoretical assumptions and methods and a variety of empirical observations to arrive at widely diverging conclusions. Many studies use models and methods which disregard uncertainty, investigating distortionary effects of different taxes on whether, when, and how to explore for, develop and operate resource deposits. Introducing uncertainty into the analysis opens a range of challenges, and leads to results which cast doubt upon the relevance of studies which neglect uncertainty. There are, however, several ways to analyze uncertainty, regarding companies' behavior, resource price processes, and diversification opportunities, all with different implications for taxation. Methods developed in financial economics since the 1980's are promising, but still not in widespread use. Some more specific topics covered in this review are optimal risk sharing between companies and gov- ernments, time consistency and scal stability, the relationship between taxes and discount rates, and transfer pricing.

Suggested Citation

  • Lund, Diderik, 2009. "Rent Taxation for Nonrenewable Resources," Memorandum 01/2009, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2009_001
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    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2009/Memo-01-2009.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dobra, John & Dobra, Matt, 2013. "State mineral production taxes and mining law reform," Resources Policy, Elsevier, vol. 38(2), pages 162-168.
    2. repec:eee:eneeco:v:66:y:2017:i:c:p:349-359 is not listed on IDEAS
    3. Söderholm, Patrik & Svahn, Nanna, 2015. "Mining, regional development and benefit-sharing in developed countries," Resources Policy, Elsevier, vol. 45(C), pages 78-91.
    4. Céline DE QUATREBARBES & Bertrand LAPORTE, 2015. "What do we know about the mineral resource rent sharing in Africa?," Working Papers 201509, CERDI.
    5. Malafeh, Sam & Sharp, Basil, 2015. "Role of royalties in sustainable geothermal energy development," Energy Policy, Elsevier, vol. 85(C), pages 235-242.
    6. Niko Jaakkola & Daniel Spiro, 2016. "Finders, Keepers?," Working Papers id:11118, eSocialSciences.
    7. Laporte, Bertrand & de Quatrebarbes, Céline, 2015. "What do we know about the sharing of mineral resource rent in Africa?," Resources Policy, Elsevier, vol. 46(P2), pages 239-249.
    8. Lund, Diderik, 2009. "Marginal versus Average Beta of Equity under Corporate Taxation," Memorandum 12/2009, Oslo University, Department of Economics.
    9. Smith, James L., 2013. "Issues in extractive resource taxation: A review of research methods and models," Resources Policy, Elsevier, vol. 38(3), pages 320-331.
    10. Frestad, Dennis, 2010. "Corporate hedging under a resource rent tax regime," Energy Economics, Elsevier, vol. 32(2), pages 458-468, March.
    11. Smith, James L., 2014. "A parsimonious model of tax avoidance and distortions in petroleum exploration and development," Energy Economics, Elsevier, vol. 43(C), pages 140-157.
    12. Lund, Diderik, 2018. "Increasing resource rent taxation when the corporate income tax is reduced?," Memorandum 3/2018, Oslo University, Department of Economics.

    More about this item

    Keywords

    Natural resources; rent tax; royalty; oil; minerals; energy;

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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