Environmental policy tools and evaluation

Working Papers and reports

 

2016 Car Purchase tax: Green tax reform in Israel

This case study of the Israeli tax on motor vehicle purchases has been prepared by Victoria Roshal (independent consultant) and Alfred Tovias (The Hebrew University of Jerusalem). The tax takes into account the vehicles’ emissions of CO2 and several local air pollutants. The case study demonstrates that the tax contributed to limit CO2 emissions from new vehicles while preventing an increase in emissions of local air pollutants that has been observed in countries that only address CO2 emissions in their vehicle taxes.

This Working Paper served as basis for the Environment Policy Paper "Israel's Green Tax on Cars: Lessons in Environmental Policy Reform" listed below.

  Israel's Green Tax on Cars: Lessons in Environmental Policy Reform - Environment Policy Paper No. 5

In recent decades, Israel’s growing population and rising incomes have seen consumption increase substantially, bringing with it considerable pressure on the environment. One of the main environmental pressures is from the ever-increasing transport activity, especially the use of private vehicles. Although travelling in a private vehicle brings benefits to the individual using it, this entails costs to society as a whole. These social costs extend beyond the private costs of the car and the fuel borne by the car user, imposing a burden on public health and the environment.

  Social Costs of Morbidity Impacts of Air Pollution - Environment Working Paper No. 99

Outdoor air pollution is a major determinant of health worldwide. The greatest public health effects are from increased mortality in adults. However, both PM and O3 also cause a wide range of other, less serious, health outcomes; and there are effects on mortality and morbidity of other pollutants also, e.g. nitrogen dioxide (NO2) and sulphur dioxide (SO2). The objective of this paper is to inform the development of improved estimates of the social costs of human morbidity impacts resulting from outdoor air pollution in two components; namely to develop a core set of pollutant-health end-points to be covered when estimating the costs of morbidity, and to review current estimates of the cost of morbidity from air pollution.

2015 Improving the Effectiveness of Environmental Taxation - Israel Policy Brief

Compared to other OECD countries, Israel raises above average revenues from environmentally related taxes as a percentage of GDP. In 2013, revenues from environmentally related taxes amounted to 2.8% of GDP, compared with a weighted OECD average of 1.6%. In particular, taxes on motor vehicles and transport are relatively high in Israel compared to other OECD countries. This is important, because environmentally related taxation is a cost-effective but generally underutilised tool to achieve environmental objectives across countries.

  Monetary Carbon Values in Policy Appraisal: An Overview of Current Practice and Key Issues - Environment Working Paper No. 92

Cost-benefit analyses and other quantitative appraisals are used in many countries to support decision-making in different areas of public policy, including many investment projects in sectors such as transport and energy. These decisions can have significant effects – either negative or positive – on future emissions of carbon dioxide and other greenhouse gases and it is important whether, and how, countries incorporate estimates of the marginal value of changes in carbon dioxide emissions into these analyses. This paper discusses the range of approaches which can be employed to value changes in carbon emissions in policy appraisals, setting out the key issues in the choice of valuation principles, and presents some case studies and a survey of current practice in OECD countries.

 

Competitiveness Impacts of the German Electriciy Tax - Environment Working Paper No. 88 

Proposals to increase environmentally related taxes are often challenged on competitiveness grounds. The concern is that value creation in certain sectors might decline domestically if a country introduces environmentally related taxes unilaterally. This paper provides evidence on the short-term competitiveness impacts of the German electricity tax introduced unilaterally in 1999.

 

Impacts of Carbon Prices on Indicators of Competitiveness - Environment Working Paper No. 87

Concerns around potential losses of competitiveness as a result of unilateral action on carbon pricing are often central for policy makers contemplating the introduction of such instruments. This paper is a review of literature on ex post empirical evaluations of the impacts of carbon prices on indicators of competitiveness as employed in the literature, including employment, output or exports, at different levels of aggregation.

2014 Tax Preferences for Environmental Goals: Use, Limitations and Preferred Practices - Environment Working Paper No. 71

This paper reviews the use of tax preferences to achieve environmental policy objectives. Tax preferences involve using the tax system to adjust relative prices with a view to influencing producer or consumer behaviour in favour of goods or services that are considered to be environmentally beneficial. They take various forms, typically a partial or total exemption from a specified tax. Because tax preferences help to avoid or reduce costs for businesses or consumers, there are often pressures on governments to favour them over other instruments.

 

Environmental & related social costs of the tax treatment of company cars and commuting expenses - Environment Working Paper No. 70

This paper builds upon a recent OECD paper on the personal tax treatment of company cars and commuting expenses in OECD member-countries and aims to arrive at a better understanding of the environmental and related social costs of the tax treatment described therein. The paper begins with an analysis of the larger transport market, which is the primary storehouse of evidence on the nature and extent of the environmental impacts of the various transport modes, the relative importance of the proximate and underlying determinants of these impacts, and the elasticities and functional relationships at work.

 

The diesel differential: Differences in the tax treatment of gasoline and diesel for road use - Taxation Working Paper No. 21

Diesel and gasoline account for around 95% of energy used for road transport in the OECD and for the largest share of revenue from taxes on energy. In 33 out of 34 OECD countries, diesel fuel is taxed at lower rates than gasoline both in terms of energy and carbon content. To assess whether this difference is warranted from an environmental perspective, this paper examines the rationales for taxing both fuels, considering the externalities (including local air pollution, carbon emissions and other social costs related to road transport) associated with the use of each fuel and the fuel efficiency advantage of diesel vehicles.
 

Personal tax treatment of company cars and commuting expenses: Estimating the fiscal and environmental costs - Taxation Working Paper No. 20

This paper outlines the tax treatment of company cars and commuting expenses in 27 OECD countries and one partner country and compares these tax settings with a stylised "benchmark" tax treatment that estimates the full value of the benefit received by employees with company vehicles. The paper demonstrates that the estimated tax expenditures associated with company car taxation in these countries in 2012 can be quite considerable.
 

The political economy of the increase in Turkish taxes on motor vehicle fuels

Motor fuel taxes have risen significantly in Turkey over the last decade, primarily for fiscal reasons. This paper provides a case study on the political economy issues related to this increase. It indicates that any increase in fuel taxes (and therefore in transportation costs) impacts much more heavily on the rich than on other income groups. The findings also imply that since fuel costs account for a minute fraction of total input cost in most Turkish sectors, fuel taxes do not cause significant reductions in the competitiveness of any sector.

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