Information about Western Hemisphere Hemisferio Occidental
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Chapter 6. The Right Energy Taxes and Their Impacts

Author(s):
Ian Parry, Dirk Heine, Eliza Lis, and Shanjun Li
Published Date:
July 2014
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Information about Western Hemisphere Hemisferio Occidental
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This chapter summarizes the corrective tax estimates for coal, natural gas, and motor fuels based on the assumptions discussed in previous chapters, both for selected countries and, using ranges of values in heat maps, for all countries, and then discusses the fiscal, health, and environmental impacts of tax reform. Various tables in Annex 6.2 provide full details of this information, country by country, including estimates of current fuel taxes or subsidies.

Corrective Tax Estimates

Coal

Figure 6.1 illustrates the corrective taxes (taxes that reflect environmental damage) on coal use by power plants from a representative sample of countries with different income levels, geographical locations, and energy mixes. The figure shows the tax on coal necessary to correct for carbon emissions (based on the illustrative damage value of $35/ton of carbon dioxide [CO2]) and the additional taxation needed to reflect local pollution damage, based on the average emission rates at existing plants. Current taxes as shown in the figure, obtained from Clements and others (2013),1 are approximately zero. To put the corrective tax estimates in perspective, the world average coal price in 2010 was about $5 per gigajoule (GJ).2

Figure 6.1Corrective Coal Tax Estimates, Selected Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 4.

Note: The dark gray bar is the corrective charge for local pollution based on emission rates averaged across existing plants (some of which have control technologies and some of which do not). A current tax data point to the left of the y-axis indicates a subsidy. Data on Korea’s coal tax were not available from the sources used in this book.

A number of noteworthy points can be made from Figure 6.1. The carbon component of the corrective tax is substantial, equivalent to about $3.3/GJ, or about 66 percent of the average world coal price in 2010. The corrective tax for carbon varies little across countries because there is little variation in carbon emissions/GJ of coal, and the illustrated CO2 damage value is applied to all countries.

More striking, however, is that the local pollution charge is often larger than the carbon charge, though it varies considerably across countries. The local pollution charge exceeds the carbon charge for 10 countries shown in the figure and is more than double the carbon charge in 6 of those countries. For example, in the United States local pollution damage contributes $5.5/GJ to the corrective tax, or 62 percent of the total corrective coal tax of $8.7/GJ. For China, the corrective charge for local pollution is $11.7/GJ; in fact, premature deaths per ton of coal burned in China are about nine times those for the United States (due to a combination of higher average emission rates and higher population exposure), though a partially offsetting factor is that, because of lower per capita income, the value of mortality risk is assumed to be lower in China (see Figure 4.2).

Corrective taxes for local pollution are not always large. For example, in Australia the corrective charge is $0.8/GJ, which in part reflects relatively low population exposure to the pollution (much of which disperses over the ocean).

Figure 6.2 underscores the potentially strong incentives for plants to adopt emission control technologies when faced with high air pollution charges on coal with appropriate crediting for the use of control technologies. It shows the corrective air pollution charges for existing plants with emissions control technologies and those for plants with no controls. (The average emissions levels underlying the corrective charges in Figure 6.1 are based on intermediate emission rates.) Taxes are reduced by 75 percent or more by adopting control technologies in all cases. However, even if the emissions control technologies currently used by some plants in a country were applied to all plants, corrective taxes for air pollution could still be significant—the taxes would be greater than the carbon charge for seven of the countries shown in Figure 6.1.3

Figure 6.2Corrective Taxes for Air Pollution at Coal Plants with and without Control Technologies, Selected Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 4.

Note: The sum of the light and dark gray bars is the appropriate coal tax for local air emissions for plants with no emissions controls. The light gray bar is the tax that would be paid for a representative plant with control technologies receiving an appropriate credit for the emissions mitigation.

Figure 6.3 shows the breakdown of air pollution damage from coal plants with no controls by type of emissions. For most countries, SO2 is the most damaging pollutant (its share in total pollution damage varies across countries from 27 percent to 71 percent), followed by primary fine particulate emissions (PM2.5), though in some countries (Australia, Brazil, India, Japan, and Korea) primary particulates from uncontrolled plants would cause the most damage (their share in total pollution damage varies from 16 percent to 66 percent). Nitrogen oxide emissions are responsible for a relatively minor share of damage (2–16 percent) because their emission rates are smaller than for SO2, and they are less prone to reacting in the atmosphere to form the fine particulates that give rise to major health risks.

Figure 6.3Breakdown of Air Pollution Damages from Coal by Emissions Type, Selected Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 4.

Figure 6.4 shows a heat map of corrective coal tax estimates, based on average or current emission rates, for all countries that use coal. The relative cross-country pattern of corrective taxes looks broadly similar to that for sulfur damage presented in Chapter 4 (though Figure 6.3 also reflects other local pollutants, carbon damage, and the emissions intensity of locally used coal). Corrective taxes tend to be high in Europe (where population exposure and per capita income are relatively high) and lowest in the limited number of African countries that use coal and for which data are available, with countries in North and South America, Asia, and Oceania generally in between.

Figure 6.4Corrective Coal Tax Estimates, All Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 4.

Figure 6.5 reproduces the corrective coal tax estimates for selected countries from Figure 6.1, but uses the same mortality value (that for the average Organization for Economic Cooperation and Development [OECD] country) in all cases, given the controversy about applying different values to different countries. Not surprisingly, the main effect is to substantially scale up the corrective tax estimates for countries with per capita incomes well below the OECD average. For example, China’s corrective tax for air pollution increases from $11.7/GJ to $38.7/GJ. Dramatic differences in corrective taxes across countries still remain, however, reflecting large differences in population exposure and emission rates.

Figure 6.5Coal Tax Estimates with Uniform Mortality Values, Selected Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 4.

Note: This figure adjusts the corrective tax estimates for air pollution from Figure 6.1 by setting mortality values for all countries equal to the average value for Organization for Economic Cooperation and Development countries.

Natural Gas

Figure 6.6 shows taxes for natural gas to correct for carbon and air pollution damage at the average power plant. Current taxes are about zero in many cases, though natural gas is subsidized in some countries, especially in Egypt ($1.4/GJ) and India ($1.0/GJ). For perspective, the world average price for pipeline natural gas in 2010 was about $5/GJ.

Figure 6.6Corrective Natural Gas Tax Estimates for Power Plants, Selected Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 4.

Note: Data on Korea’s natural gas tax were not available from the sources used in this book. A current tax data point to the left of the y-axis indicates a subsidy.

Figures 6.6 and 6.1 illustrate the significant differences between coal and natural gas. First, the carbon charge is much lower for natural gas, about $1.9/GJ or about 55 percent of that for coal. This lower charge reflects the lower carbon emission rate per GJ of energy for natural gas.

Second, local pollution damage is also much lower. For all but one country (Korea) the corrective tax for local air pollution is less than the carbon charge, and often very much smaller: in 7 of the 20 countries shown the corrective tax for local pollution is less than 10 percent of that for carbon. Gas combustion generates minimal amounts of SO2 and PM2.5—the two largest sources of air pollution damage for coal. Moreover, the nitrogen oxide emission rates per GJ for natural gas are less than half of those for coal.

Although less dramatic than for coal, there is still significant undercharging for natural gas, with currently estimated taxes for the countries shown in Figure 6.6 either about zero or negative, compared with corrective charges of about 40 percent or more of the world price.

Figure 6.7 shows corrective tax estimates for natural gas used at power plants across all countries. The differences across countries are far less pronounced than for coal given that local pollution damage is much smaller for natural gas relative to coal.

Figure 6.7Corrective Natural Gas Tax Estimates for Power Plants, All Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 4.

The corrective taxes for natural gas combusted at ground level, such as for home heating, are similar to those for power plant use of natural gas and, again, the charge for local air pollution is less important (see Annex 6.1). Given the dominance of the carbon charge in each case, there does not appear to be a strong case, on pollution grounds, for differentiating natural gas taxes by end user.

Motor Fuels

Figure 6.8 shows estimates of corrective gasoline taxes for selected countries expressed in 2010 US$/liter,4 and the contribution of carbon, local pollution, traffic accidents, and congestion to the corrective tax. The corrective tax refers to the excise tax before application of any value-added or sales taxes. Current estimated excise taxes vary considerably, from subsidies of US$0.30/liter in Egypt to taxes of US$0.60/liter or more in Brazil, Germany, Israel, Japan, Korea, Poland, Turkey, and the United Kingdom. For perspective, the world pretax price of gasoline averaged about US$0.80/liter in 2010, equivalent to $23/GJ.

Figure 6.8Corrective Gasoline Tax Estimates, Selected Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 5.

Note: To express taxes in dollars per gallon, multiply by 3.8.

The carbon component of the corrective gasoline tax, based on the damage assumption of $35/ton, is US$0.08/liter across all countries, or $2.4/GJ, a little higher than for natural gas, although for gasoline the carbon charge is a smaller portion (about 10 percent) of the world price.

As with natural gas the local pollution component is usually smaller than the carbon charge, and mainly for the same reason: gasoline produces only very small amounts of the most damaging pollutants—SO2 and PM2.5. Carbon and local pollution together point to corrective gasoline taxes of, at most, US$0.20/liter for the illustrated countries.

However, much heavier taxation of gasoline is warranted by other factors, taxes higher than currently imposed in most cases, because of the combination of traffic congestion and traffic accidents. Traffic congestion tends to be the largest component of the corrective tax in developed countries, in part because of higher values from lost time, and traffic accidents are the largest component in developing countries (where, for example, pedestrians are more prone to injury risk). These additional costs raise corrective gasoline taxes in Figure 6.8 to between about US$0.40 and US$0.60/liter in Australia, Brazil, Chile, China, Egypt, Germany, Israel, Kazakhstan, Poland, Thailand, and the United States and to about US$0.80/liter (or 100 percent of the pretax world price) or more in India, Japan, Korea, South Africa, and Turkey. The corrective tax estimates exceed current taxes for 15 of the countries in Figure 6.7, and fall short of them for five countries.5

Figure 6.9 underscores the heavy taxation of gasoline warranted worldwide. For the majority of countries for which data are available, corrective taxes are at least US$0.40/liter (50 percent of the pretax world price) and frequently much higher. Broadly speaking, the gasoline tax rates currently applicable in most OECD countries, about US$0.40 to $1/liter, appear to be in the right ballpark for countries worldwide (at least until distance-based charging becomes widespread).

Figure 6.9Corrective Gasoline Tax Estimates, All Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 5.

Turning to diesel fuel, the corrective excise tax estimates for selected countries in Figure 6.10, averaged for diesel use by cars and trucks, follow a pattern broadly similar to those for gasoline taxes in Figure 6.7. Most estimates are between about US$0.40 and US$0.80/liter, though corrective taxes for Japan, Korea, and Turkey are much higher. For 15 countries, corrective diesel fuel taxes are somewhat higher than corrective gasoline taxes, suggesting that, if anything, diesel should be taxed more heavily than gasoline. Many governments, however, tax diesel at a lower rate than gasoline (10 of the countries shown in Figure 6.10 and 28 of 34 OECD countries shown in Figure 2.14). Corrective taxes for diesel exceed current taxes in all but two countries (Israel and the United Kingdom) in Figure 6.10.

Figure 6.10Corrective Diesel Tax Estimates, Selected Countries, 2010

Source: Authors’ calculations based on methodology in Chapter 5.

Note: To express taxes in dollars per gallon, multiply by 3.8. Data on Korea’s diesel tax were not available from the sources used in this book.

The generally higher corrective taxes for diesel fuel compared with gasoline reflect its higher emission rates (both for carbon and, especially, local pollution); that most diesel is used by trucks, which add more to congestion per vehicle-kilometer than cars; and that trucks cause more road damage. However, road damage is relatively modest—less than the local pollution component in all cases. And a partially offsetting factor is that trucks have much lower fuel efficiency than cars, which means that a liter reduction in diesel fuel consumption results in a much smaller reduction in vehicle-kilometers driven (implying smaller congestion and accident benefits) compared with a liter reduction in car-kilometers driven.

In fact, if it were administratively feasible to do so, a case could be made for taxing diesel fuel used by cars at a higher rate than that used by trucks—the corrective tax for car diesel is higher than for truck diesel (these results are not shown in the figures), though the differences tend to be fairly modest.

Impacts

The findings in this chapter provide a useful marker for policymakers interested in heading toward the efficient system of fuel taxes needed to balance environmental and economic concerns. Obviously, however, the fiscal, health, and environmental impacts of tax reforms are of great interest in themselves—particularly for helping policymakers prioritize among different reform options. These impacts will vary considerably across countries depending, for example, on each country’s prevailing fuel mix and fiscal and other policies currently affecting energy and transportation systems.6

Tax reform options are now compared based on “back-of-the-envelope” calculations described in Annex 6.1. This comparison involves estimating the change in fuel prices that would result from implementing corrective taxes (relative to current taxes, which are often zero and sometimes negative, and assuming full pass-through into consumer prices). The price changes are combined with an assumption, based loosely on the limited evidence available, that each 1 percent increase in a fuel price eventually reduces use of that fuel by 0.5 percent (through, for example, adoption of fuel-saving technologies and reduced use of energy-consuming products). The fiscal, health, and CO2 impacts of these fuel and tax changes are then calculated. In addition, for coal it is assumed—based on a comparison indicating the fiscal incentives provided by corrective taxes for adopting emissions control technologies are large relative to the costs of technology adoption—that implementing the corrective tax with appropriate crediting for mitigation during fuel combustion would lead to the adoption of control technologies at all coal plants that remain in operation.

These calculations leave aside a wide range of country-specific details, such as factors that might affect the price responsiveness of carbon-intensive fuels and the environmental and the fiscal implications of switching among fuels, but they are still useful in giving a broad sense of potential effects. Fiscal impacts are, however, overstated to the extent that compensation schemes, such as for low-income households, need to accompany tax reform.7

Fiscal Impacts

Despite the uncertainties surrounding these projections, a potentially large fiscal dividend from reforming fuel taxes clearly exists. The estimated dividend in Figure 6.11 is about 1 percent of GDP or more in all but two countries, and more than 3 percent in 8 countries, and 7.5 percent in China (which has a coal-intensive energy sector).8 Even in Germany and the United Kingdom, where motor fuel taxes are relatively high, implementing corrective taxes on coal and natural gas results in estimated revenues of close to 1 percent of GDP. At a global level, revenue gains amount to 2.6 percent of world GDP9. These calculations do not take into account changes in value-added or similar taxes paid at the household level, though this additional revenue is relatively minor.

Figure 6.11Potential Revenue from Corrective Fuel Taxes, Selected Countries, 2010

Source: See Annex 6.1.

Note: Figure shows revenue, expressed as a percentage of GDP, from corrective fuel taxes (allowing for behavioral responses to the tax) relative to current fuel tax revenues (which are often zero, and negative in cases where fuels are currently subsidized). In the few countries for which corrective taxes fall short of current taxes, the revenue potential is taken as zero.

The composition of potential revenue also differs markedly across countries. For example, the corrective tax on coal is the dominant source of potential revenue in China, Germany, India, Israel, Kazakhstan, Poland, South Africa, and Turkey, while higher motor fuel taxes are the dominant source of potential revenue in Brazil, Chile, Egypt, Indonesia, Japan, Mexico, Nigeria, and the United States. Corrective taxes for natural gas also produce significant revenues in some cases (about 0.3 percent or more of GDP in 10 of the countries).

Health Impacts

Fuel tax reform can also dramatically reduce premature deaths from local air pollution, especially in countries that use large amounts of coal. Pollution-related deaths are reduced by more than half in nine of the countries shown in Figure 6.12. Reductions in emissions from coal combustion from the adoption of emissions control technologies and reduced use of coal are by far the main source of mortality reductions in most cases. At a global level, implementing corrective taxes reduces air pollution deaths by 63 percent.

Figure 6.12Reduction in Pollution-Related Deaths from Corrective Fuel Taxes, Selected Countries, 2010

Source: See Annex 6.1.

Note: Figure shows percent reduction in premature deaths attributed to outdoor fossil fuel air pollution from implementing corrective fuel taxes relative to the current situation. In the few countries for which fossil-fuel corrective taxes fall short of current taxes, the tax is held fixed (so there are no reductions in deaths).

Climate Impacts

Figure 6.13 illustrates another important benefit of fuel tax reform distinct from the health benefits of better local air quality: potentially large reductions in energy-related CO2 emissions, expressed as annual percentage reductions in nationwide emissions for 2010. These reductions exceed 15 percent in all but two cases, and the greatest reduction in emissions is 34 percent in China.10 At a global level, CO2 reductions would amount to 23 percent.

Figure 6.13Reduction in Energy-Related CO2 Emissions from Corrective Fuel Taxes, Selected Countries, 2010

Source: See Annex 6.1.

Note: Figure shows reduction in nationwide energy-related CO2 emissions (relative to 2010 levels) from implementing corrective fuel taxes relative to the current situation. In the few countries in which corrective taxes fall short of current taxes, the tax is held fixed (so there are no emission reductions).

For all but five countries shown in Figure 6.13, coal—because of its high carbon intensity and the especially large increase in coal prices resulting from the corrective tax—accounts for 50 percent or more of the calculated total emissions reductions, and more than 85 percent of the reductions in China, India, Poland, and South Africa. In most countries, however, significant carbon reductions also occur from implementing corrective taxes on natural gas and motor fuels.

Summary

Tax reforms can yield large fiscal dividends (2.6 percent of GDP worldwide), even in countries with high motor fuel taxes; significant reductions in global CO2 emissions (23 percent); and especially from coal taxes, dramatic reductions in pollution-related deaths (63 percent).

Coal use in particular is highly and pervasively undercharged, not only for carbon emissions but also for the health costs of air pollution, though appropriate charges for pollution differ considerably across countries. Heavy taxes on motor fuels are warranted in most developed and developing countries alike, but more to reflect the costs of traffic congestion and accidents rather than carbon emissions and pollution. For countries where motor fuel taxes are already high, the main opportunity for reform is to begin a progressive transition to kilometer-based charges to better manage congestion in particular. Although corrective charges for natural gas are small relative to those for coal (because of limited air pollution benefits), these charges can still generate significant revenue and CO2 reductions. In short, much of the gains from energy price reform are in countries’ own national interests.

Annex 6.1. Additional Data and Assumptions Used to Estimate the Impacts of Fuel Tax Reform

Several additional pieces of information are needed to provide first-pass calculations of the impacts of fuel tax reform.

First, fuel prices faced by fuel users, primarily households and power plants, are needed by country, and are taken for 2010 from an IMF database compiled from multiple sources (see Clements and others, 2013, pp. 143–44).11

Second, the baseline quantities of the four fuels used in each country in 2010 are mostly taken from the database in Clements and others (2013), which was compiled from OECD and International Energy Agency (IEA) data. Diesel used by road vehicles was taken directly from IEA data. Fuel use reflects consumption by both households and firms—diesel fuel corresponds to that used by motor vehicles and natural gas to that used by power plants and other industrial sources as well as residential uses.

Third, the following, commonly used functional form is used to compute changes in fuel demand in response to changes in fuel prices:

In equation (6.1)Q and p denote, respectively, quantities and prices of a particular fuel, and subscripts 0 and 1 denote initial (current) values and values after adjusting the fuel tax rate to its corrective level. η denotes fuel price elasticity, or the percent change in fuel use per 1 percent increase in fuel price. Changes in fuel taxes are assumed to be fully reflected in the price paid by fuel users.12

The calculations simply assume that η = −0.5 for all fuels in all countries (i.e., each 1 percent increase in fuel price reduces fuel use by 0.5 percent). Numerous studies have estimated gasoline price elasticities for different countries, and the value assumed here roughly reflects a central value from the literature.13 This assumption may, on average, overstate the price responsiveness of coal and natural gas somewhat (US EIA, 2012). If so, the fiscal impacts of the fuel tax reforms will be moderately understated, and the CO2 and health impacts will be moderately overstated. It is difficult to make generalizations, however; for example, in countries with ample potential for renewables and nuclear fuels, coal and natural gas may have relatively large responsiveness, and the reverse in countries with little potential for these fuels. Also notable is that, to keep the calculations manageable, the fuel demand function in equation (6.1) is independent of other fuel prices. This lack of interaction will tend to overstate the impacts of full tax reform on fuel demand if fuels are substitutes (e.g., coal and natural gas in power generation, gasoline and diesel in passenger vehicles). In this regard, the revenue effects are moderately understated and the CO2 and health effects overstated.

The fourth piece of information is current excise tax (or subsidy) rates. These rates are obtained from the database in Clements and others (2013), which also includes an estimate of fuel supply prices, based on a reference international fuel price (adjusted for transportation and distribution costs), applying to different regions. The excise tax (or subsidy) is the difference between the user price and the producer price, after netting out any applicable value-added taxes.

Changes in fuel use are calculated using equation (6.1); the difference between the new price and the initial fuel price is the difference between the corrective tax level and any existing excise tax (which is often zero, and sometimes negative, in which case the price increase exceeds the corrective tax).14 Revenue from the corrective tax is simply the product of the excise tax and fuel use with this tax (Q1). The change in revenue is this amount less the product of the initial tax and initial fuel use (Q0). The revenue change exceeds revenue from the corrective tax if fuel is initially subsidized.

To calculate health effects, the corrective tax is assumed to provide incentives for all coal and natural gas plants to adopt emissions control technologies, in which case the relevant emissions factor is the one for representative plants in each country that already apply such technologies. This seems plausible, based on a quick comparison of the costs of installing and operating emissions control technologies, and the resulting tax credit that would ideally be provided if taxes were set at their corrective levels.15 Mortality reductions are calculated by fuel use at the corrective tax times the weighted sum of SO2, PM2.5, and NOx, where the weights are deaths per ton for these emissions, less initial fuel use, times the corresponding weighted sum of emissions. For the first product, controlled emissions factors are used. For the second, a weighted average of controlled and uncontrolled emissions factors is used.

Finally, CO2 emissions reductions are computed based on the tax-induced fuel reductions and the fixed carbon emissions factors for the fuels.16

Annex 6.2. Corrective Estimates, Their Impacts, and Current Taxes, by Country

The following tables summarize, country by country, the results related to corrective fuel taxes presented in the main text of this chapter. In particular Tables 6.2.1, 6.2.2, 6.2.3, and 6.2.4 provide, respectively, the estimated corrective taxes on coal, natural gas, gasoline, and motor diesel; the fiscal impacts of tax reform (revenue gains as a percentage of GDP); the percentage reduction in premature deaths and percentage reductions in CO2 emissions from tax reform; and current excise taxes on fuel products.

Annex Table 6.2.1Corrective Fuel Tax Estimates, All Countries, 2010
CoalNatural gasGasolineDiesel
$ per GJ$ per GJ$ per liter
Countryaverage all

plants
plants with

controls
average all

plants
ground

level
North America
Canada4.94.12.22.10.550.64
Mexico3.93.62.02.10.310.40
United States8.75.43.12.30.430.57
Central and South America
Argentina9.73.82.12.0#na#na
Barbados#na#na3.2#na#na#na
Boliva#na#na2.01.90.300.29
Brazil4.43.62.02.00.390.45
Chile4.13.62.02.00.560.68
Colombia4.83.52.12.00.720.72
Costa Rica#na#na#na2.00.510.49
Cuba#na#na2.32.0#na#na
Dominican Republic5.73.7#na2.00.930.76
Ecuador#na#na2.01.90.350.35
El Salvador#na#na#na1.90.550.42
Guatemala4.03.4#na1.9#na#na
Honduras#na#na#na2.00.41#na
Jamaica#na#na#na2.00.360.35
Nicaragua#na#na2.0#na0.390.36
Panama4.63.5#na2.00.470.48
Paraguay#na#na#na1.90.560.48
Peru3.63.32.02.00.600.50
St. Vincent and the#na#na#na#na#na0.16
Grenadines
Suriname#na#na#na1.90.220.38
Trinidad and Tobago#na#na2.1#na#na#na
Uruguay#na#na2.22.00.650.54
Venezuela#na#na2.12.00.480.57
Europe
Albania#na#na#na#na0.530.53
Austria6.46.42.92.10.560.75
Belgium20.420.43.02.10.800.90
Bosnia and#na#na#na2.00.370.47
Herzegovina
Bulgaria57.09.7#na2.00.510.61
Croatia36.111.04.62.10.460.66
Cyprus#na#na#na2.00.420.45
Czech Republic18.618.63.22.10.530.69
Denmark5.05.02.72.01.281.44
Finland6.05.72.72.10.630.86
France11.111.13.02.20.730.95
Germany9.39.13.12.10.580.82
Greece18.812.42.42.00.590.74
Hungary25.515.53.72.10.460.54
Iceland#na#na#na#na0.520.69
Ireland6.95.12.32.00.610.72
Italy5.85.82.62.10.530.75
Luxembourg#na#na3.7#na0.860.91
Macedonia, FYR35.37.94.12.0#na#na
Malta#na#na#na#na0.470.58
Montenegro34.26.5#na2.0#na#na
Netherlands6.66.63.02.10.700.89
Norway#na#na2.32.21.041.52
Poland15.612.63.32.10.550.59
Portugal6.95.32.32.00.520.64
Romania39.212.83.92.00.590.63
Serbia38.58.73.72.00.410.53
Slovak Republic12.311.63.02.00.470.54
Slovenia17.615.53.72.10.370.45
Spain11.27.82.42.20.650.90
Sweden5.15.12.42.10.630.85
Switzerland#na#na3.52.10.941.13
Turkey12.55.42.32.01.111.20
United Kingdom14.712.73.02.10.600.77
Eurasia
Armenia#na#na2.32.00.300.20
Azerbaijan#na#na2.52.00.640.69
Belarus#na#na4.12.10.461.00
Estonia#na#na2.72.00.240.37
Georgia#na#na2.32.00.430.47
Kazakhstan6.43.82.32.00.570.61
Kyrgyzstan5.53.6#na1.90.310.26
Latvia13.710.33.62.10.440.71
Lithuania#na#na2.82.10.630.82
Russia15.011.13.82.41.052.06
Tajikistan#na#na#na1.90.63#na
Turkmenistan#na#na2.32.0#na#na
Ukraine32.910.13.62.00.390.50
Uzbekistan6.34.12.11.9#na#na
Middle East
Bahrain#na#na2.32.00.310.36
Iran#na#na2.22.00.600.59
Iraq#na#na2.01.9#na#na
Israel22.09.22.7#na0.510.74
Jordan#na#na2.02.00.340.31
Kuwait#na#na#na2.10.670.89
Lebanon#na#na2.22.0#na#na
Oman#na#na2.32.00.540.50
Qatar#na#na2.82.0#na#na
Saudi Arabia#na#na2.22.00.520.54
Syria#na#na2.12.00.730.63
United Arab Emirates#na#na2.22.0#na#na
Africa
Algeria#na#na2.12.0#na#na
Angola#na#na2.02.0#na#na
Benin#na#na#na1.90.170.16
Botswana4.13.42.0#na0.560.40
Burkina Faso#na#na#na1.90.120.13
Burundi#na#na#na1.90.130.13
Cabo Verde#na#na#na#na0.830.51
Cameroon#na#na2.01.90.150.17
Central African#na#na#na1.90.820.49
Republic
Comoros#na#na#na#na0.150.14
Congo, Rep. of#na#na1.91.90.13#na
Côte d’Ivoire#na#na1.91.90.410.29
Egypt#na#na2.12.00.380.35
Ethiopia#na#na#na1.90.410.27
Gambia, The#na#na#na1.90.140.14
Ghana#na#na1.9#na0.280.23
Guinea-Bissau#na#na#na1.90.460.31
Kenya#na#na1.9#na0.450.33
Liberia#na#na#na1.90.690.43
Libya#na#na2.12.0#na#na
Madagascar#na#na#na1.90.210.18
Malawi#na#na1.91.90.470.31
Mali#na#na#na1.90.380.26
Mauritius3.63.3#na#na0.570.37
Morocco4.53.52.02.00.640.47
Mozambique#na#na#na1.90.440.29
Namibia3.53.4#na1.9#na#na
Niger#na#na#na1.90.250.19
Nigeria#na#na2.01.90.220.22
Rwanda#na#na#na1.90.310.23
Sāo Tomé and#na#na#na#na0.240.19
Príncipe
Senegal3.43.4#na1.90.180.18
Seychelles#na#na#na#na0.520.34
Sierra Leone#na#na#na1.90.160.14
South Africa4.63.62.0#na0.800.65
Sudan and South#na#na1.91.90.110.13
Suda
Swaziland#na#na#na#na0.480.32
Tanzania#na#na1.91.90.510.33
Togo#na#na1.9#na0.200.17
Tunisia#na#na2.12.00.610.44
Uganda#na#na#na1.90.510.33
Zambia#na#na#na1.90.700.42
Zimbabwe3.33.3#na1.90.220.20
Asia and Oceania
Afghanistan#na#na2.01.90.170.17
Australia4.13.92.02.10.550.73
Bangladesh8.34.22.32.00.450.43
Bhutan#na#na#na#na0.960.58
Brunei#na#na3.9#na0.290.25
Cambodia#na#na#na#na0.730.52
China15.09.23.22.50.550.51
Fiji#na#na#na#na0.580.40
Hong Kong SAR16.517.74.7#na#na#na
India8.78.72.22.00.780.54
Indonesia5.74.02.32.00.320.42
Japan5.55.13.12.51.131.44
Kiribati#na#na#na#na0.180.17
Korea, Rep. of8.17.74.12.30.981.20
Malaysia5.34.72.32.00.550.58
Maldives#na#na#na#na0.580.52
Mongolia7.44.5#na#na0.480.54
New Zealand4.13.72.02.00.440.55
Pakistan7.34.52.32.00.310.29
Papua New Guinea#na#na#na#na0.340.26
Philippines5.94.12.1#na0.250.32
Samoa#na#na#na#na0.200.17
Singapore#na#na2.92.91.292.18
Sri Lanka5.73.7#na#na0.630.42
Taiwan Province of6.06.34.4#na#na#na
China
Thailand12.75.62.3#na0.420.39
Vietnam5.53.82.1#na0.460.43
Source: See Chapters 3 and 4.Note: The table shows estimates of corrective taxes for coal and natural gas, reflecting combined damages from carbon and local pollution emissions; and motor fuels, reflecting combined damages from carbon and local pollution emissions, congestion, accidents, and, for diesel, road damage (from trucks). For coal, corrective taxes are shown averaged across all plants and across only plants with control technologies (when the two are the same, either all plants have control technologies or none do). Corrective motor fuel taxes are not reported when two or more components of the corrective tax cannot be estimated. Bold #na = data not available; black #na = fuel not used.
Source: See Chapters 3 and 4.Note: The table shows estimates of corrective taxes for coal and natural gas, reflecting combined damages from carbon and local pollution emissions; and motor fuels, reflecting combined damages from carbon and local pollution emissions, congestion, accidents, and, for diesel, road damage (from trucks). For coal, corrective taxes are shown averaged across all plants and across only plants with control technologies (when the two are the same, either all plants have control technologies or none do). Corrective motor fuel taxes are not reported when two or more components of the corrective tax cannot be estimated. Bold #na = data not available; black #na = fuel not used.
Annex Table 6.2.2Fiscal Impacts of Tax Reform, All Countries, 2010(percent of GDP)
Coal taxNatural gas taxGasoline taxDiesel tax
revenue fromrevenue fromrevenue fromrevenue from
correctivetaxcorrectivetaxcorrectivetaxcorrectivetax
Countrytaxchangetaxchangetaxchangetaxchange
North America
Canada0.20.20.40.41.30.50.60.3
Mexico0.10.10.40.41.11.00.50.5
United States0.60.60.40.41.30.80.40.3
Central and South America
Argentina0.00.00.81.3#na#na#na#na
Barbados#na#na0.00.0#na#na#na#na
Bolivia#na#na0.90.91.41.31.52.6
Brazil0.10.10.10.10.90.00.70.4
Chile0.20.20.10.10.90.11.00.7
Colombia0.10.10.20.21.00.10.90.6
Costa Rica#na#na#na#na1.20.61.01.0
Cuba#na#na#na#na#na#na#na#na
Dominican0.10.1#na#na1.71.00.70.6
Republic
Ecuador#na#na0.10.11.02.70.52.1
El Salvador#na#na#na#na1.21.20.80.9
Guatemala0.10.1#na#na#na#na#na#na
Honduras#na#na#na#na1.51.0#na#na
Jamaica#na#na#na#na1.51.21.31.2
Nicaragua#na#na#na#na1.20.7#na#na
Panama0.00.0#na#na1.11.30.91.3
Paraguay#na#na#na#na1.30.52.52.2
Peru0.10.10.30.30.60.11.20.9
St. Vincent#na#na#na#na#na#na#na#na
and the
Grenadines
Suriname#na#na#na#na#na0.0#na0.8
Trinidad and#na#na7.17.1#na#na#na#na
Tobago
Uruguay#na#na0.00.00.80.11.00.2
Venezuela#na#na0.50.80.32.80.10.7
Europe
Albania#na#na#na#na0.70.03.20.7
Austria0.20.20.20.20.40.01.30.2
Belgium0.30.30.40.40.30.01.50.4
Bosnia and#na#na#na#na0.80.02.80.3
Herzegovina
Bulgaria4.44.4#na#na0.90.02.20.3
Croatia0.30.30.60.60.70.01.50.2
Cyprus#na#na#na#na1.00.00.80.0
Czech4.14.10.40.40.70.01.50.0
Republic
Denmark0.20.20.10.10.80.21.20.5
Finland0.30.30.10.10.70.01.00.2
France0.10.10.20.20.30.01.30.3
Germany0.60.70.20.20.50.00.80.1
Greece1.11.20.10.11.10.00.80.0
Hungary0.90.90.90.90.70.01.30.0
Iceland#na#na#na#na0.90.00.70.0
Ireland0.10.20.20.20.60.01.00.0
Italy0.10.10.30.30.40.01.00.1
Luxembourg#na#na0.30.30.70.23.31.4
Macedonia,#na#na#na#na#na#na#na#na
FYR
Malta#na#na#na#na0.60.00.90.0
Montenegro#na#na#na#na#na#na#na#na
Netherlands0.20.20.50.50.50.00.90.2
Norway#na#na0.10.10.40.00.90.3
Poland3.74.00.30.30.70.01.50.1
Portugal0.10.10.20.20.50.01.50.1
Romania1.71.70.80.80.70.01.30.2
Serbia6.36.30.60.60.80.01.90.2
Slovak#na#na#na#na#na#na#na#na
Republic
Slovenia1.31.30.20.20.70.01.40.0
Spain0.10.20.20.20.40.01.60.6
Sweden0.10.10.00.00.70.00.80.0
Switzerland#na#na0.10.10.70.20.50.2
Turkey0.91.00.30.30.40.01.60.5
United0.40.40.40.40.60.01.00.0
Kingdom
Eurasia
Armenia#na#na1.11.10.80.20.30.2
Azerbaijan#na#na1.31.81.21.00.50.6
Belarus#na#na4.14.11.20.22.31.9
Estonia#na#na0.30.30.50.01.10.0
Georgia#na#na0.70.71.70.71.30.9
Kazakhstan2.83.01.21.31.41.10.20.2
Kyrgyzstan#na#na#na#na#na#na#na#na
Latvia0.10.10.70.70.80.02.30.5
Lithuania#na#na0.60.60.70.02.20.8
Russia2.22.23.03.91.91.91.01.1
Tajikistan#na#na#na#na1.00.8#na#na
Turkmenistan#na#na6.120.5#na#na#na#na
Ukraine7.97.94.67.91.50.90.80.9
Uzbekistan0.50.57.128.7#na#na#na#na
Middle East
Bahrain#na#na2.92.90.71.70.41.5
Iran#na#na2.28.01.43.00.33.1
Iraq#na#na0.20.4#na#na#na#na
Israel1.01.00.20.20.80.00.60.0
Jordan#na#na0.60.61.61.00.71.1
Kuwait#na#na#na#na0.81.50.40.9
Lebanon#na#na0.00.0#na#na#na#na
Oman#na#na1.84.01.32.00.10.2
Qatar#na#na2.03.5#na#na#na#na
Saudi Arabia#na#na0.90.91.02.30.52.3
Syria#na#na0.90.92.41.61.53.0
United Arab#na#na1.44.8#na#na#na#na
Emirates
Africa
Algeria#na#na1.06.2#na#na#na#na
Angola#na#na0.00.0#na#na#na#na
Benin#na#na#na#na2.10.21.30.4
Botswana0.50.5#na#na1.51.30.80.7
Burkina Faso#na#na#na#na0.30.00.60.0
Burundi#na#na#na#na0.30.00.70.0
Cabo Verde#na#na#na#na1.70.21.90.7
Cameroon#na#na0.10.10.30.00.50.1
Central African#na#na#na#na1.70.42.40.0
Republic
Comoros#na#na#na#na#na#na#na#na
Congo, Rep. of#na#na#na#na#na#na#na#na
Côte d’Ivoire#na#na#na#na#na#na#na#na
Egypt#na#na1.32.30.71.70.52.5
Ethiopia#na#na#na#na0.30.10.70.9
Gambia, The#na#na#na#na0.40.00.70.0
Ghana#na#na#na#na0.80.50.60.7
Guinea-Bissau#na#na#na#na1.00.21.40.5
Kenya#na#na#na#na1.10.41.01.0
Liberia#na#na#na#na1.21.01.71.5
Libya#na#na0.60.9#na#na#na#na
Madagascar#na#na#na#na0.50.00.80.0
Malawi#na#na#na#na1.10.01.60.0
Mali#na#na#na#na0.90.01.20.3
Mauritius0.50.5#na#na1.40.21.20.6
Morocco0.30.30.00.00.50.11.51.3
Mozambique#na#na#na#na0.90.31.20.6
Namibia0.10.1#na#na#na#na#na#na
Niger#na#na#na#na0.50.10.90.0
Nigeria#na#na0.20.20.51.00.00.0
Rwanda#na#na#na#na0.80.01.40.0
Sāo Tomé and#na#na#na#na#na#na#na#na
Principe
Senegal0.10.1#na#na0.20.00.90.0
Seychelles#na#na#na#na#na#na1.20.0
Sierra Leone#na#na#na#na0.40.10.60.6
South Africa3.23.20.10.11.71.01.00.6
Sudan and#na#na#na#na#na#na#na#na
South Suda
Swaziland#na#na#na#na0.90.51.20.6
Tanzania#na#na0.20.20.70.21.30.2
Togo#na#na#na#na1.60.00.70.1
Tunisia#na#na0.70.70.70.51.51.2
Uganda#na#na#na#na1.20.01.50.3
Zambia#na#na#na#na0.90.10.90.0
Zimbabwe2.72.7#na#na0.70.00.70.1
Asia and Oceania
Afghanistan#na#na0.10.10.60.10.80.4
Australia0.50.50.10.20.80.20.50.2
Bangladesh0.10.11.22.90.20.10.30.7
Bhutan#na#na#na#na1.41.01.82.3
Brunei#na#na#na#na#na#na#na#na
Cambodia#na#na#na#na1.20.71.71.5
China6.86.80.20.20.80.30.60.3
Fiji#na#na#na#na#na#na#na#na
Hong Kong#na#na#na#na#na#na#na#na
SAR
India3.13.10.30.40.80.51.01.2
Indonesia0.50.50.40.40.91.20.51.3
Japan0.30.30.20.21.10.30.50.4
Kiribati#na#na#na#na#na#na#na#na
Korea, Rep. of#na#na#na#na#na#na#na#na
Malaysia0.80.80.91.32.02.10.91.2
Maldives#na#na#na#na#na#na#na#na
Mongolia6.06.0#na#na2.71.30.20.2
New Zealand0.10.10.20.21.00.00.60.6
Pakistan0.40.41.23.80.50.31.01.4
Papua New#na#na#na#na0.4#na#na#na
Guinea
Philippines0.50.50.10.10.50.10.60.9
Samoa#na#na#na#na0.40.10.80.3
Singapore#na#na0.30.30.50.31.10.9
Sri Lanka0.00.0#na#na0.90.61.12.0
Taiwan#na#na#na#na#na#na#na#na
Province of
China
Thailand0.91.10.81.01.00.01.41.4
Vietnam1.71.70.60.82.41.22.22.0
Source: See Annex 6.1.Note: The table shows estimates of the revenue effect, as a percent of GDP, from imposing corrective taxes on different fuels, one column indicating the revenue from these taxes and the other the change in revenue from implementing the corrective tax compared with any revenue (or revenue losses) from existing taxes (or subsidies). Where current taxes exceed corrective taxes, revenue gains from tax reform are taken to be zero (for reasons discussed in Chapter 4, corrective motor fuel taxes may be understated, so lowering tax rates in these cases may not be warranted). To keep them manageable, the calculations do not account for the impact of taxes on one fuel affecting revenues from substitute fuels. Bold #na = data not available; black #na = fuel not used.
Source: See Annex 6.1.Note: The table shows estimates of the revenue effect, as a percent of GDP, from imposing corrective taxes on different fuels, one column indicating the revenue from these taxes and the other the change in revenue from implementing the corrective tax compared with any revenue (or revenue losses) from existing taxes (or subsidies). Where current taxes exceed corrective taxes, revenue gains from tax reform are taken to be zero (for reasons discussed in Chapter 4, corrective motor fuel taxes may be understated, so lowering tax rates in these cases may not be warranted). To keep them manageable, the calculations do not account for the impact of taxes on one fuel affecting revenues from substitute fuels. Bold #na = data not available; black #na = fuel not used.
Annex Table 6.2.3Health and Environmental Impacts of Tax Reform, All Countries, 2010
Percent reduction in pollutionPercent reduction in nationwide energy-
deaths fromrelated CO2 emissions
coalnaturalgasolinedieselcoalnaturalgasolinediesel
Countrytaxgas taxtaxtaxtaxgas taxtaxtax
North America
Canada16.82.81.83.44.47.52.41.0
Mexico3.40.85.29.22.76.55.42.3
United States47.23.31.12.411.55.83.91.4
Central and South America
Argentina#na#na#na#na0.711.6#na#na
Barbados#na#na#na#na#na0.7#na#na
Bolivia#na1.51.520.0#na7.93.37.3
Brazil6.80.20.05.43.82.70.02.1
Chile9.00.10.411.89.13.40.63.6
Colombia9.70.40.013.15.85.90.43.8
Costa Rica#na#na1.413.3#na#na5.07.6
Cuba#na#na#na#na#na1.4#na#na
Dominican22.7#na2.811.86.3#na6.44.3
Republic
Ecuador#na0.27.944.2#na1.223.621.3
El Salvador#na#na3.113.8#na#na10.87.8
Guatemala#na#na#na#na4.3#na#na#na
Honduras#na#na#na#na#na#na5.0#na
Jamaica#na#na1.88.7#na#na6.04.8
Nicaragua#na#na0.9#na#na#na3.3#na
Panama4.8#na2.919.61.7#na10.111.2
Paraguay#na#na0.412.3#na#na2.09.6
Peru1.50.40.39.12.36.50.63.7
St. Vincent#na#na#na#na#na#na#na#na
and the
Grenadines
Suriname#na#na0.04.3#na#na0.11.2
Trinidad and#na#na#na#na#na15.8#na#na
Tobago
Uruguay#na0.10.00.0#na0.81.50.0
Venezuela#na1.729.050.5#na8.930.58.7
Europe
Albania#na#na0.00.0#na#na0.10.0
Austria9.24.00.00.08.67.30.00.0
Belgium31.84.00.00.59.010.90.00.6
Bosnia and#na#na0.00.0#na#na0.00.0
Herzegovina
Bulgaria89.1#na0.00.017.5#na0.00.0
Croatia51.15.30.00.07.512.00.00.0
Cyprus#na#na0.00.0#na#na0.00.0
Czech39.20.70.00.029.63.60.00.0
Republic
Denmark13.64.50.04.312.05.41.42.8
Finland17.12.20.00.712.54.40.00.3
France13.83.30.01.77.27.80.01.2
Germany22.32.60.00.015.95.90.00.0
Greece48.00.20.00.09.72.30.00.0
Hungary42.24.90.00.07.512.30.00.0
Iceland#na#na0.00.0#na#na0.00.0
Ireland26.82.50.00.04.66.80.00.0
Italy6.24.60.00.05.99.80.00.0
Luxembourg#na#na#na#na#na5.70.64.4
Macedonia,#na#na#na#na19.10.7#na#na
FYR
Malta#na#na#na#na#na#na0.00.0
Montenegro#na#na#na#na19.6#na#na#na
Netherlands9.59.30.00.47.012.70.00.2
Norway#na1.60.07.7#na9.00.12.2
Poland50.70.60.00.029.82.30.00.0
Portugal19.71.30.00.05.55.20.00.0
Romania71.21.90.00.010.49.50.00.0
Serbia84.10.30.00.022.62.60.00.0
Slovak33.22.9#na#na17.07.9#na#na
Republic
Slovenia36.41.60.00.015.43.80.00.0
Spain17.31.30.03.95.16.90.02.3
Sweden4.40.60.00.06.51.80.00.0
Switzerland#na8.00.33.3#na4.01.91.0
Turkey72.90.60.00.37.55.40.10.6
United37.53.80.00.012.59.70.00.0
Kingdom
Eurasia
Armenia#na#na#na#na#na5.10.20.1
Azerbaijan#na6.49.611.1#na11.73.11.8
Belarus#na14.30.211.7#na21.90.32.7
Estonia#na2.80.00.0#na1.30.00.0
Georgia#na1.62.95.8#na8.82.22.1
Kazakhstan68.61.12.41.018.14.71.30.3
Kyrgyzstan#na#na#na#na6.5#na#na#na
Latvia6.46.00.00.02.412.10.00.0
Lithuania#na3.50.04.9#na11.50.01.7
Russia25.05.75.99.511.515.02.71.4
Tajikistan#na#na#na#na#na#na2.8#na
Turkmenistan#na#na#na#na#na15.4#na#na
Ukraine75.31.90.00.218.710.70.50.4
Uzbekistan#na#na#na#na0.914.8#na#na
Middle East
Bahrain#na10.93.117.2#na14.74.43.8
Iran#na#na10.93.1#na12.08.412.3
Iraq#na#na#na#na#na3.8#na#na
Israel66.40.40.00.014.53.90.00.0
Jordan#na3.11.813.2#na8.03.43.9
Kuwait#na#na13.248.7#na#na11.46.6
Lebanon#na#na#na#na#na1.3#na#na
Oman#na13.57.03.6#na14.87.10.6
Qatar#na#na#na#na#na17.8#na#na
Saudi Arabia#na2.37.855.5#na10.013.014.5
Syria#na3.01.832.1#na9.63.69.9
United Arab#na#na#na#na#na13.9#na#na
Emirates
Africa
Algeria#na#na#na#na#na10.4#na#na
Angola#na#na#na#na#na2.4#na#na
Benin#na#na0.00.0#na#na0.60.0
Botswana38.6#na3.94.112.7#na5.02.5
Burkina Faso#na#na0.00.0#na#na0.00.0
Burundi#na#na0.00.0#na#na0.00.0
Cabo Verde#na#na#na#na#na#na0.61.2
Cameroon#na0.10.00.0#na2.90.00.0
Central African#na#na1.00.0#na#na1.90.0
Republic
Comoros#na#na#na#na#na#na#na#na
Congo, Rep. of#na#na#na#na#na4.5#na#na
Côte d’Ivoire#na1.5#na#na#na7.4#na#na
Egypt#na4.83.536.8#na11.85.89.2
Ethiopia#na#na0.911.5#na#na1.710.5
Gambia, The#na#na0.00.0#na#na0.00.0
Ghana#na#na3.16.7#na#na4.95.0
Guinea-#na#na0.00.0#na#na0.30.2
Bissau
Kenya#na#na1.58.6#na#na2.36.3
Liberia#na#na3.59.6#na#na2.63.4
Libya#na#na#na#na#na8.3#na#na
Madagascar#na#na0.00.0#na#na0.00.0
Malawi#na#na0.00.0#na#na0.00.0
Mali#na#na0.00.0#na#na0.00.0
Mauritius#na#na#na#na8.6#na0.40.7
Morocco27.40.10.48.811.30.90.55.8
Mozambique#na#na#na#na#na#na1.51.0
Namibia#na#na#na#na3.3#na#na#na
Niger#na#na0.00.0#na#na0.70.0
Nigeria#na0.821.40.7#na7.213.10.2
Rwanda#na#na0.00.0#na#na0.00.0
Sāo Tomé and#na#na#na#na#na#na#na#na
Principe
Senegal9.4#na0.00.05.3#na0.00.0
Seychelles#na#na#na#na#na#na#na0.0
Sierra Leone#na#na0.01.7#na#na0.30.4
South Africa67.50.00.41.322.20.20.90.4
Sudan and#na#na#na#na#na#na#na#na
South Sudan
Swaziland#na#na#na#na#na#na2.21.3
Tanzania#na0.30.70.0#na4.70.90.0
Togo#na#na0.00.0#na#na0.00.0
Tunisia#na2.52.29.1#na10.41.63.6
Uganda#na#na0.00.0#na#na0.00.0
Zambia#na#na0.00.0#na#na1.40.0
Zimbabwe61.1#na0.00.019.8#na0.00.0
Asia and Oceania
Afghanistan#na0.10.00.0#na0.70.20.0
Australia19.80.30.53.611.82.90.80.7
Bangladesh18.57.20.69.51.515.00.32.2
Bhutan#na#na#na#na#na#na4.712.4
Brunei#na#na#na#na#na20.4#na#na
Cambodia#na#na2.613.3#na#na2.04.5
China65.90.10.00.132.80.70.30.2
Fiji#na#na#na#na#na#na#na#na
Hong Kong#na#na#na#na15.5#na#na#na
SAR
India63.10.20.21.022.01.50.61.7
Indonesia38.41.52.212.69.25.25.34.4
Japan17.23.31.28.116.55.11.91.9
Kiribati#na#na#na#na#na#na#na#na
Korea, Rep. of3.73.90.1#na27.25.30.5#na
Malaysia20.02.82.411.69.37.05.13.0
Maldives#na#na#na#na#na#na#na#na
Mongolia71.4#na0.30.213.5#na0.90.1
New Zealand14.10.4#na12.74.95.10.03.4
Pakistan31.14.30.54.62.310.30.63.0
Papua New#na#na#na#na#na#na#na#na
Guinea
Philippines51.30.20.15.012.91.90.63.3
Samoa#na#na#na#na#na#na#na#na
Singapore#na2.60.934.9#na1.60.31.0
Sri Lanka6.7#na2.621.7#na#na2.911.7
Taiwan#na#na#na#na20.23.4#na#na
Province of
China
Thailand66.31.10.01.79.26.90.02.4
Vietnam44.20.31.65.112.42.91.72.6
Source: See Annex 6.2.Note: The table shows the percent reduction in countries’ nationwide deaths from air pollution and the percent reduction in nationwide CO2 emissions from implementing corrective taxes on each of the fuels (ignoring impacts on use of other fuels). The reduction in CO2 emissions comes from the sorts of behavioral responses summarized in Figure 3.1 while the reduction in premature deaths comes from similar responses and the adoption of emissions control equipment at power plants. In cases where current taxes exceed corrective taxes, potential health and CO2 reductions from tax reform are indicated by 0. Bold #na = data not available; black #na = fuel not used.
Source: See Annex 6.2.Note: The table shows the percent reduction in countries’ nationwide deaths from air pollution and the percent reduction in nationwide CO2 emissions from implementing corrective taxes on each of the fuels (ignoring impacts on use of other fuels). The reduction in CO2 emissions comes from the sorts of behavioral responses summarized in Figure 3.1 while the reduction in premature deaths comes from similar responses and the adoption of emissions control equipment at power plants. In cases where current taxes exceed corrective taxes, potential health and CO2 reductions from tax reform are indicated by 0. Bold #na = data not available; black #na = fuel not used.
Annex Table 6.2.4Estimates of Current Fuel Excise Taxes, All Countries, 2010
Current excise taxes
$ per gigajoule$ per gigajoule$ per liter$ per liter
Countrycoalnatural gasgasolinediesel
North America
Canada0.0−0.20.360.42
Mexico0.00.00.100.10
United States0.0−0.10.130.14
Central and South America
Argentina0.0−1.30.330.39
Barbados0.00.00.420.28
Bolivia0.00.00.07−0.12
Brazil0.00.00.750.28
Chile0.00.00.600.26
Colombia0.00.00.780.29
Costa Rica0.00.00.310.11
Cuba#na#na#na#na
Dominican Republic0.00.00.400.17
Ecuador0.00.0−0.32−0.45
El Salvador0.00.00.090.03
Guatemala0.00.00.130.04
Honduras0.00.00.210.06
Jamaica0.00.00.150.12
Nicaragua0.00.00.260.00
Panama0.00.00.02−0.09
Paraguay0.00.00.450.15
Peru0.00.00.580.24
St. Vincent and the#na#na#na#na
Grenadines
Suriname0.00.00.310.26
Trinidad and Tobago0.00.00.000.00
Uruguay0.00.00.660.58
Venezuela0.0−1.3−0.60−0.65
Europe
Albania0.00.00.630.54
Austria0.00.00.930.78
Belgium0.00.01.180.83
Bosnia and Herzegovina0.00.00.590.56
Bulgaria0.00.00.710.65
Croatia0.00.00.860.73
Cyprus#na0.00.690.66
Czech Republic0.00.00.990.89
Denmark0.00.01.160.87
Finland0.00.01.220.80
France0.00.01.130.84
Germany−1.30.01.200.92
Greece−0.10.01.290.89
Hungary0.00.00.950.82
Iceland#na0.00.880.85
Ireland−3.30.01.050.90
Italy0.00.01.080.86
Luxembourg#na0.00.840.60
Macedonia, FYR#na#na#na#na
Malta#na0.00.870.73
Montenegro#na#na#na#na
Netherlands0.00.01.310.84
Norway0.0−0.21.341.11
Poland−0.60.00.850.71
Portugal−0.10.01.120.77
Romania0.00.00.760.69
Serbia0.00.00.670.62
Slovak Republic#na#na#na#na
Slovenia−0.40.00.960.86
Spain−2.00.00.850.70
Sweden0.00.01.191.01
Switzerland#na0.00.870.92
Turkey−0.50.01.370.97
United Kingdom0.0−0.11.201.21
Eurasia
Armenia#na0.00.280.14
Azerbaijan#na−0.90.09−0.05
Belarus0.00.00.450.20
Estonia0.00.00.830.79
Georgia0.00.00.300.23
Kazakhstan−0.2−0.20.12−0.08
Kyrgyzstan#na#na#na#na
Latvia0.00.00.760.71
Lithuania0.00.00.870.62
Russia0.0−0.90.020.02
Tajikistan0.00.00.130.10
Turkmenistan0.0−4.4−0.34−0.38
Ukraine0.0−1.90.180.06
Uzbekistan0.0−5.30.170.08
Middle East
Bahrain0.00.0−0.30−0.38
Iran0.0−4.8−0.37−0.55
Iraq0.0−1.6−0.18−0.23
Israel0.0−0.20.930.94
Jordan0.00.00.14−0.09
Kuwait0.0−1.7−0.32−0.38
Lebanon0.00.00.36−0.06
Oman0.0−2.2−0.24−0.19
Qatar0.0−1.6−0.33−0.38
Saudi Arabia0.00.0−0.38−0.50
Syria0.00.00.27−0.34
United Arab Emirates0.0−4.6−0.200.03
Africa
Algeria0.0−8.6−0.24−0.39
Angola0.00.0−0.12−0.31
Benin0.00.00.200.22
Botswana0.00.00.100.11
Burkina Faso0.00.00.570.38
Burundi0.00.00.630.60
Cabo Verde0.00.00.990.44
Cameroon0.00.00.370.24
Central African Republic0.00.00.810.76
Comoros0.00.00.000.00
Congo, Rep. of#na#na#na#na
Côte d’Ivoire#na#na#na#na
Egypt#na−1.4−0.42−0.57
Ethiopia0.00.00.230.00
Gambia, The0.00.00.560.35
Ghana0.00.00.110.05
Guinea-Bissau0.00.00.520.29
Kenya0.00.00.380.07
Liberia0.00.00.170.14
Libya0.0−1.1−0.41−0.46
Madagascar0.00.00.570.31
Malawi0.00.00.880.68
Mali0.00.00.510.30
Mauritius0.00.00.620.29
Morocco0.00.00.610.14
Mozambique0.00.00.380.25
Namibia0.00.00.230.23
Niger0.00.00.240.30
Nigeria0.00.0−0.190.11
Rwanda0.00.01.000.96
São Tomé and Príncipe#na#na#na#na
Senegal0.00.00.590.32
Seychelles0.00.00.000.55
Sierra Leone0.00.00.140.10
South Africa0.00.00.350.34
Sudan and South Suda#na#na#na#na
Swaziland0.00.00.240.24
Tanzania0.00.00.480.40
Togo0.00.00.310.26
Tunisia0.00.00.220.16
Uganda0.00.00.730.39
Zambia0.00.00.760.59
Zimbabwe0.00.00.460.29
Asia and Oceania
Afghanistan#na0.00.200.18
Australia0.0−0.10.490.49
Bangladesh0.0−2.60.26−0.23
Bhutan#na0.00.25−0.04
Brunei#na#na#na#na
Cambodia#na0.00.320.12
China0.00.00.390.37
Fiji#na0.00.000.00
Hong Kong SAR#na#na#na#na
India0.0−1.00.36−0.04
Indonesia0.00.0−0.13−0.35
Japan0.00.00.750.46
Kiribati#na0.00.000.00
Korea, Rep. of#na#na0.85#na
Malaysia0.0−0.8−0.04−0.10
Maldives#na0.00.000.00
Mongolia0.00.00.280.18
New Zealand0.00.00.630.13
Pakistan0.0−4.10.17−0.03
Papua New Guinea#na0.00.000.00
Philippines0.00.00.22−0.02
Samoa#na0.00.200.20
Singapore#na0.00.690.31
Sri Lanka0.00.00.21−0.20
Taiwan Province of#na#na#na#na
China
Thailand−0.9−0.30.590.09
Vietnam0.0−0.70.250.11
Source: See Annex 6.1.Note: The table shows estimates of the current excise tax (or subsidy) for each fuel as measured in Clements and others (2013) using the price-gap approach (e.g., comparing differences between domestic and international fuel prices) consistently applied across countries. These estimates will differ from authorities’ assessments of tax rates based on their own country-specific data. Bold #na = data not available; black #na = fuel not used.
Source: See Annex 6.1.Note: The table shows estimates of the current excise tax (or subsidy) for each fuel as measured in Clements and others (2013) using the price-gap approach (e.g., comparing differences between domestic and international fuel prices) consistently applied across countries. These estimates will differ from authorities’ assessments of tax rates based on their own country-specific data. Bold #na = data not available; black #na = fuel not used.
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1These taxes are calculated on a consistent basis across countries, based primarily on a comparison of domestic fuel prices with international prices.
2This and other global average fuel prices mentioned in this chapter are also from Clements and others (2013).
3Governments frequently use regulatory approaches to promote the use of control technologies but, besides raising revenue, fiscal instruments likely provide more robust incentives. As discussed in Box 3.1, fiscal instruments provide greater incentives to shift to coal with lower pollution content or to other generation fuels, and to reduce electricity demand.
4To convert to dollars per gallon, multiply by 3.8.
5Even in these cases (e.g., Germany and the United Kingdom) reductions in gasoline taxes may not be efficient in practice because the corrective taxes may be understated for a variety of reasons (as discussed in Chapter 5).
6For example, just because there might be a wide gap between the current and corrective tax for a particular fuel does not necessarily mean the fiscal and environmental benefits from reforming this fuel tax are larger than for other reform options, because these benefits also depend on fuel usage.
7Dinan (forthcoming), for example, estimates that for the United States full compensation for the bottom income quintile for a carbon tax would offset 12 percent of the revenue.
8The fiscal dividend from the corrective coal tax in China, 6.8 percent of GDP, is evidently very large, but is based on the following assumptions: The corrective tax for local air pollution, at controlled emission rates, is $6.0/GJ which, along with the carbon charge of $3.3/GJ, increases the baseline coal price ($6.4/GJ) by about 145 percent. In turn, this reduces coal use by 36 percent to about 44 billion GJ. Multiplying this amount by the corrective tax ($9.3/GJ) gives revenue of about $405 billion, and dividing by 2010 GDP ($5,930 billion) gives the above figure.
9Clements and others (2013) estimate fossil fuel subsidies worldwide, including the implicit subsidy from the failure to charge for environmental side effects, to be almost 3 percent of global GDP. This estimate is based on a cruder assessment of external costs (using a simple extrapolation from several country case studies to the global level), which are lower than estimated here, however, the subsidy is assessed at current fuel consumption levels (rather than the lower levels that would occur with higher fuel prices).
10These estimated reductions implicitly reflect some combination of the main behavioral responses summarized in Figure 3.1.
11For petroleum products, domestic prices to fuel users are taken from publicly available sources for OECD countries; for other countries they were provided by country authorities to the IMF, supplemented by survey data from Ebert and others (2009). Where fuel prices were unavailable they were imputed based on the observed pass-through of international fuel prices for that country. For coal and natural gas, for countries for which data are more sparse, Clements and others (2013) infer domestic prices from international prices, making an adjustment for transportation and distribution costs, and subtracting any fuel subsidies that have been quantified (for countries for which they are significant) by the OECD and the International Energy Agency.
12In reality, some portion might be passed backward into lower prices for fuel suppliers depending on the relative slope of fuel demand and supply curves, though this portion appears to be relatively modest (Bovenberg and Goulder, 2001).
13See various reviews cited in Parry, Walls, and Harrington (2007) and Sterner (2007).
14The price increase is understated for coal and natural gas because it ignores additional costs at plants that apply emissions control technologies in response to the corrective tax.
15For example, using data supplied by Dallas Burtraw, the capital costs and discounted operating costs over a 10-year period for installing and using an SO2 scrubber at a 500 megawatt coal plant in the United States would amount to about $300 million. And assuming the scrubber cuts emissions (that would otherwise be 42,000 tons a year) by 98 percent, the discounted tax savings, assuming a corrective tax of $17,000 per ton of SO2, amount to about $5,500 million, or more than 18 times the technology cost.
16CO2 emissions reductions are expressed against a baseline equal to emissions from the four fuels (which is slightly less than total energy-related emissions given that it excludes emissions from fuel products not considered here, principally petroleum products other than motor fuels).

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