Paul L. Caron

Thursday, September 26, 2019

Tax Presentations At Today's 20th Global Conference On Environmental Taxation

Tax presentations at today's 20th Global Conference on Environmental Taxation in Cyprus, Greece:

BannerElena Belletti (Columbia), Environmental Taxation in Africa: Barriers and Policy Options:

Countries in Africa are among the most severely impacted by the effects of climate change and local pollution, with poorest households being the most vulnerable to environmental issues. Additionally, their public revenues often do not meet the 15% tax-to-GDP ratio, which is considered the minimum threshold to support development; and high inequality among the population poses a significant challenge to sustainable development. While environmental taxation would ideally contribute to tackling both those socioeconomic and environmental issues, countries in Africa often lack the necessary fiscal infrastructure to implement market-based instruments for environmental fiscal policy, and frequently face significant issues in shaping expenditure policies that would effectively offset some of the regressive effects of those instruments. Within this context, what are the options for those countries in the area of environmental fiscal policy, which would support the implementation of the Development Goals (SDGs)?

This paper provides an analysis of the current barriers faced by developing countries, least developed countries (LDCs) and other countries in special situations in Africa, both from the tax and from the public expenditure point of view, which pose challenges in the implementation of market-based instruments for environmental fiscal policy. Starting from this analysis, it then aims to provide a practical overview of which fiscal policy instruments could be practically implementable by those countries, while contributing to tackle some of the most prominent environmental issues in the continent; and which are the necessary conditions for those instruments to be successfully applied, while contributing to achieving the SDGs. The paper takes into consideration the potential for additional revenue mobilization through environmental taxation, the administrative feasibility of proposed options, and their effectiveness in tackling the most pressing environmental issues. It also analyses the suitability of those options against some of the social, economic and environmental objectives declared by those countries in national sustainable development strategies and in international agreements.

Robert Cairns, (McGill University, Canada), The Green Paradox, A Hoteling Cul de Sac:

The green paradox is an effect by which an increasing tax per unit on oil production, aimed at tracking damages from CO2 emissions, induces an increase in world production and a decrease in price in the near term. The increase is a rational response in a Hotelling exhaustible-resource model. We simulate the decisions of a price-taking producer in response to a tax of various shapes. In contrast to a Hotelling model, our extraction technology involves irreversible, lumpy investments in exploration and development. In addition, we assume output from a developed reserve is subject to natural decline at a rate that is determined by the sunk development investment and the geology of the reserve. Decisions are far more complicated, and results far subtler, than in the Hotelling framework. Given a price path, we show that almost any form of tax causes a reduction in the level of development and initial production, thereby contradicting the hypothesis of the green paradox.

Deborah Jarvie (University of Lethbridge, Canada), Simplifying the Complexities of Supply Chains, Carbon Emissions, and Carbon Policies:

The terms ‘carbon pricing’ and ‘supply chain’ have both become increasingly recognizable phrases in all corners of the planet, yet there is much that is still not well understood about these concepts, and the relationship between the two within a comprehensive system remains a mystery to many. This paper aims to shed light on this complex relationship by examining the internal transactional frameworks of supply chains and the external impacts and influences of carbon emissions and policies, within a comprehensive framework designed to highlight significant connections, and identify leverage points for effective environmental tax policy.

International supply chains are discussed in the paper from a ‘cradle to grave’ perspective for various sectors, examining factors associated with resource inputs, transformative production practices, distribution to consumers, and reverse logistics. Externalities resulting from the various points of the supply chain are then linked to carbon policies from the likes of the International Maritime Organization (IMO), the International Civil Aviation Organization (ICAO), national road and rail transportation environmental frameworks, and government regulated procurement and manufacturing sectors.

From a theoretical perspective, the paper also discusses the literature on top-down environmental input-output macro models, bottom-up process analysis micro models, and hybrid combinations of both, identifying examples of these models in current policy frameworks as they pertain to elements within supply chains. The connections made between the theory, current policies in place, and supply chain practices, allows for not only a clearer understanding of the links between carbon emissions and carbon policies, but also provides a framework from which decision-makers can better assess the most effective and efficient strategies for cleaner economic growth.

As supply chains continue to grow in complexity, and carbon emissions continue to rise, dynamic yet clearly designed models for sustainable growth based on sound economic and environmental policies, such as the framework proposed in this paper, must be at the forefront of national and international discussions.

Roberta Mann (University of Oregon), Targeting Plastic Pollution with Taxes:

Marine plastic pollution is a matter of increasing global concern. In 2015, a report by McKinsey & Company stated that “the amount of unmanaged plastic waste entering the
ocean has reached crisis levels.” Assuming a constant level of fish stocks, the weight of plastic pollution in the ocean in 2050 is projected to exceed the weight of the fish. The concern reaches all levels of government from the local to the national. Solutions include plastic bag bans, taxes or fees on single-use plastics, incentives for reusable bags, and incentives for recycling. Recycling has become a particular issue since early 2018, when China announced it would stop accepting imported plastic waste. Plastics pollution creates significant environmental externalities, such as harm to natural systems, greenhouse gas emissions from production and after-use incineration, and human health impacts from endocrine disrupters released when plastics degrade. Environmental taxation should be an efficient solution to the plastics pollution problem, if properly designed. Research shows that taxation could be more effective than other measures such as incentives. This paper will assess the various solutions proposed and used worldwide.

Janet Milne (Vermont Law School), From Rhetoric to Reality: Is the Promise of a Lockbox for Carbon Tax Revenue Durable?:

Debates about carbon taxes in political and policy circles inevitably involve discussions about how to use the revenue from carbon taxes. Choices about revenue use will turn on the complex interaction of political strategies, the broader fiscal picture, equity and economic concerns, and environmental considerations. The ultimate choice will mold policymakers’ promises to constituents and the public as they describe and promote carbon taxes. Those promises become particularly important when they purport to dedicate the revenue to a specific purpose. Voters and stakeholders will wonder whether promises can and will be kept. Can the revenue actually be put into a secure lockbox to ensure that the revenue is used as promised? Will that lockbox endure over time? This paper considers the legal durability of promises to earmark revenue. It focuses on three types of revenue dedication: revenue-neutral tax reform, revenue recycling through “dividends” or rebates, and dedication of revenue to spending on climate-related matters. It explores how the legal design of these alternatives and the legal context may influence whether promises are kept in the short and long terms. While drawing on examples of carbon pricing measures and proposals in North America, the paper strives to identify issues that may apply in other countries as well. Regardless of jurisdiction, policymakers and carbon tax advocates should consider whether their rhetorical promises can translate into legally durable reality. The paper does not advocate for specific policy or political choices about how to use carbon tax revenue. It seeks instead to help inform choices and future research.

Plenary Panel Discussion: Carbon Pricing – The Paths Forward

  • Janet Milne (Vermont) (Sessions Chair)
  • Susanne Åkerfeldt (Senior Adviser, Ministry of Finance, Sweden)
  • Elena Belletti (Columbia)
  • Christian De Perthuis (Paris-Dauphine University, France)

A growing number of jurisdictions around the world are implementing or planning to implement a carbon tax or an emissions trading system. Lessons learned by countries that have already implemented some form of carbon pricing may guide the design and implementation of new schemes. This session seeks to solicit concrete suggestions about how best to advance the growth of carbon pricing from the panellists and conference participants.

The panellists have a long and diverse experience in various aspects of carbon pricing. They will reflect on the global knowledge gained so far and will address a variety of aspects of carbon taxes and emissions trading schemes, such as: Which instrument designs work in a simple, effective manner? How to use carbon pricing revenue in ways that will build strong policies, political support and transparency? How can carbon pricing build stronger constituencies among the business sector concerned about competitiveness and households concerned about equity? Are the answers different for carbon taxes and emissions trading schemes? After the panellists’ presentations, conference participants will be invited to contribute their thoughts on specific focus questions.

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Is it possible, anymore, for tax law professors to actually focus on matters like tax law theory, practical tax strategies, estate planning, tax legislation, IRS issues, and Tax Court, rather than tying everything to diversity, social justice, wealth redistribution, politics, pure child-like whining, and, worse, virtue signalling? You wouldn’t think it’s possible given the overwhelming percentage of articles at this site, over months and months, which no longer focus on actual taxes and focus on the other.

Even when taxes are covered, as in these articles, they are linked with socialist causes, state unproven assumptions as facts, omit inconvenient counter-arguments, overlook barriers from non-Western countries, and are incredibly void of economic reality. Maybe it’s fun and easy to write about issues to seek admiration, but it seems incredibly lazy, and the misdirected efforts cheat students and taxpayers who want results in the actual field of tax study.

Professors, get off of causes and out of politics. When publishing, write something that actually benefits students and furthers realistic understanding of taxes. If that changed, it would make this blog as interesting as it used to be and could be again.

I hope there are others who feel as I do.

Posted by: Woody | Sep 26, 2019 7:23:41 PM