Hostname: page-component-586b7cd67f-dsjbd Total loading time: 0 Render date: 2024-11-28T16:32:17.081Z Has data issue: false hasContentIssue false
  • English
  • Français

Does green taxation drive countries towards the carbon efficiency frontier?

Published online by Cambridge University Press:  16 October 2017

Tobias Böhmelt ,
Farzad Vaziri  and
Hugh Ward
Tobias Böhmelt
Affiliation:
Center for Comparative and International Studies, ETH Zürich, Switzerland Department of Government, University of Essex, UK E-mail: [email protected] or [email protected]
Farzad Vaziri
Affiliation:
Department of Government, University of Essex, UK E-mail: [email protected]
Hugh Ward
Affiliation:
Department of Government, University of Essex, UK E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

A country is on the carbon efficiency frontier if its per-capita emissions of CO2 are at least as low as any state that was at least as economically developed at a period when technology was no more advanced. Building on earlier work employing Data Envelopment Analysis to benchmark performance, we argue that a useful measure of whether a state adopts “good practice” in relation to climate change is how near it is to this frontier. We calculate efficiency scores for a sample of developed countries between 1994 and 2011, and model the impact of green taxation, next to a series of political and economic controls, on performance. We find that higher levels of environmental tax revenue are positively and significantly associated with higher carbon efficiency. The central contributions of this research are the introduction of an innovative measure for environmental quality and assessing how this is driven by green taxation.

Keywords

carbon efficiency frontierenvironmental efficiencyenvironmental outcome measuregreen taxationquantitative analysis
Type
Research Article
Information
Journal of Public Policy , Volume 38 , Issue 4 , December 2018 , pp. 481 - 509
Copyright
© Cambridge University Press, 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abdullah, S. and Morley, B. (2014) Environmental Taxes and Economic Growth: Evidence from Panel Causality Tests. Energy Economics 42(1): 27–33.Google Scholar
Adeyemi, O. and Hunt, L. (2014) Accounting for Asymmetric Price Responses and Underlying Energy Demand Trends in OECD Industrial Energy Demand. Energy Economics 45(4): 435–444.Google Scholar
Aghion, P., Dechezleprêtre, A., Hémous, D., Martin, R. and Van Reenen, J. (2016) Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry. Journal of Political Economy 124(1): 1–51.Google Scholar
Aklin, M. (2016) Re-Exploring the Trade and Environment Nexus Through the Diffusion of Pollution. Environmental and Resource Economics 64(4): 663–682.Google Scholar
Albrizio, S., Koźluk, T. and Zipperer, V. (2014) Empirical Evidence on the Effects of Environmental Policy Stringency on Productivity Growth. OECD Economics Department Working Papers No. 1179.Google Scholar
Anger, N., Böhringer, C. and Löschel, A. (2010) Paying the Piper and Calling the Tune? A Meta-Regression Analysis of the Double-Dividend Hypothesis. Ecological Economics 69(5): 1495–1502.Google Scholar
Aragon, Y., Daouia, A. and Thomas-Agnan, C. (2005) Nonparametric Frontier Estimation: A Conditional Quantile-Based Approach. Econometric Theory 21(2): 358–389.Google Scholar
Bättig, M. and Bernauer, T. (2009) National Institutions and Global Public Goods: Are Democracies More Cooperative in Climate Change Policy? International Organization 63(2): 281–308.Google Scholar
Beck, N. (2001) Time-Series-Cross-Section Data: What Have We Learned in the Past Few Years? Annual Review of Political Science 4(1): 271–293.Google Scholar
Beck, N. and Katz, J. (2011) Modelling Dynamics in Time-Series-Cross-Section Political Economy Data. Annual Review of Political Science 14(1): 331–352.Google Scholar
Bernauer, T. and Böhmelt, T. (2013a) Are Economically “Kinder, Gentler Societies” also Greener? Environmental Science & Technology 47(21): 11993–12001.Google Scholar
Bernauer, T. and Böhmelt, T. (2013b) National Climate Policies in International Comparison: The Climate Change Cooperation Index. Environmental Science & Policy 25(1): 196–206.Google Scholar
Bernauer, T., Böhmelt, T. and Koubi, V. (2013) Is There a Democracy-Civil Society Paradox in Global Environmental Governance? Global Environmental Politics 13(1): 88–107.Google Scholar
Bernauer, T. and Koubi, V. (2009) Effects of Political Institutions on Air Quality. Ecological Economics 68(4): 1355–1365.Google Scholar
Bernauer, T. and Koubi, V. (2012) Are Bigger Governments Better Providers of Public Goods? Evidence from Air Pollution. Public Choice 156(3–4): 593–609.Google Scholar
Böhmelt, T. and Betzold, C. (2013) The Impact of Environmental Interest Groups in International Environmental Negotiations: Do ENGOs Induce Stronger Environmental Commitments? International Environmental Agreements 13(2): 127–151.Google Scholar
Böhmelt, T., Böker, M. and Ward, H. (2016) Democratic Inclusiveness, Climate Policy Outputs, and Climate Policy Outcomes. Democratization 23(7): 1272–1291.Google Scholar
Böhmelt, T. and Pilster, U. (2010) International Environmental Regimes – Legalisation, Flexibility and Effectiveness. Australian Journal of Political Science 45(2): 245–260.Google Scholar
Böhmelt, T. and Pilster, U. (2011) Zur Problematik kollektiven Handelns – Eine quantitative Studie internationaler Umweltregime. Zeitschrift für Internationale Beziehungen 18(2): 63–90.Google Scholar
Bosquet, B. (2000) Environmental Tax Reform: Does it Work? A Survey of the Empirical Evidence. Ecological Economics 34(10): 19–32.Google Scholar
Bovenberg, L. and de Mooij, R. (1994a) Environmental Levies and Distortionary Taxation. American Economic Review 84(4): 1085–1089.Google Scholar
Bovenberg, L. and de Mooij, R. (1994b) Environmental Tax Reform and Endogenous Growth, CentER Discussion Paper, Vol. 1994-98, University of Tilburg.Google Scholar
Bovenberg, L. and Goulder, L. (2001) Environmental Taxation and Regulation. National Bureau of Economic Research Working Papers No. 8458.Google Scholar
Budge, I., Klingemann, H., Volkens, A., Bara, J. and Tanenbaum, E. (2001) Mapping Policy Preferences: Estimates for Parties, Electors, and Governments 1945-1998. Oxford: Oxford University Press.Google Scholar
Cao, X. and Ward, H. (2015) Winning Coalition Size, State Capacity, and Time Horizons: An Application of Modified Selectorate Theory to Environmental Public Goods Provision. International Studies Quarterly 59(2): 264–279.Google Scholar
Coady, D., Parry, I., Sears, L. and Shang, B. (2015) How Large Are Global Energy Subsidies? IMF Working Paper No. WP/15/105.Google Scholar
Daraio, C. and Simar, L. (2007) Conditional Nonparametric Frontier Models for Convex and Nonconvex Technologies: A Unifying Approach. Journal of Productivity Analysis 28(1): 13–32.Google Scholar
Dasgupta, S., Laplante, B., Wang, H. and Wheeler, D. (2002) Confronting the Environmental Kuznets Curve. Journal of Economic Perspectives 16(1): 147–168.Google Scholar
Dechezleprêtre, A. and Glachant, M. (2014) Does Foreign Environmental Policy Influence Domestic Innovation? Evidence from the Wind Industry. Environmental and Resource Economics 58(3): 391–413.Google Scholar
Deprins, D., Simar, L. and Tulkens, H. (1984) Measuring Labor-Efficiency in Post Offices. In Marchand M. , Pestieau P. and Tulkens H. (eds.), The Performance of Public Enterprises: Concepts and Measurements. Amsterdam: North Holland, 285–309.Google Scholar
Dreher, A. (2006) Does Globalization Affect Growth? Evidence from a New Index of Globalization. Applied Economics 38(10): 1091–1110.Google Scholar
Ekins, P. and Speck, S. (1999) Competitiveness and Exemptions from Environmental Taxes in Europe. Environmental and Resource Economics 13(3): 369–396.Google Scholar
Ekins, P., Pollitt, H., Summerton, P. and Chewpreecha, U. (2012) Increasing Carbon and Material Productivity through Environmental Tax Reform. Energy Policy 42(3): 365–376.Google Scholar
Färe, R., Grosskopf, S. and Hernández-Sancho, F. (2004) Environmental Performance: An Index Number Approach. Resource and Energy Economics 26(4): 343–352.Google Scholar
Fiorino, D. (2011) Explaining National Environmental Performance: Approaches, Evidence and Implications. Policy Science 44(4): 367–389.Google Scholar
Francis, G. and Holloway, J. (2007) What Have We Learned? Themes From the Literature on Best-Practice Benchmarking. International Journal of Management Reviews 9(3): 171–189.Google Scholar
Franzese, R. and Hays, J. (2008) Interdependence in Comparative Politics: Substance, Theory, Empirics, Substance. Comparative Political Studies 41(4/5): 742–780.Google Scholar
Fredriksson, P. and Gaston, N. (2000) Ratification of the 1992 Climate Change Convention: What Determines Legislative Delay? Public Choice 104(3–4): 345–368.Google Scholar
Fredriksson, P., Neumayer, E. and Ujhelyi, G. (2007) Kyoto Protocol Cooperation: Does Government Corruption Facilitate Environmental Lobbying? Public Choice 133(1–2): 231–251.Google Scholar
Fujiwara, N., Núñez Ferrer, J. and Egenhofer, C. (2006) The Political Economy of Environmental Taxation in European Countries. Centre for European Public Policy Working Document No. 245.Google Scholar
Genovese, F., Kern, F. and Martin, C. (2017) Policy Alteration: Rethinking Diffusion Processes When Policies Have Alternatives. International Studies Quarterly 61(2): 236–252.Google Scholar
Gleditsch, K. and Ward, M. (1999) Interstate System Membership: A Revised List of the Independent States since 1816. International Interactions 25(4): 393–413.Google Scholar
Goulder, L. (1994) Environmental Taxation and the “Double Dividend”: A Reader’s Guide. National Bureau of Economic Research Working Paper Series No. 4896.Google Scholar
Grossman, G. and Krueger, A. (1995) Economic Growth and the Environment. Quarterly Journal of Economics 110(2): 353–377.Google Scholar
Grundig, F. and Ward, H. (2015) Structural Leadership and Regime Effectiveness. Political Studies 63(1): 221–239.Google Scholar
Harbaugh, W., Levinson, A. and Wilson, D. (2002) Reexamining the Empirical Evidence for an Environmental Kuznets Curve. Review of Economics and Statistics 84(3): 541–551.Google Scholar
Holzinger, K., Knill, C. and Sommerer, T. (2008) Environmental Policy Convergence: The Impact of International Harmonization, Transnational Communication, and Regulatory Competition. International Organization 62(3): 553–587.Google Scholar
Hsu, A., Ainsley, L. and Emerson, J. (2016) What Progress Have We Made Since Rio? Results from the 2012 Environmental Performance Index (EPI) and Pilot Trend EPI. Environmental Science & Policy 33(2): 171–185.Google Scholar
Itkonen, J. (2012) Problems Estimating the Carbon Kuznets Curve. Energy 39(2): 274–280.Google Scholar
Jänicke, M. (1985) Preventive Environmental Policy as Ecological Modernisation and Structural Policy. Berlin: Wissenschaftszentrum Berlin.Google Scholar
Jänicke, M. (2008) Ecological Modernisation: New Perspectives. Journal of Cleaner Production 16(5): 557–565.Google Scholar
Jordan, A., Wurzel, R. and Brückner, L. (2003) European Governance and the Transfer of “New” Environmental Policy Instruments. Public Administration 81(3): 555–574.Google Scholar
Jorgenson, D., Goettle, R., Ho, M. and Wilcoxen, P. (2015) Carbon Taxes and Fiscal Reforms in the United States. National Tax Journal 68(1): 121–138.Google Scholar
Kaika, D. and Zervas, E. (2013a) The Environmental Kuznets Curve (EKC) Theory. Part A: Concept, Causes, and the CO2 Emissions Case. Energy Policy 62(3): 1392–1402.Google Scholar
Kaika, D. and Zervas, E. (2013b) The Environmental Kuznets Curve (EKC) Theory. Part B: Critical Issues. Energy Policy 62(3): 1403–1411.Google Scholar
Keele, L. and Kelly, N. (2006) Dynamic Models for Dynamic Theories: The Ins and Outs of Lagged Dependent Variables. Political Analysis 14(2): 186–205.Google Scholar
Klingemann, H., Volkens, A., Bara, J., Budge, I. and McDonald, M. (2006) Mapping Policy Preferences II: Estimates for Parties, Electors, and Governments in Central and Eastern Europe, European Union, and OECD 1990-2003. Oxford: Oxford University Press.Google Scholar
Leiter, A., Parolini, A. and Winner, H. (2011) Environmental Regulation and Investment: Evidence from European Industry Data. Ecological Economics 70(5): 759–770.Google Scholar
Li, Q. and Reuveny, R. (2006) Democracy and Environmental Degradation. International Studies Quarterly 50(4): 935–956.Google Scholar
López-Menéndez, A., Pérez, R. and Moreno, B. (2014) Environmental Costs and Renewable Energy: Revisiting the Environmental Kuznets Curve. Journal of Environmental Management 145(1): 368–373.Google Scholar
López, R., Galinato, G. and Islam, A. (2011) Fiscal Spending and the Environment: Theory and Empirics. Journal of Environmental Economics and Management 62(2): 180–198.Google Scholar
López, R. and Palacios, A. (2014) Why has Europe Become Environmentally Cleaner? Decomposing the Roles of Fiscal, Trade and Environmental Policies. Environmental and Resource Economics 58(1): 91–108.Google Scholar
Maleyeff, J. (2003) Benchmarking Performance Indices: Pitfalls and Solutions. Benchmarking: An International Journal 10(1): 9–28.Google Scholar
Marshall, M. and Jaggers, K. (2015) Polity IV Individual Country Regime Trends, 1946-2013. MD: Center for Systemic Peace, University of Maryland.Google Scholar
Menyah, K. and Wolde-Rufael, Y. (2010) Energy Consumption, Pollutant Emissions and Economic Growth in South Africa. Energy Economics 32(5): 1374–1382.Google Scholar
Neumayer, E. (2002) Do Democracies Exhibit Stronger International Environmental Commitment? A Cross-Country Analysis. Journal of Peace Research 39(2): 139–164.Google Scholar
Oates, W. (1995) Green Taxes: Can we Protect the Environment and Improve the Tax System at the Same Time? Southern Economic Journal 61(4): 915–922.Google Scholar
OECD (1999) Economic Instruments for Pollution Control and Natural Resource Management in OECD Countries: A Survey. Paris: OECD.Google Scholar
OECD (2008) Environmentally Related Taxes and Tradable Permit Systems in Practice. Paris: OECD.Google Scholar
Patuelli, R., Nijkamp, P. and Pels, E. (2005) Environmental Tax Reform and the Double Dividend: A Meta-Analytical Performance Assessment. Ecological Economics 55(4): 564–583.Google Scholar
Plűmper, T. Troeger, V. and Manow, P.(2005) Panel Data Analysis in Comparative Politics: Linking Method to Theory. European Journal of Political Research 44(3): 327–354.Google Scholar
Perkins, R. and Neumayer, E. (2008) Fostering Environment-Efficiency Through Transnational Linkages? Trajectories of CO2 and SO2, 1980-2000. Environment and Planning A 40(12): 2970–2989.Google Scholar
Pigou, A. (1920) The Economics of Welfare. London: Macmillan.Google Scholar
Scruggs, L. (2001) Is There Really a Link Between Neo-Corporatism and Environmental Performance? Updated Evidence and New Data for the 1980s and 1990s. British Journal of Political Science 31(4): 686–692.Google Scholar
Scruggs, L. (2003) Sustaining Abundance: Environmental Performance in Industrial Democracies. Cambridge: Cambridge University Press.Google Scholar
Seale, J. and Regmi, A. (2006) Modelling International Consumption Patterns. Review of Income and Wealth 52(4): 603–624.Google Scholar
Seiford, L. and Zhu, J. (2002) Modelling Undesirable Factors in Efficiency Evaluation. European Journal of Operational Research 142(1): 16–20.Google Scholar
Selden, T. and Song, D. (1994) Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions? Journal of Environmental Economics and Management 27(2): 147–162.Google Scholar
Spilker, G. (2012a) Globalization, Political Institutions and the Environment in Developing Countries. New York: Routledge.Google Scholar
Spilker, G. (2012b) Helpful Organizations: Membership in Inter-Governmental Organizations and Environmental Quality in Developing Countries. British Journal of Political Science 42(2): 345–370.Google Scholar
Spoon, J. and Jensen, C. (2011) Testing the “Party Matters” Thesis: Explaining Progress Towards Kyoto Protocol Targets. Political Studies 59(1): 99–115.Google Scholar
Stavins, R. (2003) Experience with Market-Based Environmental Policy Instruments. In Mäler K. and Vincent J. (eds.), The Handbook of Environmental Economics. vol. 1 Amsterdam: Elsevier, 355–435.Google Scholar
Sterner, T. (2007) Fuel Taxes: An Important Instrument for Climate Policy. Energy Policy 35(12): 3194–3202.Google Scholar
Svendsen, G., Daugbjerg, C., Hjøllund, L. and Pedersen, A. (2001) Consumers, Industrialists, and the Political Economy of Green Taxation: CO2 Taxation in the OECD. Energy Policy 29(6): 489–497.Google Scholar
Tauchman, H. (2012) Partial Frontier Efficiency. Stata Journal 12(3): 461–478.Google Scholar
Thaker, J. and Leiserowitz, A. (2014) Shifting Discourses of Climate Change in India. Climatic Change 123(2): 107–119.Google Scholar
Tobler, W. (1970) A Computer Movie Simulating Urban Growth in the Detroit Region. Economic Geography 46(2): 234–240.Google Scholar
Triantafillou, P. (2007) Benchmarking in the Public Sector: A Critical Conceptual Framework. Public Administration 85(3): 829–846.Google Scholar
Tullock, G. (1967) Excess Benefit. Water Resources 3(2): 643–644.Google Scholar
Volkens, A., Lehmann, P., Merz, N., Regel, S. and Werner, A. (2013) The Manifesto Data Collection. Manifesto Project (MRG/CMP/MARPOR). Version 2013a. Berlin: Wissenschaftszentrum Berlin für Sozialforschung (WZB).Google Scholar
Ward, H. (2006) International Linkages and Environmental Sustainability: The Effectiveness of the Regime Network. Journal of Peace Research 43(2): 149–166.Google Scholar
Ward, H. (2008) Liberal Democracy and Sustainability. Environmental Politics 17(3): 386–409.Google Scholar
Ward, H. and Cao, X. (2012) Domestic and International Influences on Green Taxation. Comparative Political Studies 45(9): 1075–1103.Google Scholar
Winkler, H. and Marquand, A. (2009) Changing Development Paths: From an Energy-Intensive to Low-Carbon Economy in South Africa. Climate and Development 1(1): 47–65.Google Scholar
Winkler, H. and Marquand, A. (2011) Analysis of the Economic Implications of a Carbon Tax. Journal of Energy in Southern Africa 22(1): 55–68.Google Scholar
Zhou, P., Leng Poh, K. and Wah Ang, B. (2007) A Non-Radial DEA Approach to Measuring Environmental Performance. European Journal of Operational Research 178(1): 1–9.Google Scholar
Zhou, P., Wah Ang, B. and Han, J. (2010) Total Factor Carbon Emission Performance: A Malmquist Index Analysis. Energy Economics 32(1): 194–201.Google Scholar
Zhou, P., Wah Ang, B. and Leng Poh, K. (2006) Slacks-Based Efficiency Measures for Modeling Environmental Performance. Ecological Economics 60(1): 111–118.Google Scholar
Zhou, P., Wah Ang, B. and Leng Poh, K. (2008a) A Survey of Data Envelopment Analysis in Energy and Environmental Studies. European Journal of Operational Research 189(1): 1–18.Google Scholar
Zhou, P., Wah Ang, B. and Leng Poh, K. (2008b) Measuring Environmental Performance Under Different DEA Technologies. Energy Economics 30(1): 1–14.Google Scholar
Zofio, J. and Prieto, A. (2001) Environmental Efficiency and Regulatory Standards: The Case of CO2 Emissions from OECD Countries. Resource and Energy Economics 23(1): 63–83.Google Scholar
Supplementary material: PDF

Böhmelt et al supplementary material 1

Appendix

Download Böhmelt et al supplementary material 1(PDF)
PDF 39.6 MB