Regime-Dependent Environmental Tax Multipliers: Evidence from 75 Countries

doi:10.1596/1813-9450-9640

Publication:
Regime-Dependent Environmental Tax Multipliers: Evidence from 75 Countries

dc.contributor.author	Schoder, Christian
dc.date.accessioned	2021-04-29T14:35:40Z
dc.date.available	2021-04-29T14:35:40Z
dc.date.issued	2021-04
dc.description.abstract	This paper reviews the main transmission channels of an environmental tax reform shifting the tax burden from labor to carbon emission. The analysis uses a simple open-economy macro model and estimates dynamic environmental tax as well as personal income tax multiplier effects on output and employment for a panel of 75 highand low-income countries from 1994 to 2018. Tax policy changes are identified by cyclically adjusting the tax revenues. The estimated environmental tax multiplier effects on output range from 1 on impact to 1.8 at the peak. Personal income tax multipliers are slightly higher, ranging from 1.4 to 2.3. While income taxes reduce employment, environmental taxes do not. Environmental tax multipliers are highly regime dependent: they are close to zero or statistically insignificant unless taxes are increased when output contracts, fuel prices are high, the environmental tax levels are high, or the carbon intensity of output is low. Commodity trade-exposed countries face higher tax multipliers. This analysis concludes that, compared with income taxes, environmental taxes can be a less contractionary source of revenues to support the post-COVID-19 fiscal consolidation efforts, especially in countries that are at the beginning of their decarbonization efforts.	en
dc.identifier	http://documents.worldbank.org/curated/en/595141619447698449/Regime-Dependent-Environmental-Tax-Multipliers-Evidence-from-75-Countries
dc.identifier.doi	10.1596/1813-9450-9640
dc.identifier.uri	https://hdl.handle.net/10986/35520
dc.language	English
dc.publisher	World Bank, Washington, DC
dc.relation.ispartofseries	Policy Research Working Paper;No. 9640
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo
dc.subject	ENVIRONMENTAL TAX
dc.subject	INCOME TAX
dc.subject	TAX MULTIPLIER
dc.subject	REGIME DEPENDENCE
dc.subject	CARBON TAX
dc.subject	GREENHOUSE GAS EMISSIONS
dc.title	Regime-Dependent Environmental Tax Multipliers	en
dc.title.subtitle	Evidence from 75 Countries	en
dc.type	Working Paper	en
dc.type	Document de travail	fr
dc.type	Documento de trabajo	es
dspace.entity.type	Publication
okr.crossref.title	Regime-Dependent Environmental Tax Multipliers: Evidence from 75 Countries
okr.date.disclosure	2021-04-26
okr.date.doiregistration	2025-04-10T12:00:25.581355Z
okr.doctype	Publications & Research
okr.doctype	Publications & Research::Policy Research Working Paper
okr.docurl	http://documents.worldbank.org/curated/en/595141619447698449/Regime-Dependent-Environmental-Tax-Multipliers-Evidence-from-75-Countries
okr.guid	595141619447698449
okr.identifier.doi	10.1596/1813-9450-9640
okr.identifier.externaldocumentum	090224b08854a8bd_2_0
okr.identifier.internaldocumentum	33026247
okr.identifier.report	WPS9640
okr.imported	true	en
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/595141619447698449/pdf/Regime-Dependent-Environmental-Tax-Multipliers-Evidence-from-75-Countries.pdf	en
okr.statistics.combined	1846
okr.statistics.dr	595141619447698449
okr.statistics.drstats	602
okr.topic	Environment::Carbon Policy and Trading
okr.topic	Environment::Climate Change Mitigation and Green House Gases
okr.topic	Environment::Environmental Economics & Policies
okr.topic	Environment::Environmental Strategy
okr.topic	Macroeconomics and Economic Growth::Taxation & Subsidies
okr.unit	Macroeconomics, Trade and Investment Global Practice
relation.isSeriesOfPublication	26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery	26e071dc-b0bf-409c-b982-df2970295c87