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On the Choice of Tax Base to Reduce Greenhouse Gas Emissions in the Context of Electricity Generation

Fraser, Robert (2006) On the Choice of Tax Base to Reduce Greenhouse Gas Emissions in the Context of Electricity Generation. In: AARES Conference. . (Unpublished) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:5189)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided.

Abstract

This paper analyses the role of uncertain demand in determining the government’s choice

between an ad valorem and a specific base for its tax to reduce greenhouse gas emissions

in the electricity generating sector. Using a model of optimal capacity choice for a pricetaking

firm facing demand uncertainty it is shown that an ad valorem tax is more effective

in reducing emissions than its equivalent specific tax, although this benefit comes at the

cost of lower reliability of electricity supply. A numerical analysis provides a robust

finding that the ad valorem tax is expected to generate greater tax revenue, thereby

providing support for the choice of this tax base in situations where the extra tax revenue

can be used to compensate consumers for reduced reliability of supply.

Item Type: Conference or workshop item (Paper)
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions: Divisions > Kent Business School - Division > Kent Business School (do not use)
Depositing User: Robert Fraser
Date Deposited: 17 Sep 2008 10:36 UTC
Last Modified: 16 Nov 2021 09:43 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/5189 (The current URI for this page, for reference purposes)
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