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ID: 096124

Double dividend effectiveness of energy tax policies and the el: a CGE appraisal / Sancho, Ferran

Sancho, Ferran	Journal Article
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Publication

2010.

Summary/Abstract

There is a considerable body of literature that has studied whether or not an adequately designed tax swap, whereby an ecotax is levied and some other tax is reduced while keeping government income constant, may achieve a so-called double dividend, that is, an increase in environmental quality and an increase in overall efficiency. Arguments in favor and against are abundant. Our position is that the issue should be empirically studied starting from an actual, non-optimal tax system structure and by way of checking the responsiveness of equilibria to revenue neutral tax regimes under alternate scenarios regarding technological substitution. With the use of a CGE model, we find that the most critical elasticity for achieving a double dividend is the substitution elasticity between labor and capital whereas the elasticity that would generate the highest reduction in carbon dioxide emissions is the substitution elasticity among energy goods.

Key Words

Tax Reform ; Double Dividend ; Applied General Equilibrium

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ID: 099264

Rethinking economy-wide rebound measures: an unbiased proposal / Guerra, Ana-Isabel; Sancho, Ferran

Sancho, Ferran	Journal Article
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Publication

2010.

Summary/Abstract

In spite of having been first introduced in the last half of the ninetieth century, the debate about the possible rebound effects from energy efficiency improvements is still an open question in the economic literature. This paper contributes to the existing research on this issue proposing an unbiased measure for economy-wide rebound effects. The novelty of this economy-wide rebound measure stems from the fact that not only actual energy savings but also potential energy savings are quantified under general equilibrium conditions. Our findings indicate that the use of engineering savings instead of general equilibrium potential savings downward biases economy-wide rebound effects and upward-biases backfire effects. The discrepancies between the traditional indicator and our proposed measure are analysed in the context of the Spanish economy.

Key Words

Energy Efficiency ; Rebound Effect ; Rebound Evaluation

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