Under What Conditions Does a Carbon Tax on Fossil Fuels Stimulate Biofuels?

Timilsina, Govinda R.; Csordas, Stefan; Mevel, Simon

dc.creator	Timilsina, Govinda R.
dc.creator	Csordas, Stefan
dc.creator	Mevel, Simon
dc.date	2012-03-19T18:02:31Z
dc.date	2012-03-19T18:02:31Z
dc.date	2011-06-01
dc.date.accessioned	2023-02-17T20:56:51Z
dc.date.available	2023-02-17T20:56:51Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110606142136
dc.identifier	http://hdl.handle.net/10986/3441
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244405
dc.description	A carbon tax is an efficient economic instrument to reduce emissions of carbon dioxide released from fossil fuel burning. Its impacts on production of renewable energy depend on how it is designed -- particularly in the context of the penetration of biofuels into the energy supply mix for road transportation. Using a multi-sector, multi-country computable general equilibrium model, this study shows first that a carbon tax with the entire tax revenue recycled to households through a lump-sum transfer does not stimulate biofuel production significantly, even at relatively high tax rates. This reflects the high cost of carbon dioxide abatement through biofuels substitution, relative to other energy substitution alternatives; in addition, the carbon tax will have negative economy-wide consequences that reduce total demand for all fuels. A combined carbon tax and biofuel subsidy policy, where part of the carbon tax revenue is used to finance a biofuel subsidy, would significantly stimulate market penetration of biofuels. Although the carbon tax and biofuel subsidy policy would cause higher loss in global economic output compared with the carbon tax with lump sum revenue redistribution, the incremental output loss is relatively small.
dc.language	English
dc.relation	Paper is funded by the Knowledge for Change Program (KCP),Policy Research working paper ; no. WPS 5678
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ANTHROPOGENIC EMISSIONS
dc.subject	ATMOSPHERE
dc.subject	BIOMASS
dc.subject	BUSINESS AS USUAL SCENARIO
dc.subject	CAPITAL INVESTMENTS
dc.subject	CARBON
dc.subject	CARBON ABATEMENT
dc.subject	CARBON DEBT
dc.subject	CARBON DIOXIDE
dc.subject	CARBON EMISSIONS
dc.subject	CARBON POLICIES
dc.subject	CARBON SOURCES
dc.subject	CARBON TAX
dc.subject	CARBON TAXES
dc.subject	CARBON-INTENSIVE MANUFACTURING
dc.subject	CHEMICALS
dc.subject	CLEAN ENERGY
dc.subject	CLEAN ENERGY TECHNOLOGIES
dc.subject	CLEANER PRODUCTION
dc.subject	CLIMATE
dc.subject	CLIMATE CHANGE
dc.subject	CLIMATE CHANGE MITIGATION
dc.subject	CLIMATE CHANGE MITIGATION POLICIES
dc.subject	CLIMATE POLICY
dc.subject	CLIMATE PROTECTION
dc.subject	CLIMATIC CHANGE
dc.subject	CO
dc.subject	CO2
dc.subject	COAL
dc.subject	COMBUSTION
dc.subject	COMPUTABLE GENERAL EQUILIBRIUM MODEL
dc.subject	COST OF CARBON
dc.subject	CRUDE OIL
dc.subject	CRUDE OIL PRICE
dc.subject	DEMAND FOR ENERGY
dc.subject	DIESEL
dc.subject	DISPOSABLE INCOME
dc.subject	DOMESTIC SUPPLY
dc.subject	DRIVERS
dc.subject	DRIVING
dc.subject	ECOLOGICAL ECONOMICS
dc.subject	ECOLOGICAL ZONES
dc.subject	EFFICIENCY IMPROVEMENTS
dc.subject	ELASTICITIES
dc.subject	ELASTICITY
dc.subject	ELASTICITY OF SUBSTITUTION
dc.subject	ELECTRICITY
dc.subject	ELECTRICITY GENERATION
dc.subject	ELECTRICITY SUPPLY
dc.subject	EMISSION
dc.subject	EMISSION POLICIES
dc.subject	EMISSION REDUCTION
dc.subject	EMISSION REDUCTION POTENTIAL
dc.subject	EMISSION TAX
dc.subject	EMISSIONS
dc.subject	EMISSIONS FROM FUEL
dc.subject	EMISSIONS FROM LAND-USE CHANGE
dc.subject	END-USE
dc.subject	ENERGY CONSUMPTION
dc.subject	ENERGY ECONOMICS
dc.subject	ENERGY EFFICIENCY
dc.subject	ENERGY INTENSITY
dc.subject	ENERGY INTENSIVE
dc.subject	ENERGY MIX
dc.subject	ENERGY SERVICE
dc.subject	ENERGY SOURCES
dc.subject	ENERGY TAX
dc.subject	ENERGY TRANSFORMATION
dc.subject	ENVIRONMENTAL BENEFITS
dc.subject	ENVIRONMENTAL DAMAGE
dc.subject	ENVIRONMENTAL IMPACTS
dc.subject	ENVIRONMENTAL POLICY
dc.subject	ENVIRONMENTAL PROTECTION
dc.subject	ENVIRONMENTAL RESEARCH
dc.subject	ETHANOL
dc.subject	FOREST
dc.subject	FOREST LAND
dc.subject	FORESTRY
dc.subject	FOSSIL ENERGY
dc.subject	FOSSIL FUEL
dc.subject	FOSSIL FUEL BURNING
dc.subject	FOSSIL FUELS
dc.subject	FUEL CONSUMPTION
dc.subject	FUEL PRICE
dc.subject	FUEL SUPPLY
dc.subject	FUEL TAX
dc.subject	GAS PRODUCTION
dc.subject	GASOLINE
dc.subject	GHG
dc.subject	GLOBAL CARBON TAX
dc.subject	GLOBAL ENERGY MIX
dc.subject	GLOBAL ENERGY SUPPLY
dc.subject	GREENHOUSE
dc.subject	GREENHOUSE GAS
dc.subject	GREENHOUSE GAS EMISSION
dc.subject	GREENHOUSE GAS EMISSION MITIGATION
dc.subject	GREENHOUSE GASES
dc.subject	HOUSEHOLD EXPENDITURES
dc.subject	HOUSEHOLD SECTOR
dc.subject	IMPACTS OF FUEL PRICE
dc.subject	INCOME TAXES
dc.subject	INTERNATIONAL ENERGY AGENCY
dc.subject	IPCC
dc.subject	LAND USE
dc.subject	LAND USE CHANGE
dc.subject	LIQUID FUELS
dc.subject	MITIGATION POTENTIAL
dc.subject	NATURAL GAS
dc.subject	NEGATIVE IMPACTS
dc.subject	NUCLEAR POWER
dc.subject	OILS
dc.subject	PETROLEUM PRICE
dc.subject	PETROLEUM PRODUCTS
dc.subject	POWER GENERATION
dc.subject	PRICE VOLATILITY
dc.subject	REFINED OIL
dc.subject	RENEWABLE ENERGY
dc.subject	RENEWABLE ENERGY SOURCES
dc.subject	ROAD
dc.subject	ROAD TRANSPORT
dc.subject	ROAD TRANSPORT SECTOR
dc.subject	TAX POLICY
dc.subject	TAX RATE
dc.subject	TAX RATES
dc.subject	TAX REVENUE
dc.subject	TAX REVENUES
dc.subject	TAXATION
dc.subject	TOTAL ENERGY DEMAND
dc.subject	TRANSPORT
dc.subject	TRANSPORT SECTOR
dc.subject	TRANSPORT SERVICES
dc.subject	TRANSPORTATION
dc.subject	TRANSPORTATION FUEL
dc.subject	TRUE
dc.subject	WELFARE FUNCTION
dc.title	Under What Conditions Does a Carbon Tax on Fossil Fuels Stimulate Biofuels?
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region
dc.coverage	The World Region