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Book part
Publication date: 2 September 2020

Gamze Yıldız Şeren Kurular

Introduction – As a financial instrument, tax has always been one of the policy support instruments that governments apply to solve problems. The issue of the environment…

Abstract

Introduction – As a financial instrument, tax has always been one of the policy support instruments that governments apply to solve problems. The issue of the environment, on the other hand, is a notion that has gained more importance over the past years and governments struggle to create solutions to environmental problems on the global scale. Climate change is one of the most important parts of this issue. Especially in our modern day, as a result of natural disasters, forest fires and landslides, climate change has become a field in which serious political measures should be taken. Although it has become necessary to implement tax as a tool to decrease carbon emissions and to open new fields for works with less carbon emission, the expected/desired results about carbon emissions have not been obtained throughout the world.

Purpose – The aim of this chapter is to examine carbon taxes, which are the tax applied against climate change, and to draw attention to the multiple policy approach in the face of global environmental problems.

Methodology – This chapter, in which qualitative research method is adopted, has descriptive elements. In this context, an evaluation has been put forward in the light of the data obtained from various reports and scientific articles.

Findings – Though tax is indeed considered as an effective political tool among the precautions to be taken, one-dimensional approach might bring along a deadlock in the solution of this problem. In order to improve this approach and the perception towards the environment across society, it is necessary to include other factors that can play an important role in this process such as non-governmental organisations. Consequently, in order to solve the environmental problems which have occurred as a result of human activities, it is essential to minimise the destruction caused by these human activities (although it is not possible to restore it completely). Therefore, a multi-dimensional policy instead of a one-dimensional policy, an environmentally conscious society and state, and cooperation of policy actors on a global scale are basic elements which can play an important role in the solution of the problem.

Details

Contemporary Issues in Business Economics and Finance
Type: Book
ISBN: 978-1-83909-604-4

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Article
Publication date: 22 October 2020

Chuanxu Wang, Qiaoyu Peng and Lang Xu

This paper aims to explore how upstream supply chain companies will control the carbon emissions and price decisions of products when the government implements…

Abstract

Purpose

This paper aims to explore how upstream supply chain companies will control the carbon emissions and price decisions of products when the government implements environmental tax policy on consumers. It provides some suggestions to control carbon emissions for the government and manufacturers.

Design/methodology/approach

This study establishes two-echelon Stackelberg game models with and without the implementation of environmental tax policy on consumers in a centralized scenario and a decentralized scenario. Through the comparative analysis of the four models, the optimal emission abatement and pricing strategies are obtained.

Findings

This paper concludes that implementing environmental tax policy on consumers within the market’s acceptable range is more beneficial to the retailer and the environment, as well as the overall social welfare, except for the manufacturer. Moreover, consumer’s low-carbon preference always has a broader impact on carbon abatement and corporate profits than environmental tax coefficient. Finally, the side-payment self-executing contract can effectively ensure that the supply chain members make rational decisions spontaneously while achieving a win-win solution of centralized scenario.

Originality/value

This paper first considers how the government’s environmental tax policy on consumers will affect the decision-making of supply chain companies, and proposes an improved side-payment self-enforcing contract to maximize environmental and economic benefits of centralized scenario. In addition, it provides a reference for the government to adopt both the carbon cap policy and the environmental tax policy.

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Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 28 January 2020

Jayanthi Kumarasiri and Sumit Lodhia

This study aims to explore how large Australian companies in emission intensive industries perceived the introduction of the Carbon Tax as an approach to carbon emissions…

Abstract

Purpose

This study aims to explore how large Australian companies in emission intensive industries perceived the introduction of the Carbon Tax as an approach to carbon emissions regulation and as a tool for accountability. It also investigates the influence of perceptions of the new tax on the internal carbon emissions management practices and the motivations for such actions.

Design/methodology/approach

This study draws on transaction cost theory and legitimacy theory to address corporate perceptions, responses and motivations in relation to the Carbon Tax. Semi-structured interviews were conducted with 18 senior managers directly responsible for the carbon emissions management of their companies.

Findings

The study found that the Carbon Tax, viewed by the high-emitting companies as a heavy financial burden, had a significant influence on moderating organisational legitimacy seeking behaviours. It is evident that the transaction cost issues in the form of the carbon pricing requirement has led to a change of focus to “management” rather than merely reporting to external stakeholders. This influenced companies to change their behaviour with the potential to internalise previous externalities of carbon pollution.

Research limitations/implications

This research highlights that a pricing signal in emissions regulations is essential in conjunction with external pressures to effectively stimulate emissions management actions in companies. It extends our understanding of legitimacy theory by suggesting that a mandatory pricing mechanism as explained by transaction cost economics has the potential to lead to actual changes in corporate behaviour through a focus on management rather than reporting.

Practical implications

The study highlights the important elements of any effective emissions policy designed to encourage strong emissions management actions from companies. Based on the findings of the study, it is evident that the Carbon Tax was a very effective mechanism in driving emission management actions, despite the general perception that any deficiencies associated with such a price mechanism could have a negative effect on the economy.

Social implications

Climate change is a critical issue for the modern society and this study discussed a short-lived policy tool in the Australian context that had the potential to change corporate behaviour in relation to carbon management.

Originality/value

This study is among the very few studies that have examined the influence of the Carbon Tax on internal emissions management practices of companies, and therefore, provides a unique dataset of corporate responses to the Carbon Tax. Given the short time frame that the Carbon Tax was in operation, the study enhances our understanding of the influence the Carbon Tax had on companies responsible for high greenhouse gas emissions.

Details

Meditari Accountancy Research, vol. 28 no. 3
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 1 November 2019

Gaoyuan Qin, Fengming Tao, Lixia Li and Zhenyu Chen

In order to reduce logistics transportation costs and respond to low-carbon economy, the purpose of this paper is to study the more practical and common simultaneous…

Abstract

Purpose

In order to reduce logistics transportation costs and respond to low-carbon economy, the purpose of this paper is to study the more practical and common simultaneous pickup and delivery vehicle routing problem, which considers the carbon tax policy. A low-carbon simultaneous pickup and delivery vehicle routing problem model is constructed with the minimum total costs as the objective function.

Design/methodology/approach

This study develops a mathematical optimization model with the minimum total costs, including the carbon emissions costs as the objective function. An adaptive genetic hill-climbing algorithm is designed to solve the model.

Findings

First, the effectiveness of the algorithm is verified by numerical experiments. Second, the research results prove that carbon tax mechanism can effectively reduce carbon emissions within effective carbon tax interval. Finally, the research results also show that, under the carbon tax mechanism, the effect of vehicle speed on total costs will become more obvious with the increase of carbon tax.

Research limitations/implications

This paper only considers the weight of the cargo, but it does not consider the volume of the cargo.

Originality/value

Few studies focus on environmental issues in the simultaneous pickup and delivery problem. Thus, this paper constructs a green path optimization model, combining the carbon tax mechanism for the problem. This paper further analyzes the impact of carbon tax value on total costs and carbon emission; at the same time, the effect of vehicle speed on total cost is also analyzed.

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Article
Publication date: 5 February 2018

Qing Liu, Senlin Zhao and Qinghua Zhu

The purpose of this paper is to extend game analysis to explore decision-making mechanisms for promoting a specific type of products, low energy consumption for individual…

Abstract

Purpose

The purpose of this paper is to extend game analysis to explore decision-making mechanisms for promoting a specific type of products, low energy consumption for individual one while the total energy consumption is huge due to the high quantity of sales, that is, low for individual and high for total (LIHT) in terms of energy consumption.

Design/methodology/approach

Game models are developed to compare decisions of optimal prices for newly developed and environmentally friendly (NDEF) and regular products as well as associated sales quantity, profits, carbon emissions under different governmental policies, along with a case of low energy-intensive broadband terminal products in the Chinese telecommunication industry under the carbon tax and subsidy policies.

Findings

For both NDEF and regular products, optimal prices decrease under the subsidy policy while both increase under the tax policy. Manufacturers’ decision of optimal prices is highly relevant with unit carbon tax/subsidy and the consumers’ preference. Both the tax and subsidy policies can improve consumption of NDEF products while the subsidy policy can be more effective at the current initial stage.

Research limitations/implications

This paper provides decision support for manufacturers to promote sustainable consumption of LIHT products. Research ideas on models development and solutions for optimal prices can be applied to other LIHT products.

Practical implications

The results provide insights for governments on how to effectively evaluate and motivate sustainable consumption for LIHT products.

Originality/value

This paper first explores how to motivate sustainable consumption of LIHT products by developing models, examining effectiveness of potential governmental policies as well as associated carbon emissions.

Details

Industrial Management & Data Systems, vol. 118 no. 1
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 10 November 2014

Le Luo and Qingliang Tang

This paper aims to investigate the impact of the proposed carbon tax on the financial market return of Australian firms. It also considers the differential tax effect on…

Abstract

Purpose

This paper aims to investigate the impact of the proposed carbon tax on the financial market return of Australian firms. It also considers the differential tax effect on individual firms with different carbon profiles, including factors such as emissions costs, carbon disclosure and climate-change policies.

Design/methodology/approach

Utilising the event-study method, the authors examine the market reaction to seven key carbon legislative information events that occurred from February 2011 to November 2011. The sample includes 48 different firms whose emissions-related data are available from Carbon Disclosure Project reports; thus, 336 firm-event observations are used for the cross-sectional analysis.

Findings

The paper documents evidence that the proposed tax has an overall negative impact on shareholder wealth as measured by abnormal returns. The negative impact varies across sectors, with the most significant effect found in the materials, industrial and financial sectors. It was also found that a firm’s direct carbon exposure (as measured by Scope 1 emissions) is significantly associated with abnormal returns, whereas the indirect exposure (as measured by Scope 2 emissions) is not, because Scope 2 emissions are not covered by the tax. In addition, the findings suggest that the information content of the events is more notable during the early stages of the development of the carbon tax.

Research limitations/implications

The sample is restricted to the largest firms with relevant carbon profile information. Thus, caution should be exercised when generalising the inferences.

Practical implications

The introduction of the carbon tax was largely unexpected and most firms were unprepared for it; thus, their carbon policy appears inadequate and does not impress investors. An understanding of how the carbon tax affects shareholder value and welfare will encourage management to take proactive actions to mitigate the compliance costs of carbon legislation.

Originality/value

The enactment of the Australian carbon tax perhaps represents one of the biggest social and economic restructuring events in the country’s history. Our results offer initial insight into its impact and suggest that investors would penalise firms with heavy direct operational emissions. In addition, Australian corporate carbon policy seems inadequate, so does not reverse the negative effect of the tax on the value of a firm.

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Article
Publication date: 1 January 2006

Margery Stapleton, Helena Lenihan, Sheila Killian, Breda O'Sullivan and Kemmy Business

Under the Kyoto Protocol Ireland is committed to ensuring that its greenhouse gas emission levels are at or below 113 per cent of 1990 levels for the years 2008–2012…

Abstract

Under the Kyoto Protocol Ireland is committed to ensuring that its greenhouse gas emission levels are at or below 113 per cent of 1990 levels for the years 2008–2012. Irish emissions have already exceeded this limit by approximately 10 to 15 per cent and must be reduced if the Kyoto Protocol targets are to be met. In this context, and drawing on relevant theory and research, this paper discusses the rationale for, and the potential impact of, government intervention in the market for carbon dioxide (CO2) emissions. The use of a Carbon Tax as a policy tool in reducing CO2 emissions is examined from both economic and taxation perspectives. Particular attention is paid to the Irish National Climate Change Strategy formulated in 2000 and the consultation process on implementing a Carbon Tax initiated by the Department of Finance in 2003. In September 2004 the Irish Government decided not to implement the proposed Carbon Tax. Submissions from interested parties on the carbon tax consultation process are reviewed against the rationale for implementation of such a tax. The body of evidence presented in this paper supports the implementation of a Carbon Tax—suggesting that the decision not to implement such a tax may have been a lost opportunity. The paper argues that a well‐designed Carbon Tax for Ireland, a simple levy on a close proxy for emissions, would be effective in influencing taxpayer behaviour bringing about a reduction in Ireland's CO2 emissions and supporting the polluter pays principle. In the absence of a carbon tax Ireland's Kyoto target is unlikely to be met and the consequent financial penalties will fall on all taxpayers. The paper concludes that the Irish Government should revisit this decision.

Details

Social Responsibility Journal, vol. 2 no. 1
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 6 June 2016

Shihui Yang and Jun Yu

The purpose of this study is to help governments make carbon-tax policy and help enterprises make decisions under that policy.

Abstract

Purpose

The purpose of this study is to help governments make carbon-tax policy and help enterprises make decisions under that policy.

Design/methodology/approach

Based on the carbon-tax policy, with the consideration of consumers’ low-carbon preferences, this paper compares the pricing, emission reduction and advertising decisions in three different games (one centralized game and two decentralized Stackelberg games).

Findings

This paper concludes that, through centralized game, namely, cooperation game, manufacturers, retailers and consumers can reach their optimal situation. In the numerical simulation, this paper analyzes the impact of carbon-tax rate to the decisions of manufacturer and retailer, as well as their profit.

Originality/value

Using the Nash Bargaining Model, the introduction of the bargaining power and the degree of risk aversion of the parties, this study provides some solution for the distribution of the additional profit when they cooperate, in which way they can reach their Pareto optimality.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 9 no. 2
Type: Research Article
ISSN: 1754-4408

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Article
Publication date: 30 September 2020

Ye Duan, Zenglin Han and Hailin Mu

There are certain differences in the production products of enterprises. What are the impacts of product differentiation on the iron and steel industry? Based on the macro…

Abstract

Purpose

There are certain differences in the production products of enterprises. What are the impacts of product differentiation on the iron and steel industry? Based on the macro background of CO2 emission reduction, this paper aims to analyze the economic benefits and environmental changes of the iron and steel industry under the dual influence of CO2 emission reduction policy and product differentiation policy.

Design/methodology/approach

Taking the basic data of iron and steel industry in six regions of China as an example, this paper constructed an extended two-stage dynamic game model to analyze the impact of product differentiation and carbon tax policy on the production, economic indicators and CO2 emission levels for the overall industry and regional enterprises.

Findings

As the CO2 emission reduction target increased, the unit carbon tax and total tax increased, whereas the macro-environmental losses, social welfare, consumer surplus and outputs decrease. Emission reduction pressures and other economic indicators showed obvious regional differences. Differentiated products promoted various indicators of enterprises and industries; higher degrees of product differentiation resulted in greater promoting effects on economic indicators.

Originality/value

This paper constructed multiple emission reduction and production backgrounds, and discusses the impact of the comprehensive implementation of these policies, which has been practically absent in previous studies. The results of this study are consistent with the current industrial policy for stable production and environmental protection, and also provides a reference for the formulation of detailed policies in the future.

Details

International Journal of Climate Change Strategies and Management, vol. 12 no. 5
Type: Research Article
ISSN: 1756-8692

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Article
Publication date: 8 January 2018

Anestis Anastasiadis, Stavros Konstantinopoulos, Georgios Kondylis, Georgios A. Vokas and Maya Julien Salame

The purpose of this paper is to optimally operate a Smart Microgrid which is interconnected to the main grid so as to minimize expenditures associated with CO2 emissions…

Abstract

Purpose

The purpose of this paper is to optimally operate a Smart Microgrid which is interconnected to the main grid so as to minimize expenditures associated with CO2 emissions. Microgrids could come into play to aid the network through CO2 emission reduction while increasing their efficiency through local generation. For this purpose, a Smart Microgrid incorporating Distributed Energy Resources (DER), especially Renewable Energy Sources (RES), is operated optimally while keeping the CO2 emissions in check in order to minimize the financial burden from emissions stemming from the carbon tax. Since the network is assumed to be interconnected with the main grid, there is a consideration of the expected emissions associated with the imported energy.

Design/methodology/approach

An economic/environmental dispatch problem is mathematically formulated using an objective function and the constraints that it is subject to. The methodology is applied on a typical 17-bus test distribution network, representing a Hellenic LV network. Various carbon tax rates and their impact on the system marginal price are examined, in terms of their effect on distributed generation (DG) and as a second step, the effect of imposing lower carbon tax rates for micro-sources with the goal of benefitting from their more eco-friendly generation capabilities. In order to assess that benefit, hourly grid emissions coefficients are derived based on actual grid data.

Findings

The CO2 tax refund policy towards the DG owners can lead to optimal coverage of consumers, optimal financial result both for the DG owners and the operator and greater DG integration within the smart grid.

Originality/value

Greater DG integration within the smart grid by using a CO2 tax refund policy.

Details

Management of Environmental Quality: An International Journal, vol. 29 no. 1
Type: Research Article
ISSN: 1477-7835

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