{ "title": "Too Much At Stake: Moving Ahead with Energy Price Reforms", "publication": "IMF Blog, July 31, 2014", "sourceUrl": "https://www.imf.org/en/blogs/articles/2014/07/31/too-much-at-stake-moving-ahead-with-energy-price-reforms", "canonical": "https://www.imf.org/en/blogs/articles/2014/07/31/too-much-at-stake-moving-ahead-with-energy-price-reforms", "overlayPath": "/en/blogs/articles/2014/07/31/too-much-at-stake-moving-ahead-with-energy-price-reforms/index.md", "summary": "Energy use delivers substantial economic benefits but drives major environmental harms, including:", "sections": [ { "heading": "Energy, environment, and macroeconomic implications", "content": "- Energy use delivers substantial economic benefits but drives major environmental harms, including:\n - Predicted global warming of \"around 3–4 degrees Celsius by the end of the century\".\n - Outdoor air pollution \"causing over three million premature deaths a year\".\n- These environmental impacts have macroeconomic implications that justify price-based policy responses.\n- The IMF applies its expertise in tax design and administration to advise how energy tax systems can ensure prices reflect adverse environmental impacts." }, { "heading": "Methodology and scope", "content": "- The IMF-developed approach:\n - Quantifies environmental damages in a \"sensible and reasonably simple\" way.\n - Is applied \"in over 150 countries\" to derive implications for efficient taxes on coal, natural gas, gasoline, and road diesel.\n - Calculates human health damages from air pollution by estimating population exposure to power plant and vehicle emissions and the associated increased risk of diseases (e.g., heart and lung diseases).\n- The methodology is flexible to accommodate alternative valuations (e.g., global warming damages, differing valuations of health risk) and is presented as a starting point for debate." }, { "heading": "Policy instruments and tax design recommendations", "content": "- General recommendations:\n - Focus on \"smarter taxes, not higher taxes.\"\n - Use environmental taxes or similar pricing instruments to \"get prices right\" by reflecting environmental side effects in energy prices.\n - Recycle revenues to lower other distortionary taxes or meet fiscal objectives, improving environmental and health outcomes while limiting macroeconomic costs.\n - Finance ministers have a central role in administration and in restructuring tax systems away from taxes \"likely to be most harmful for efficiency and growth, such as income taxes,\" toward carefully designed energy taxes.\n- Tax base recommendations:\n - Carbon emissions: price through levies on fossil fuel suppliers in proportion to a fuel’s carbon content, building off existing motor fuel taxes.\n - Local air pollution: levy similar charges on fuel supply, but provide credits/refunds for emissions capture (e.g., sulfur dioxide \"scrubbing\" at power plants) because net emissions determine damages.\n - Motor vehicles: charges on kilometers driven (varying with urban road class and time of day) are the most effective long-term solution for congestion; interim step is to reflect carbon, pollution, congestion, and accident risks in fuel taxes.\n- Tax rate recommendation:\n - Set rates \"in line with environmental damages\" so pricing ensures only environmental improvements with net benefits are induced." }, { "heading": "Key quantitative findings from the assessment", "content": "- Coal:\n - Carbon charges shown in Chart 1 amount to \"$3.3 per gigajoule of energy (about two-thirds of the average world price)\".\n - Air pollution damages exceed \"$10 per gigajoule\" in countries like China and Poland.\n - Air pollution damages are \"less than $1 per gigajoule\" in Australia and Chile.\n- Gasoline and road fuels:\n - Corrective taxes on gasoline are \"substantial across advanced, emerging, and developing countries\", driven more by congestion and accident costs than by air pollution and carbon emissions.\n- Aggregate global impacts of implementing corrective fossil fuel taxes (relative to the current situation):\n - Estimated reduction in global carbon emissions of \"23 percent\".\n - Save \"63 percent\" of fossil fuel pollution deaths.\n - Provide fiscal benefits averaging \"2.6 percent of countries’ gross domestic product\"." }, { "heading": "Framing and caveats", "content": "- Some controversies are acknowledged, including valuation of global warming damages and cross-country differences in valuing health risks.\n- The approach is described as a flexible starting point, not a definitive final settlement.\n\nIan Parry, July 31, 2014 — Too Much At Stake: Moving Ahead with Energy Price Reforms\n\n---\n\n Content in this bundle\n\n- 事关重大：推进能源价格改革; 作者：Ian Parry; iMFdirect博客； 2014年7月31日\n - 事关重大：推进能源价格改革; 作者：Ian Parry; iMFdirect博客； 2014年7月31日 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - 事关重大：推进能源价格改革; 作者：Ian Parry; iMFdirect博客； 2014年7月31日 (PDF){rel=\"external\" type=\"application/pdf\"}\n- 多くの効果がここに: 燃料改革を前進させる; イアン・パリー iMFdirect ブログ ２０１４年７月３１日掲載\n - 多くの効果がここに: 燃料改革を前進させる; イアン・パリー iMFdirect ブログ ２０１４年７月３１日掲載 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - 多くの効果がここに: 燃料改革を前進させる; イアン・パリー iMFdirect ブログ ２０１４年７月３１日掲載 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Ставки слишком высоки: проведение реформ цен на энергоносители; Иэн Перри; Блог iMFdirect\n - Ставки слишком высоки: проведение реформ цен на энергоносители; Иэн Перри; Блог iMFdirect (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Ставки слишком высоки: проведение реформ цен на энергоносители; Иэн Перри; Блог iMFdirect (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- new IMF book\n- https://www.imf.org/wp-content/uploads/2014/07/energy-pricing-blog.jpg\n\nSource: https://www.imf.org/en/blogs/articles/2014/07/31/too-much-at-stake-moving-ahead-with-energy-price-reforms" } ], "bullets": [ "[Markdown version](/en/blogs/articles/2014/07/31/too-much-at-stake-moving-ahead-with-energy-price-reforms/index.md)", "[Structured JSON version](/en/blogs/articles/2014/07/31/too-much-at-stake-moving-ahead-with-energy-price-reforms/index.json)", "[Bundle manifest](/en/blogs/articles/2014/07/31/too-much-at-stake-moving-ahead-with-energy-price-reforms/bundle-manifest.json)", "Authors: Ian Parry", "Published: July 31, 2014", "Energy use delivers substantial economic benefits but drives major environmental harms, including:", "These environmental impacts have macroeconomic implications that justify price-based policy responses.", "The IMF applies its expertise in tax design and administration to advise how energy tax systems can ensure prices reflect adverse environmental impacts.", "The IMF-developed approach:", "The methodology is flexible to accommodate alternative valuations (e.g., global warming damages, differing valuations of health risk) and is presented as a starting point for debate.", "General recommendations:", "Tax base recommendations:", "Tax rate recommendation:", "Coal:", "Gasoline and road fuels:", "Aggregate global impacts of implementing corrective fossil fuel taxes (relative to the current situation):", "Some controversies are acknowledged, including valuation of global warming damages and cross-country differences in valuing health risks.", "The approach is described as a flexible starting point, not a definitive final settlement.", "**事关重大：推进能源价格改革; 作者：Ian Parry; iMFdirect博客； 2014年7月31日**", "**多くの効果がここに: 燃料改革を前進させる; イアン・パリー iMFdirect ブログ ２０１４年７月３１日掲載**", "**Ставки слишком высоки: проведение реформ цен на энергоносители; Иэн Перри; Блог iMFdirect**", "[new IMF book](http://www.elibrary.imf.org/view/IMF071/21171-9781484388570/21171-9781484388570/21171-9781484388570.xml?highlight=true+&result=1&rskey=kHyJS5)", "[https://www.imf.org/wp-content/uploads/2014/07/energy-pricing-blog.jpg](https://www.imf.org/wp-content/uploads/2014/07/energy-pricing-blog.jpg)" ], "related": [ { "title": "事关重大：推进能源价格改革; 作者：Ian Parry; iMFdirect博客； 2014年7月31日", "role": "document", "sourceUrl": "http://www.imf.org/external/chinese/np/blog/2014/073114c.pdf", "summary": { "path": "/external/chinese/np/blog/2014/073114c.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/external/chinese/np/blog/2014/073114c.pdf", "mime": "application/pdf" } }, { "title": "多くの効果がここに: 燃料改革を前進させる; イアン・パリー iMFdirect ブログ ２０１４年７月３１日掲載", "role": "document", "sourceUrl": "http://www.imf.org/external/japanese/np/blog/2014/073114j.pdf", "summary": { "path": "/external/japanese/np/blog/2014/073114j.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/external/japanese/np/blog/2014/073114j.pdf", "mime": "application/pdf" } }, { "title": "Ставки слишком высоки: проведение реформ цен на энергоносители; 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