METRES · Modelling Environmental Tax Reform in Spain
Horizon 2020 — Marie Skłodowska-Curie Actions
- Duration
- 2016-07-01 → 2018-12-31
- EU contribution
- €199,159
- Participants
- 2
- Scheme
- MSCA-IF-GF
Lines connect the coordinator with its partners.
Results in brief
Modelling Environmental Tax Reform in Spain
An Environmental Tax Reform (ETR) is the switch of the national tax system from “classical economic taxes”, such as those on labour (personal income tax and social contributions), capital and consumption (VAT and indirect taxes) to taxes on environmental pressures and natural resources use, without necessarily affecting the overall revenues from taxation. This would provide better signals to economic agents leading to a better functioning of markets and therefore increasing welfare. The METRES (Modelling Environmental Tax Reform in Spain) project aims to evaluate the double dividend hypothesis for environmental taxation in Spain. This hypothesis claims that is possible to benefit the environment and at the same time the economy by transitioning towards an ETR. To do this, the researcher is developing a set of energy-environment-economic dynamic models. The overall objective of the project is to test the double dividend hypothesis for different forms of environmental taxation in Spain, and, more generally, provide proposals to reduce environmental problems with the use of economic instruments. The project started in July 2016, and it consists in an outgoing phase of 1.5 years in Harvard University (USA), working with Prof. Jorgenson and Dr. Mun Ho at the Department of Economics, and a return phase in ENT Environment and Management (Spain), working with Dr. Ignasi Puig. The overall conducted research has concluded with different dynamic economic-energy-environmental models developed for Spain. With these models, different fiscal configurations have been tested. An Environmental tax reform, a carbon tax, energy taxes, waste taxes and productivity taxes. For all of them, current taxation and potential reforms have been tested. The double dividend hypothesis have been confirmed in many cases leading to a potential new way to implement fiscal policies. The action has concluded with six research articles and two more for dissemination purposes, among other actions.
Data: CORDIS, © European Union
Project objective
The METRES (Modelling Environmental Tax Reform in Spain) project aims to evaluate the “double dividend hypothesis” for environmental taxation in Spain. To do this, the researcher would develop an Intertemporal General Equilibrium Model (IGEM) to assess the economic and the environmental effects of an Environmental Tax Reform (ETR) and of some of the main environmental taxes in Spain at different administrative levels, as well as various proposed policy reforms. In a first phase of the research project, conducted at Harvard University (United States), the IGEM would be built, and a comprehensive ETR for Spain would be tested through the development of scenarios that consider the reduction of labour taxes in favour of environmental taxes. In a second phase, conducted at the policy-oriented (and research-oriented) consultancy and SME Serveis de Suport a la Gestió, SL (ENT Environment and Management) (Spain), three currently existing environmental taxes in Spain, at three different administrative levels, would be tested in the developed model. After that, one scenario that improves the effects for each tax would be developed. Finally, some policy measures would be proposed, including possible changes to configuration and regulation of the analysed taxes. The three environmental taxes assessed would be: at national level, the tax on electricity; at regional level, the tax on landfill and incineration of waste in Catalonia, and at local level, the vehicle circulation tax. In the first case, taxation on electricity was recently modified and these changes need to be evaluated. In the second case, this municipal solid waste tax at regional level has become a successful case study and has received international attention. Finally, the Spanish Parliament already in 2007 passed a resolution asking for the revision of the local vehicle circulation tax. This methodology is widely used by the US Environmental Protection Agency (EPA) and improves previous existing CGE methods.
Original text from CORDIS.
Participants
- SERVEIS DE SUPORT A LA GESTIO SL · Vilanova I La GeltruCoordinatorSpain
- PRESIDENT AND FELLOWS OF HARVARD COLLEGE · CambridgeUnited States
Links
Data: CORDIS, © European Union