Importer and Producer Petroleum Taxation A Geo-Political Model

We derive non-cooperative Nash equilibrium (NE) importer and exporter petroleum excise taxes given full within-group tax coordination, but no coordination between groups, assuming that importers do not produce and exporters do not consume petroleum, and petroleum consumption causes a global external...

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Bibliographic Details
Main Author: Strand, Jon
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2008
Series:IMF Working Papers
Subjects:
Oil
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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651 4 |a Russian Federation 
653 |a Energy: Demand and Supply 
653 |a Wealth 
653 |a Environmental Conservation and Protection 
653 |a Economics 
653 |a Oil prices 
653 |a Public finance & taxation 
653 |a Natural Disasters and Their Management 
653 |a Oil 
653 |a Investments: Energy 
653 |a Saving 
653 |a Climate 
653 |a Climate change 
653 |a Petroleum industry and trade 
653 |a Greenhouse gas emissions 
653 |a Energy: General 
653 |a Business Taxes and Subsidies 
653 |a Global Warming 
653 |a Consumption 
653 |a Prices 
653 |a Macroeconomics 
653 |a Macroeconomics: Consumption 
653 |a Investment & securities 
653 |a Taxation 
653 |a Oil, gas and mining taxes 
653 |a Greenhouse gases 
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520 |a We derive non-cooperative Nash equilibrium (NE) importer and exporter petroleum excise taxes given full within-group tax coordination, but no coordination between groups, assuming that importers do not produce and exporters do not consume petroleum, and petroleum consumption causes a global externality. The aggregate NE tax is found to consist of an externality component and an optimal tariff component, and exceeds the standard Pigou tax. The environmental component in isolation is however less than the Pigou tax. With Stackelberg tax setting, the leader's tax is higher than in the Ne, and the follower's tax lower, and the overall tax higher. We show that importers prefer to set a tax instead of an import quota, since exporters' optimal response to a quota is a higher tax. An optimal cap-and-trade scheme will thus fare worse than an optimal tax scheme for importers, and will imply greater petroleum consumption and carbon emissions. When exporters behave as a cartel satisfying demand at a fixed export price, exporters' optimal tax is higher, while importers tax rule is Pigouvian. Exporters then gain at the expense of importers