آیا مالیات کربن برای فقرا خوب است؟ تجزیه و تحلیل تعادل عمومی برای ویتنام

In December 2012 the Government of Vietnam implemented its first law on environmental taxation.1 The law mandated new taxes on coal, gasoline and other fossil fuels, pesticides, and some other products. As such it bears a strong similarity to carbon taxes being implemented or debated in other countries. Such taxes have far-reaching economic effects, so as in other countries, there is considerable uncertainty over their economic implications. It is likely that reaching their nominal objectives—reduced growth rates of emissions from carbon-based fuels—will also require changes in the structure of production, employment, wages, and prices, and that these changes in turn will affect the levels and distribution of household incomes. In trade-dependent low-income economies like Vietnam, therefore, the effort to reduce emissions raises additional concerns at points where it intersects with other primary targets of development policy. Do energy taxes alter the competitiveness of industries producing exports and import substitutes? Do they alter prospects for employment growth? What effects do they have on poverty? If adverse effects are sufficiently large, policymakers may be compelled to choose among development policy priorities. In this paper we evaluate the likely economic impacts and incidence of Vietnam’s environmental tax law. The scope of the law ensures that its impacts will be felt throughout the economy. Accordingly, we adopt a general equilibrium approach, taking account of known economic linkages among production activities, employment, wages, household incomes, consumer expenditures, trade, government revenues, and other important macroeconomic variables. This methodology facilitates a relatively complete assessment of the impacts and incidence of the tax. We quantify the consequences of the tax for production, employment, and wages—and consequently for household income and poverty. This in turn requires a discussion of some important parameters about which relatively little is known. Among these are elasticities of labor supply. The environmental tax affects real wages through a number of channels, and the effect of real wage changes on labor supply determines aggregate employment effects as well as contributing to distributional and poverty outcomes. Our examination of the labor supply issue is threaded throughout the paper. Environmental policy issues in Vietnam have received limited prior attention from a general equilibrium perspective. El Obeid, Van der Mensbrugghe, and Dessus (2002, chap. 9) used a small general equilibrium model to examine the structural effects of trade policy reforms and environmental policy initiatives, focusing on measuring changes in emissions of air and water pollution and solid waste, but did not explore welfare and distributional questions. In a concurrent study Willenbockel (2011), using a smaller version of the database that we do, explores structural impacts of the environmental tax law. His study includes a helpful exploration of the longer-run issue of tax-induced substitution among energy sources as well as careful predictions of environmental outcomes. We complement this approach by focusing on welfare issues arising from the incidence of the tax as transmitted through factor markets and alternative fiscal mechanisms, and map results to a complete household survey database. In doing so, as noted above, we draw attention to incipient tradeoffs among development policy goals. The remainder of the paper proceeds as follows. In Section 2 we review relevant tax incidence concepts and theory. Section 3 introduces the model and its main datasets. We describe the environmental tax simulation experiment in Section 4, and discuss the results in Section 5. In a final section we draw some conclusions and identify areas for future research.

In December 2012 the Government of Vietnam implemented its first law on environmental taxation.1 The law mandated new taxes on coal, gasoline and other fossil fuels, pesticides, and some other products. As such it bears a strong similarity to carbon taxes being implemented or debated in other countries. Such taxes have far-reaching economic effects, so as in other countries, there is considerable uncertainty over their economic implications. It is likely that reaching their nominal objectives—reduced growth rates of emissions from carbon-based fuels—will also require changes in the structure of production, employment, wages, and prices, and that these changes in turn will affect the levels and distribution of household incomes. In trade-dependent low-income economies like Vietnam, therefore, the effort to reduce emissions raises additional concerns at points where it intersects with other primary targets of development policy. Do energy taxes alter the competitiveness of industries producing exports and import substitutes? Do they alter prospects for employment growth? What effects do they have on poverty? If adverse effects are sufficiently large, policymakers may be compelled to choose among development policy priorities. In this paper we evaluate the likely economic impacts and incidence of Vietnam’s environmental tax law. The scope of the law ensures that its impacts will be felt throughout the economy. Accordingly, we adopt a general equilibrium approach, taking account of known economic linkages among production activities, employment, wages, household incomes, consumer expenditures, trade, government revenues, and other important macroeconomic variables. This methodology facilitates a relatively complete assessment of the impacts and incidence of the tax. We quantify the consequences of the tax for production, employment, and wages—and consequently for household income and poverty. This in turn requires a discussion of some important parameters about which relatively little is known. Among these are elasticities of labor supply. The environmental tax affects real wages through a number of channels, and the effect of real wage changes on labor supply determines aggregate employment effects as well as contributing to distributional and poverty outcomes. Our examination of the labor supply issue is threaded throughout the paper. Environmental policy issues in Vietnam have received limited prior attention from a general equilibrium perspective. El Obeid, Van der Mensbrugghe, and Dessus (2002, chap. 9) used a small general equilibrium model to examine the structural effects of trade policy reforms and environmental policy initiatives, focusing on measuring changes in emissions of air and water pollution and solid waste, but did not explore welfare and distributional questions. In a concurrent study Willenbockel (2011), using a smaller version of the database that we do, explores structural impacts of the environmental tax law. His study includes a helpful exploration of the longer-run issue of tax-induced substitution among energy sources as well as careful predictions of environmental outcomes. We complement this approach by focusing on welfare issues arising from the incidence of the tax as transmitted through factor markets and alternative fiscal mechanisms, and map results to a complete household survey database. In doing so, as noted above, we draw attention to incipient tradeoffs among development policy goals. The remainder of the paper proceeds as follows. In Section 2 we review relevant tax incidence concepts and theory. Section 3 introduces the model and its main datasets. We describe the environmental tax simulation experiment in Section 4, and discuss the results in Section 5. In a final section we draw some conclusions and identify areas for future research.

Does the desire to contribute to a cleaner local and global environment conflict with other important development policy goals? In this paper we predict the broad economic impacts of a set of environmental taxes recently legislated in Vietnam. These predictions are based on simulation experiments with an applied general equilibrium model of the Vietnamese economy. Our approach has been to simulate the environmental taxes as ad valorem sales taxes on coal, gasoline, and other fuels. This approach is consistent with the most important features of the environmental tax legislation. Results from the model show counterfactual changes in variables such as prices, employment, incomes, and poverty. In order to evaluate the incidence of the taxes on household welfare, we have also posited that additional revenues be either spent on increased government consumption, or returned to households in the form of increases in the existing pattern of government transfers. Because these are taxes on energy, their effects on economic activity are pervasive. Transport sectors are especially affected, but these largely non-traded industries pass the tax burden forward to others. As a result, energy-dependent, export-oriented industries like seafood processing experience cost increases. Since their output prices are set in the world market, they also suffer declines in production, exports, and employment. These losses are then passed back to factor owners. Among factor markets, that for labor is the most important channel for translating changes in economic activity into changes in household welfare. We investigate this channel under the assumption that the supply of certain types of labor is responsive to real wage changes, and also (for comparison) under the ‘standard’ assumption of full employment and zero elasticity of labor supply response. The resulting differences in predicted changes in wages and aggregate employment map into contrasting household welfare changes. More important still is the decision by the government to return all additional tax revenues to households in the form of proportional increases in existing transfer payments. This leads to an outcome in which the environmental taxes reduce real GDP and aggregate employment by somewhat less than when the pattern of government expenditures remains unchanged. However, the transfer system is not strongly progressive, so the poorest households still experience substantial losses. The experiments thus yield mixed results for policy. The unilateral adoption of environmental taxes hurts a small economy’s competitiveness in global markets for a wide range of products. In the case of Vietnam, a low-income, labor-intensive economy, the losers include some of its largest and most labor-intensive export industries, even through these are not themselves highly energy-intensive in production. The losses they experience impede job growth, which is an important consideration in an economy where the labor force is still growing at more than 1.7% per year, adding about 900,000 new job-seekers each year.19 Significantly higher revenues enable government, in principle, to compensate poor households for losses shifted forward to them (as consumers) and backward to them (as factor owners). However, increasing the rate of existing transfers to households does not eliminate the losses of the poorest households, because it does not compensate for lost jobs. In the longer run, an economy responds to higher energy prices in multifarious ways; these include interfuel substitution, improvements in technology and efficiency, and many smaller adjustments in policy. Therefore the experimental results reported here, in which many other variables are held constant, are indicative but not conclusive predictions of real-world outcomes. However, they reveal some important but indirect channels of tax incidence, and because of this it is our view that they merit careful consideration at policy level. An initial reaction might be to regard the impending environmental taxes as a costly threat to continued economic growth and development in a lower-income economy. We do not support this conclusion, because other consequences of the taxes, not captured or valued in this model, have yet to be taken into account. To frame ongoing debate, we offer the following thoughts. First, although we can estimate likely reductions in the growth of industrial emissions, we lack the information necessary to assign valuations of the environmental benefits of the new taxes. These may take the form of reduced abatement costs (that is, costs associated with remediation of pollution, clean-up of water supplies, waste disposal, and so on), and also lower incidence of pollution-related damages to health. Studies in other developing countries indicate that particulate matter and gaseous emissions from industries and vehicles have large and costly impacts on human health, as well as reducing the productivity of labor. If environmental taxes reduce emissions growth, then they also deliver benefits in the form of a more healthy and productive workforce. These benefits should be taken into account when evaluating the net gains and losses from an environmental tax. Because we do not, our results may understate the gains from the new taxes. Second, in the absence of better information, we have assumed that revenue gains from the taxes are either spent on additional government consumption or on increases in existing transfers from government to households. These are useful mechanisms for the purpose of evaluating the incidence of the taxes themselves. But they are not by any means the only or the best way to dispose of additional revenues. The double dividend literature identifies improvements in the efficiency of the tax system as a second gain beyond the environmental benefits themselves (Bovenberg & Goulder, 1996). Distortionary taxes reduce social welfare; therefore, if revenue gains from environmental taxes (which themselves reduce distortions, by helping to correct pollution externalities) are used in budget-neutral fashion to reduce the rate of more distortionary taxes such as import tariffs or factor income taxes, then social welfare may improve. Once again, because we have not included such possibilities, our experiments may underestimate the potential social gains from the environmental taxes. Third, new tax revenues could also be used to offset cost increases in energy-intensive and/or employment-intensive industries. Our experiments show that tradable sectors in particular suffer contractions and job losses because they are unable to pass on tax-related cost increases. To minimize the impact on these industries, and therefore on national employment and export competitiveness, the Vietnamese government might consider using environmental tax receipts to compensate them, for example by means of a corporate tax rebate proportionate to their input cost increases. This revenue-recycling strategy is more narrowly targeted than that discussed in the previous paragraph, and as such bears substantial risks (for rent-seeking and corrupt practices) along with its potential gains. On the other hand, its potential for beneficial impacts on employment growth and export revenues may well justify such risks. Finally, since the lower emissions create a global externality (lower GHG emissions), there is a compelling case for compensation from the international community. In principle, this could be sufficient to fully compensate for the loss of aggregate income. The UN Clean Development Mechanism (CDM), established under the Kyoto Protocol, would seem to provide a vehicle for such compensation. The CDM allows Kyoto Protocol Annex I states (mainly OECD members) to sponsor emissions-reducing projects in non-Annex I states (mainly developing countries) as a way of helping meet their own GHG reduction commitments. More than 4,000 projects have been funded to date, and by raising about $18bn in direct carbon revenues over its 2001–12 implementation period, the CDM is the dominant emissions reduction mechanism for developing countries (World Bank, 2010: 262). Two issues remain, however. First, by themselves any transfers to Vietnam from the international community would no more address non-environmental development targets (such as job creation) than would compensation paid to households by the Vietnamese government—as discussed above. Second, to date all projects funded under the CDM have been linked to specific activities such as reafforestation, introduction of new technologies, fuel substitution, etc. We know of no project as yet funded that rewards a country for implementing emissions-reducing incentive mechanisms such as energy taxes. Indeed, the CDM Methodology Booklet (UNFCCC, 2010), which lists and describes hundreds of CDM-permissible methodologies for emissions reduction, contains no mention at all of taxes or other mechanisms based only on incentives to alter behavior. So deployment of the CDM in support of an environmental tax such as that legislated in Vietnam would seem also to require a substantial change in the mode of operation of that international mechanism.