The document analyzes the impact of cigarette excise rate increases in Rwanda from 2008 to 2016. It finds that increasing excise taxes led to a 17.4% reduction in cigarette consumption, meeting the health ministry's target. Price elasticity of demand for cigarettes was estimated to be between -0.474 to -0.532, indicating that a 1% price increase reduces consumption by 0.474 to 0.532%. Imported cigarettes had a more negative price elasticity than domestic cigarettes. The study recommends continuing excise tax increases to further reduce smoking, while also tightening anti-smuggling measures to prevent tax revenue losses.
On July 1st, Ontario’s Cap and Trade Regulation went into force. This can have an enormous impact on businesses’ energy-based operating costs. Now is the time to determine what this means for your business.
Greece has committed to implementing several fiscal and structural reforms in consultation with European institutions. This includes adopting a supplementary 2015 budget and 2016-19 fiscal strategy targeting primary surpluses of 3.5% of GDP annually. Key measures include VAT reform to raise 1% of GDP, pension reforms to save 1/4-1/2% of GDP in 2015 and 1% annually thereafter, establishing an autonomous tax agency, and public administration reforms including wage bill ceilings. Greece also committed to healthcare reforms like drug price cuts and collecting clawbacks, as well as anti-corruption measures and strengthening tax administration.
The document outlines Greece's policy commitments and actions to be taken in consultation with European institutions, including adopting legislation and reforms in several key areas:
1. Adopting a supplementary 2015 budget and 2016-19 fiscal strategy with measures to achieve primary surpluses of 3.5% of GDP through 2019, including VAT reforms, tax measures, pension reforms, and reducing the military spending ceiling.
2. Implementing comprehensive pension reforms through 2022 to eliminate early retirement pathways, increase health contributions, and phase out exemptions to achieve permanent savings of 1/4-1/2% of GDP in 2015 and 1% of GDP annually from 2016 onward.
3. Enacting public administration reforms such as
The document summarizes a settlement agreement between El Paso Electric Company and intervening parties regarding a rate case. Key points:
1) El Paso Electric will receive an overall $37 million increase in base rates and other Texas revenues, effective January 12, 2016. An interim order is requested for bills on or after April 1, 2016.
2) Parties will litigate whether El Paso Electric should receive up to an additional $8 million associated with its interest in the Four Corners power plant.
3) Additions to electric plant in service from July 2009 through March 2015 are deemed reasonable except for the Newman Elevated Solar Facility.
4) The settlement sets out rate increases and adjustments for various
The document outlines fiscal and structural policy commitments and actions that Greece agrees to take in consultation with the European Commission, European Central Bank, and International Monetary Fund staff. This includes adopting a supplementary 2015 budget and 2016-2019 fiscal strategy with a primary surplus target. Key reforms include VAT reforms, pension reforms such as reducing early retirement benefits and increasing retirement ages, healthcare reforms like reducing drug prices, and tax reforms including closing tax loopholes and raising some corporate and income tax rates.
- Fuel excise and carbon taxes are effective tools to limit climate change but setting them proves politically challenging.
- Carbon taxes are on average close to zero for most fuels like coal and do not provide meaningful carbon pricing signals.
- Outside of road transport, the vast majority of emissions are untaxed, leaving little incentive to shift to cleaner energy sources.
The document analyzes the impact of cigarette excise rate increases in Rwanda from 2008 to 2016. It finds that increasing excise taxes led to a 17.4% reduction in cigarette consumption, meeting the health ministry's target. Price elasticity of demand for cigarettes was estimated to be between -0.474 to -0.532, indicating that a 1% price increase reduces consumption by 0.474 to 0.532%. Imported cigarettes had a more negative price elasticity than domestic cigarettes. The study recommends continuing excise tax increases to further reduce smoking, while also tightening anti-smuggling measures to prevent tax revenue losses.
On July 1st, Ontario’s Cap and Trade Regulation went into force. This can have an enormous impact on businesses’ energy-based operating costs. Now is the time to determine what this means for your business.
Greece has committed to implementing several fiscal and structural reforms in consultation with European institutions. This includes adopting a supplementary 2015 budget and 2016-19 fiscal strategy targeting primary surpluses of 3.5% of GDP annually. Key measures include VAT reform to raise 1% of GDP, pension reforms to save 1/4-1/2% of GDP in 2015 and 1% annually thereafter, establishing an autonomous tax agency, and public administration reforms including wage bill ceilings. Greece also committed to healthcare reforms like drug price cuts and collecting clawbacks, as well as anti-corruption measures and strengthening tax administration.
The document outlines Greece's policy commitments and actions to be taken in consultation with European institutions, including adopting legislation and reforms in several key areas:
1. Adopting a supplementary 2015 budget and 2016-19 fiscal strategy with measures to achieve primary surpluses of 3.5% of GDP through 2019, including VAT reforms, tax measures, pension reforms, and reducing the military spending ceiling.
2. Implementing comprehensive pension reforms through 2022 to eliminate early retirement pathways, increase health contributions, and phase out exemptions to achieve permanent savings of 1/4-1/2% of GDP in 2015 and 1% of GDP annually from 2016 onward.
3. Enacting public administration reforms such as
The document summarizes a settlement agreement between El Paso Electric Company and intervening parties regarding a rate case. Key points:
1) El Paso Electric will receive an overall $37 million increase in base rates and other Texas revenues, effective January 12, 2016. An interim order is requested for bills on or after April 1, 2016.
2) Parties will litigate whether El Paso Electric should receive up to an additional $8 million associated with its interest in the Four Corners power plant.
3) Additions to electric plant in service from July 2009 through March 2015 are deemed reasonable except for the Newman Elevated Solar Facility.
4) The settlement sets out rate increases and adjustments for various
The document outlines fiscal and structural policy commitments and actions that Greece agrees to take in consultation with the European Commission, European Central Bank, and International Monetary Fund staff. This includes adopting a supplementary 2015 budget and 2016-2019 fiscal strategy with a primary surplus target. Key reforms include VAT reforms, pension reforms such as reducing early retirement benefits and increasing retirement ages, healthcare reforms like reducing drug prices, and tax reforms including closing tax loopholes and raising some corporate and income tax rates.
- Fuel excise and carbon taxes are effective tools to limit climate change but setting them proves politically challenging.
- Carbon taxes are on average close to zero for most fuels like coal and do not provide meaningful carbon pricing signals.
- Outside of road transport, the vast majority of emissions are untaxed, leaving little incentive to shift to cleaner energy sources.
This document discusses carbon pricing mechanisms such as carbon taxes and emissions trading schemes that could be implemented in Indonesia to help achieve its emissions reduction targets. It provides an overview of Indonesia's NDC commitments and potential funding sources for emissions reductions. The key carbon pricing options for Indonesia are analyzed, including examples of how carbon taxes have been implemented in various countries. Overall, the document analyzes the potential for Indonesia to adopt carbon pricing policies to accelerate climate change mitigation efforts.
Ontario Cap & Trade - Time is Running Out for Small & Medium Business to SaveDuncan Rotherham
On July 1st, Ontario’s Cap and Trade Regulation went into force. This can have an enormous impact on businesses’ energy-based operating costs. Now is the time to determine what this means for your business.
Plan B 3.0 Audio Book Chapter 13 The Great Mobilization Start Loving
The document discusses the need for a massive global mobilization to transition the world economy away from fossil fuels to renewable energy sources in order to avoid catastrophic climate change. It argues that this transition requires establishing honest market prices that incorporate environmental costs by restructuring taxes. Specifically, it advocates lowering income taxes while raising taxes on polluting activities like carbon emissions. This would encourage investment in clean energy and make renewable options relatively cheaper. Examples of successful tax shifting from Europe and carbon pricing schemes around the world are provided.
This document discusses the need for a massive global mobilization to combat climate change similar to the US mobilization during WWII. It argues we must rapidly restructure the global economy to be powered by renewables, shift from fossil fuels to EVs, end deforestation, and incorporate environmental costs into pricing. Specific policies proposed include carbon taxes, ending subsidies for coal/oil, boosting renewables, and shifting retirement service overseas. Failure to act could lead to economic and societal collapse as environmental tipping points are passed.
This presentation created and addressed by Gonzalo Saenz de Miera in the intensive three day course from the BC3, Basque Centre for Climate Change and UPV/EHU (University of the Basque Country) on Climate Change in the Uda Ikastaroak Framework.
The objective of the BC3 Summer School is to offer an updated and multidisciplinary view of the ongoing trends in climate change research. The BC3 Summer School is organized in collaboration with the University of the Basque Country and is a high quality and excellent summer course gathering leading experts in the field and students from top universities and research centres worldwide.
This document outlines the U.S. Climate Action Plan's strategy to reduce methane emissions through 2030. Methane accounts for nearly 9% of U.S. greenhouse gas emissions currently, though emissions have decreased 11% since 1990. The strategy focuses on reducing emissions from key sources like landfills, coal mines, agriculture, and oil and gas using incentive-based and voluntary programs. It also aims to improve methane measurement to better inform reduction efforts.
A report released by the White House that outlines a plan to use the heavy hand of the federal government to restrict freedom of the American people in an unwise attempt to control methane emissions--that come mostly from cows and termites. So the answer, of course, is to screw the oil and gas industry.
Presentation by The Climate Trust's Executive Director, Sean Penrith, at the Northwest Legislators Carbon Policy Forum. Presentation includes: the basics of cap, tax and dividend; real world performance; Oregon's choices; and implications for the region and compliance with the Clean Power Plan.
In the final paper/presentation for HPL480: Environmental Policy & Econoimics, I argue that we should pursue Cap & Trade policies rather than a straight carbon tax.
This document discusses the challenges of transitioning to alternative energy sources and reducing fossil fuel emissions. It makes three key points:
1) Fossil fuel usage continues to rise significantly despite progress in alternative energy, and alternative energy is not growing fast enough to keep up with increasing energy demand.
2) There are physical limits to how quickly new energy technologies can be deployed at scale. Governments need long-term, stable policy frameworks to encourage changes to energy systems over time.
3) A carbon price policy can drive the implementation of emissions reductions projects over time, while complementary policies are needed to support new technologies like carbon capture and storage through research, demonstration projects, and preparation for deployment. However, additional policies
Seen as one of the most effective ways to reduce climate-damaging greenhouse gas (GHG) emissions and drive clean-tech investment, carbon pricing policies are being employed by governments around the globe...
This presentation gives an overview of the carbon pricing mechanism that has been announced by the Australian government. It talks about Australia’s pollution profile and emissions, the expected changes with a price on carbon, carbon tax versus emissions trading schemes, how the carbon price will work, the biggest polluters in Australia, the changes that will be implemented, the carbon pricing mechanism explained and the impact for companies.
From melting ice caps and rising sea levels to an increase in natural disasters and adverse health effects, the effects of global warming are vast and will continue to get worse if nothing is done reduce the amount of greenhouse gases emitted into the atmosphere. One of the main concerns is the health of humans as the earth warms. Injuries due to severe weather, respiratory problems due to bad air quality, and nutritional deficiencies due to food shortages are all expected to increase because greenhouse gases are warming the earth. The health of many people is being compromised by large emitters such as industrial businesses, but it is these businesses that contribute to a strong economy by employing many individuals. Therefore, completely eliminating these industries is not a wise economic choice. However, there is currently no incentive program to encourage these businesses to invest in methods to reduce the amount of greenhouse gases they emit. It is estimated that companies can reduce their rate of pollution by 20 to 50 percent while remaining profitable if there is a market to sell carbon credits. Continuing to generate profits while reducing the amount of pollution emitted into the atmosphere seems like an ideal solution, but with no market place to sell carbon credits there is no incentive for management to change the way their business operates
This summary outlines key points from a Congressional Budget Office presentation on the design of a revenue-neutral carbon tax:
- The presentation discusses various design considerations for a carbon tax, including how it would interact with existing regulations, the initial tax level and rate of increase, potential revenue raised, and economic and distributional impacts.
- Most studies find that a carbon tax would be regressive without considering how revenue is used, but the degree of regressivity varies. The ultimate distributional impact depends on how revenue is spent.
- Potential uses of revenue include reducing deficits, lowering other tax rates, and providing tax credits. Each option involves different tradeoffs between economic impacts, distributional effects, and incentives to reduce emissions
- Governments have committed to end inefficient fossil fuel subsidies over a decade ago but progress has been limited, with support fluctuating with fuel prices. Covid-19 provided an opportunity but green recovery spending has been outweighed by continued fossil fuel support.
- Reforming fossil fuel subsidies is difficult due to debates around what constitutes a subsidy and inefficiency, as well as economic and social concerns about price rises. However, the OECD provides tools and a sequential approach to identify subsidies and their impacts, and design alternative policies to alleviate distributional effects of reform. Gradual implementation anchored in emissions reduction and periodic review are also recommended.
The effectiveness of Local Content Policy in the Brazilian Petroleum Sector |...Diana Martínez-Prieto
This document discusses the effectiveness of local content policy in Brazil's petroleum sector. It provides an overview of local content policies internationally and in Brazil, outlining the evolution and key aspects of Brazil's policy. The policy aims to increase local industry participation, technological development, and job opportunities. However, the complex certification process and high fines for non-compliance impact investment decisions. Potential best practices to enhance the policy include developing commitments in phases, negotiated development plans, incentives over penalties, and simplifying certification. The overall goal is balancing local content promotion with investment promotion in oil production.
A Comparison of cap-and-trade vs. carbon tax regulation (December 2013)Ira Shatzmiller
This document provides an overview and comparison of different policy mechanisms for reducing greenhouse gas emissions, including command-and-control regulations, carbon taxes, and cap-and-trade systems. It discusses how both carbon taxes and cap-and-trade systems use a price on carbon to incentivize emissions reductions, but differ in whether they set a fixed price (tax) or fixed quantity (cap). While each approach has advantages and disadvantages depending on design, the document concludes that with proper design specifics, the two could achieve equivalent emissions reductions.
The document discusses transparency and oversight of political party financing. It finds that financial contributions to political parties are not fully transparent and are still vulnerable to political and foreign influence. Additionally, financial reports from political parties are not always publicly available or submitted on time according to regulations.
Summary of the OECD expert meeting: Construction Risk Management in Infrastru...OECD Governance
Presented at the OECD expert meeting "Construction Risk Management in Infrastructure Procurement: The Loss of Appetite for Fixed-Price Contracts", held on 17 May 2023 at the OECD, Paris and online.
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This document discusses carbon pricing mechanisms such as carbon taxes and emissions trading schemes that could be implemented in Indonesia to help achieve its emissions reduction targets. It provides an overview of Indonesia's NDC commitments and potential funding sources for emissions reductions. The key carbon pricing options for Indonesia are analyzed, including examples of how carbon taxes have been implemented in various countries. Overall, the document analyzes the potential for Indonesia to adopt carbon pricing policies to accelerate climate change mitigation efforts.
Ontario Cap & Trade - Time is Running Out for Small & Medium Business to SaveDuncan Rotherham
On July 1st, Ontario’s Cap and Trade Regulation went into force. This can have an enormous impact on businesses’ energy-based operating costs. Now is the time to determine what this means for your business.
Plan B 3.0 Audio Book Chapter 13 The Great Mobilization Start Loving
The document discusses the need for a massive global mobilization to transition the world economy away from fossil fuels to renewable energy sources in order to avoid catastrophic climate change. It argues that this transition requires establishing honest market prices that incorporate environmental costs by restructuring taxes. Specifically, it advocates lowering income taxes while raising taxes on polluting activities like carbon emissions. This would encourage investment in clean energy and make renewable options relatively cheaper. Examples of successful tax shifting from Europe and carbon pricing schemes around the world are provided.
This document discusses the need for a massive global mobilization to combat climate change similar to the US mobilization during WWII. It argues we must rapidly restructure the global economy to be powered by renewables, shift from fossil fuels to EVs, end deforestation, and incorporate environmental costs into pricing. Specific policies proposed include carbon taxes, ending subsidies for coal/oil, boosting renewables, and shifting retirement service overseas. Failure to act could lead to economic and societal collapse as environmental tipping points are passed.
This presentation created and addressed by Gonzalo Saenz de Miera in the intensive three day course from the BC3, Basque Centre for Climate Change and UPV/EHU (University of the Basque Country) on Climate Change in the Uda Ikastaroak Framework.
The objective of the BC3 Summer School is to offer an updated and multidisciplinary view of the ongoing trends in climate change research. The BC3 Summer School is organized in collaboration with the University of the Basque Country and is a high quality and excellent summer course gathering leading experts in the field and students from top universities and research centres worldwide.
This document outlines the U.S. Climate Action Plan's strategy to reduce methane emissions through 2030. Methane accounts for nearly 9% of U.S. greenhouse gas emissions currently, though emissions have decreased 11% since 1990. The strategy focuses on reducing emissions from key sources like landfills, coal mines, agriculture, and oil and gas using incentive-based and voluntary programs. It also aims to improve methane measurement to better inform reduction efforts.
A report released by the White House that outlines a plan to use the heavy hand of the federal government to restrict freedom of the American people in an unwise attempt to control methane emissions--that come mostly from cows and termites. So the answer, of course, is to screw the oil and gas industry.
Presentation by The Climate Trust's Executive Director, Sean Penrith, at the Northwest Legislators Carbon Policy Forum. Presentation includes: the basics of cap, tax and dividend; real world performance; Oregon's choices; and implications for the region and compliance with the Clean Power Plan.
In the final paper/presentation for HPL480: Environmental Policy & Econoimics, I argue that we should pursue Cap & Trade policies rather than a straight carbon tax.
This document discusses the challenges of transitioning to alternative energy sources and reducing fossil fuel emissions. It makes three key points:
1) Fossil fuel usage continues to rise significantly despite progress in alternative energy, and alternative energy is not growing fast enough to keep up with increasing energy demand.
2) There are physical limits to how quickly new energy technologies can be deployed at scale. Governments need long-term, stable policy frameworks to encourage changes to energy systems over time.
3) A carbon price policy can drive the implementation of emissions reductions projects over time, while complementary policies are needed to support new technologies like carbon capture and storage through research, demonstration projects, and preparation for deployment. However, additional policies
Seen as one of the most effective ways to reduce climate-damaging greenhouse gas (GHG) emissions and drive clean-tech investment, carbon pricing policies are being employed by governments around the globe...
This presentation gives an overview of the carbon pricing mechanism that has been announced by the Australian government. It talks about Australia’s pollution profile and emissions, the expected changes with a price on carbon, carbon tax versus emissions trading schemes, how the carbon price will work, the biggest polluters in Australia, the changes that will be implemented, the carbon pricing mechanism explained and the impact for companies.
From melting ice caps and rising sea levels to an increase in natural disasters and adverse health effects, the effects of global warming are vast and will continue to get worse if nothing is done reduce the amount of greenhouse gases emitted into the atmosphere. One of the main concerns is the health of humans as the earth warms. Injuries due to severe weather, respiratory problems due to bad air quality, and nutritional deficiencies due to food shortages are all expected to increase because greenhouse gases are warming the earth. The health of many people is being compromised by large emitters such as industrial businesses, but it is these businesses that contribute to a strong economy by employing many individuals. Therefore, completely eliminating these industries is not a wise economic choice. However, there is currently no incentive program to encourage these businesses to invest in methods to reduce the amount of greenhouse gases they emit. It is estimated that companies can reduce their rate of pollution by 20 to 50 percent while remaining profitable if there is a market to sell carbon credits. Continuing to generate profits while reducing the amount of pollution emitted into the atmosphere seems like an ideal solution, but with no market place to sell carbon credits there is no incentive for management to change the way their business operates
This summary outlines key points from a Congressional Budget Office presentation on the design of a revenue-neutral carbon tax:
- The presentation discusses various design considerations for a carbon tax, including how it would interact with existing regulations, the initial tax level and rate of increase, potential revenue raised, and economic and distributional impacts.
- Most studies find that a carbon tax would be regressive without considering how revenue is used, but the degree of regressivity varies. The ultimate distributional impact depends on how revenue is spent.
- Potential uses of revenue include reducing deficits, lowering other tax rates, and providing tax credits. Each option involves different tradeoffs between economic impacts, distributional effects, and incentives to reduce emissions
- Governments have committed to end inefficient fossil fuel subsidies over a decade ago but progress has been limited, with support fluctuating with fuel prices. Covid-19 provided an opportunity but green recovery spending has been outweighed by continued fossil fuel support.
- Reforming fossil fuel subsidies is difficult due to debates around what constitutes a subsidy and inefficiency, as well as economic and social concerns about price rises. However, the OECD provides tools and a sequential approach to identify subsidies and their impacts, and design alternative policies to alleviate distributional effects of reform. Gradual implementation anchored in emissions reduction and periodic review are also recommended.
The effectiveness of Local Content Policy in the Brazilian Petroleum Sector |...Diana Martínez-Prieto
This document discusses the effectiveness of local content policy in Brazil's petroleum sector. It provides an overview of local content policies internationally and in Brazil, outlining the evolution and key aspects of Brazil's policy. The policy aims to increase local industry participation, technological development, and job opportunities. However, the complex certification process and high fines for non-compliance impact investment decisions. Potential best practices to enhance the policy include developing commitments in phases, negotiated development plans, incentives over penalties, and simplifying certification. The overall goal is balancing local content promotion with investment promotion in oil production.
A Comparison of cap-and-trade vs. carbon tax regulation (December 2013)Ira Shatzmiller
This document provides an overview and comparison of different policy mechanisms for reducing greenhouse gas emissions, including command-and-control regulations, carbon taxes, and cap-and-trade systems. It discusses how both carbon taxes and cap-and-trade systems use a price on carbon to incentivize emissions reductions, but differ in whether they set a fixed price (tax) or fixed quantity (cap). While each approach has advantages and disadvantages depending on design, the document concludes that with proper design specifics, the two could achieve equivalent emissions reductions.
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The document discusses transparency and oversight of political party financing. It finds that financial contributions to political parties are not fully transparent and are still vulnerable to political and foreign influence. Additionally, financial reports from political parties are not always publicly available or submitted on time according to regulations.
Summary of the OECD expert meeting: Construction Risk Management in Infrastru...OECD Governance
Presented at the OECD expert meeting "Construction Risk Management in Infrastructure Procurement: The Loss of Appetite for Fixed-Price Contracts", held on 17 May 2023 at the OECD, Paris and online.
Using AI led assurance to deliver projects on time and on budget - D. Amratia...OECD Governance
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ECI in Sweden - A. Kadefors, KTH Royal Institute of Technology, Stockholm (SE)OECD Governance
This document discusses different construction project delivery and payment models. It begins by outlining common delivery models like design-bid-build and design-build. It then explains different payment methods that can be used like fixed price, unit prices, and cost-reimbursable. The document also discusses pricing strategies and how they relate to risk transfer between parties. It provides details on collaborative models like early contractor involvement and discusses selecting the optimal contract based on a client's project risks, desired influence, and market conditions.
Building Client Capability to Deliver Megaprojects - J. Denicol, professor at...OECD Governance
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This document discusses ECI Dutch experience with collaborative contracting. It mentions a McKinsey report from 2018 on collaborative contracting and recent developments in the field. Finally, it provides lessons learned from a project in Amsterdam called Bouwteam De Nieuwe Zijde Noord.
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Presentation of OECD Government at a Glance 2023OECD Governance
Paris, 30 June, 2023
Presentation by Elsa Pilichowski, Director for Public Governance, OECD.
The 2023 edition of Government at a Glance provides a comprehensive overview of public governance and public administration practices in OECD Member and partner countries. It includes indicators on trust in public institutions and satisfaction with public services, as well as evidence on good governance practices in areas such as the policy cycle, budgeting, procurement, infrastructure planning and delivery, regulatory governance, digital government and open government data. Finally, it provides information on what resources public institutions use and how they are managed, including public finances, public employment, and human resources management. Government at a Glance allows for cross-country comparisons and helps identify trends, best practices, and areas for improvement in the public sector.
See: https://www.oecd.org/publication/government-at-a-glance/2023/
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OECD Publication "Building Financial Resilience
to Climate Impacts. A Framework for Governments to manage the risks of Losses and Damages.
Governments are facing significant climate-related risks from the expected increase in frequency and intensity of cyclones, floods, fires, and other climate-related extreme events. The report Building Financial Resilience to Climate Impacts: A Framework for Governments to Manage the Risks of Losses and Damages provides a strategic framework to help governments, particularly those in emerging market and developing economies, strengthen their capacity to manage the financial implications of climate-related risks. Published in December 2022.
OECD presentation "Strengthening climate and environmental considerations in infrastructure and budget appraisal tools"
by Margaux Lelong and Ana Maria Ruiz during the 9th Meeting of the OECD Paris Collaborative on Green Budgeting held on 17 and 18 of April 2023 in Paris.
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This document summarizes developments in sovereign green bond markets. It discusses approaches to incorporating environmental, social, and governance (ESG) factors into public debt management. Sovereign green bond issuance has grown significantly in both advanced and emerging economies since 2016. Green bonds make up the largest share of the labeled bond market. Major benefits of sovereign green bonds include their positive impact on creditworthiness and alignment with ESG policies. However, issuers also face challenges such as additional costs and complexity of the issuance process. Common leading practices emphasize transparency, collaboration, and commitment to reporting.
Food safety, prepare for the unexpected - So what can be done in order to be ready to address food safety, food Consumers, food producers and manufacturers, food transporters, food businesses, food retailers can ...
Combined Illegal, Unregulated and Unreported (IUU) Vessel List.Christina Parmionova
The best available, up-to-date information on all fishing and related vessels that appear on the illegal, unregulated, and unreported (IUU) fishing vessel lists published by Regional Fisheries Management Organisations (RFMOs) and related organisations. The aim of the site is to improve the effectiveness of the original IUU lists as a tool for a wide variety of stakeholders to better understand and combat illegal fishing and broader fisheries crime.
To date, the following regional organisations maintain or share lists of vessels that have been found to carry out or support IUU fishing within their own or adjacent convention areas and/or species of competence:
Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR)
Commission for the Conservation of Southern Bluefin Tuna (CCSBT)
General Fisheries Commission for the Mediterranean (GFCM)
Inter-American Tropical Tuna Commission (IATTC)
International Commission for the Conservation of Atlantic Tunas (ICCAT)
Indian Ocean Tuna Commission (IOTC)
Northwest Atlantic Fisheries Organisation (NAFO)
North East Atlantic Fisheries Commission (NEAFC)
North Pacific Fisheries Commission (NPFC)
South East Atlantic Fisheries Organisation (SEAFO)
South Pacific Regional Fisheries Management Organisation (SPRFMO)
Southern Indian Ocean Fisheries Agreement (SIOFA)
Western and Central Pacific Fisheries Commission (WCPFC)
The Combined IUU Fishing Vessel List merges all these sources into one list that provides a single reference point to identify whether a vessel is currently IUU listed. Vessels that have been IUU listed in the past and subsequently delisted (for example because of a change in ownership, or because the vessel is no longer in service) are also retained on the site, so that the site contains a full historic record of IUU listed fishing vessels.
Unlike the IUU lists published on individual RFMO websites, which may update vessel details infrequently or not at all, the Combined IUU Fishing Vessel List is kept up to date with the best available information regarding changes to vessel identity, flag state, ownership, location, and operations.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
This report explores the significance of border towns and spaces for strengthening responses to young people on the move. In particular it explores the linkages of young people to local service centres with the aim of further developing service, protection, and support strategies for migrant children in border areas across the region. The report is based on a small-scale fieldwork study in the border towns of Chipata and Katete in Zambia conducted in July 2023. Border towns and spaces provide a rich source of information about issues related to the informal or irregular movement of young people across borders, including smuggling and trafficking. They can help build a picture of the nature and scope of the type of movement young migrants undertake and also the forms of protection available to them. Border towns and spaces also provide a lens through which we can better understand the vulnerabilities of young people on the move and, critically, the strategies they use to navigate challenges and access support.
The findings in this report highlight some of the key factors shaping the experiences and vulnerabilities of young people on the move – particularly their proximity to border spaces and how this affects the risks that they face. The report describes strategies that young people on the move employ to remain below the radar of visibility to state and non-state actors due to fear of arrest, detention, and deportation while also trying to keep themselves safe and access support in border towns. These strategies of (in)visibility provide a way to protect themselves yet at the same time also heighten some of the risks young people face as their vulnerabilities are not always recognised by those who could offer support.
In this report we show that the realities and challenges of life and migration in this region and in Zambia need to be better understood for support to be strengthened and tuned to meet the specific needs of young people on the move. This includes understanding the role of state and non-state stakeholders, the impact of laws and policies and, critically, the experiences of the young people themselves. We provide recommendations for immediate action, recommendations for programming to support young people on the move in the two towns that would reduce risk for young people in this area, and recommendations for longer term policy advocacy.
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2. • Choice of instruments: Environmental taxes (Prices) vs Cap&Trade
(Quantities)
• In practice, environmental taxes seem to be the most attractive choice for
most emerging markets. However, instrument mixes are valuable.
2
The rationale for environmental taxes
Taxes Cap & Trade
Higher certainty on costs,
higher uncertainty on outcomes
Higher uncertainty on costs,
higher certainty on outcomes
Collection is easier as it can rely on
existing capacities and institutions
Developing deep and liquid markets
is a challenge
General application
Issues of initial, and subsequent,
allocations
3. 1. Strategic complement for environmental policy.
2. Green revenue (better to tax bads than to tax goods)
• Choice of instruments: Prices vs Quantities (Weitzman)
– Quantities (Cap&Trade) give certainty to outcome, can have uncertain costs.
– Prices (environmental taxes) give certainty to costs, but outcomes may vary.
– Descentralized incentives: wider reaching than large emittors’ regulation or
markets, plus lower implementation costs. -Push and pull-
• Fiscal policy: raise revenue with minimum welfare loss.
– Ramsey rule: Low elasticity goods and services.
– Double dividend: Reduce negative externalities, and less DWL in others.
The rationale for environmental taxes.
3
5. • Part of a broad fiscal reform that was sent to Congress in 2013:
o A fixed amount per ton of CO2 content, for all fossil fuels.
o The tax was set at US$ 5.7 per ton of CO2 (average of most relevant
carbon markets: EU-ETS, California, New Zealand).
o Rates are adjusted annually for general inflation.
5
Mexico’s Carbon Tax
6. • Tax administration is straightforward:
o The carbon tax is paid at the production or import stages and can
be credited, except for the final sale (similar mechanics to a VAT).
o Collection and auditing is done by the revenue collection agency
(SAT), on the same terms as other excise taxes.
6
The Carbon Tax in Mexico
7. • Well received in Congress and was approved with some changes:
o Lower average carbon pricing (US$3.7 per ton of CO2).
o Natural gas was taxed at zero. Argument: cleanest fossil fuel.
o Only coal used as fuel is subject to the tax.
o The tax can be paid with internationally-recognized certificates of
emission reductions, at market values.
• To comply with international treaties, jet fuel is also taxed at zero (through
Executive decree).
7
The Carbon Tax in Mexico
8. Carbon tax in Mexico, taxing carbon content
8
fuel CO2 potenctal 2014 2015 2016 2017 2018
Combustible
Tons of CO2
per unit
Tax per unit
pesos
Tax per unit
pesos
Tax per unit
pesos
Tax per unit
pesos
Tax per unit
pesos
Gasolines 2.27 tons por m3 0.104 por litro 0.108 por litro 0.111 por litro 0.114 por litro 0.122 por litro
Diesel 2.64 tons por m3 0.126 por litro 0.131 por litro 0.134 por litro 0.138 por litro 0.148 por litro
Natural Gas 1.92 tons por m3 0.00 por litro 0.00 por litro 0.00 por litro 0.00 por litro 0.00 por litro
LPGas 1.68 tons por m3
0.059-0.077
por litro
0.061-0.080
por litro
0.063-0.082
por litro
0.065-0.084
por litro
0.069-0.090
por litro
Turbosine 2.60 tons por m3 0.124 por litro 0.129 por litro 0.132 por litro 0.136 por litro 0.145 por litro
Fuel Oil
3.00 - 3.01 tons por
m3
0.135 por litro 0.140 por litro 0.143 por litro 0.148 por litro 0.158 por litro
Cokes 3.27 tons por m3 0.156 por Kg 0.162 por Kg 0.166 por Kg 0.171 por Kg 0.183 por Kg
Coal
2.00 - 3.00 tons por
m3
0.275 por Kg 0.287 por Kg 0.293 por Kg 0.303 por Kg 0.323 por Kg
Fuente: SIE-SENER-INEGI-con informaciónde PEMEX.
* información hasta abril
9. Carbon tax results in Mexico: implementation challenges
9
REVENUES MINUS ACCREDITATIONS (first assesments)
Thousand million pesos
2014 2015 2016 2017 2018
Enero 0.0 1040.1 540.0 -1,249.9 450.7
Febrero 902.5 119.2 675.7 181.8 561.5
Marzo 663.4 495.6 588.6 200.4 347.5
Abril 882.1 738.3 674.8 8,491.3 xxx
Mayo 985.9 616.2 525.1 925.3
Junio 784.2 728.1 347.8 557.4
Julio 978.3 628.6 132.4 -1,190.7
Agosto 895.3 675.8 -220.6 548.8
Septiembre 886.6 452.5 -342.6 373.8
Octubre 952.7 632.5 -637.2 419.6
Noviembre 836.1 701.0 -612.7 523.3
Diciembre 903.3 820.7 -1,225.3 1,756.2
Anual 9,670.4 7,648.5 445.9 11,537.2 1,359.7
Bianual 17,318.9 8,094.4 11,983.1 12,896.9
Histórica 30,661.7
FUENTE: SHCP. Estadísticas Oportunas de Finanzas Públicas.
REVENUES MINUS ACCREDITATIONS (first correction estimates)
Miles de millones de pesos
2014 2015 2016 2017 2018
Enero 0.0 1,040.1 540.0 507.4 450.7
Febrero 902.5 119.2 675.7 359.5 561.5
Marzo 663.4 495.6 588.6 200.4 347.5
Abril 882.1 738.3 674.8 726.5
Mayo 985.9 616.2 525.1 543.0
Junio 784.2 728.1 584.1 557.4
Julio 978.3 628.6 597.7 392.9
Agosto 895.3 675.8 456.1 548.8
Septiembre 886.6 452.5 543.6 373.8
Octubre 952.7 632.5 461.0 419.6
Noviembre 836.1 701.0 693.5 523.3
Diciembre 903.3 820.7 317.6 172.6
Anual 9,670.4 7,648.5 6,657.8 5,325.2 1,359.7
Bianual 17,318.9 14,306.3 11,983.1 6,685.0
Histórica 30,661.7
10. • Law allows to pay in-kind with CER.
• Payment according to equivalent value of CERs, not equivalent
of tons reduced (discussion).
• Concrete way for “conditional” goals for NDCs.
• Mexican government would act as aggregator of supply, and purchasers
would own the CERs and comply with conditionality.
• Uses Clean Development Mechanism (CDM) registry and
verification process.
Paying the tax with certified emission reductions
11. • Support from domestic think tanks and NGOs was important in media and
policy discussions.
• Build on previous success. Mexican Congress had approved its Climate
Change Law in 2012, where carbon taxes were mentioned as potential
instruments.
• Having the “greenest” option (natural gas) taxed at zero increases political
acceptance (similar to the tax for pesticides, part of the same bill).
• Neighbors matter: lower fuel taxes in some neighboring countries reduced
maneuvering room.
• Constant discussion on earmarking, vs green expenditure.
11
First Policy lessons from the carbon tax
13. • Approved to start operating in 2014 (half rates) and 2015 (full rates):
o Acts in the space of an existing 0% VAT rate for agrochemicals.
o Environmental signaling needed to classify compounds according to
impact on human health and wildlife.
o World Health Organization (WHO) classification provides robust
environmental gradient.
o Environmental tax is defined as a percentage of value, instead of kg.,
because of monitoring complexity, and varies according to WHO and
Mexican classification of toxicity of pesticides.
13
Mexico’s Pesticide Tax
14. Environmental gradient for taxes
Route of exposure Category 1 Category 2 Category 3 Category 4 Category 5
Oral (mg/kg) 5 50 300 2000 5000
Dermal (mg/kg) 50 200 1000 2000
Inhalation Gases (ppmV) 100 500 2500 5000
Inhalation Vapours (mg/l) 0,5 2 10 20
Inhalator powders and mists (mg/l) 0,05 0,5 1 5
Note: This table is subject to updates of the Mexican Official Standard “NOM-232-SSA1-2009”.
Table 2:
Tax rates are established according to their acute toxicity hazard category:
[1] Source: Impuestos a los Plaguicidas (2014), SHCP: http://www.sat.gob.mx/fichas_tematicas/reforma_fiscal/Paginas/plaguicidas_2014.aspx
Table 1.
Acute toxicity hazard categories:
Toxicity Category
(OMS compatible)
Tax rate
2014 2015+
Ia & Ib 4.5% 9.0%
II 3.5% 7.0%
III 3.0% 6.0%
IV 0 0
15. High correlation between pesticides consumption and
intoxication cases.
0
100
200
300
400
500
600
700
800
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Consumo Aparente (tons) Registros de Intoxicaciones
Aggregate apparent consumption, tons per month Pesticides intoxication cases per month
16. Steady revenue collection,
Designed to decline as signal has effect
[1] Source: Impuestos a los Plaguicidas (2014), SHCP: http://www.sat.gob.mx/fichas_tematicas/reforma_fiscal/Paginas/plaguicidas_2014.aspx
Year
Total Revenue
(in millions of pesos)
2014 358.6
2015 606.9
2016 647.2
2017 705.2
2018 (jan-apr) 218.7
Total 2,536.6
17. Some shifts already observed
[1] Source: Impuestos a los Plaguicidas (2014), SHCP: http://www.sat.gob.mx/fichas_tematicas/reforma_fiscal/Paginas/plaguicidas_2014.aspx
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 Ene-Abr-17
Share of toxicity category in total
production plus imports
1 y 2 3 4 5
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2014 2015 2016 Ene-Abr.17
Millonesdepesos
Total pesticide tax revenues, by category
1 y 2 3 4
19. Mexico’s peer review on inefficient fossil fuel subsidies
19
• Part of the G20 commitment to phase-out fossil fuel subsidies, Mexico joined
Germany in a peer-review analysis of its efforts.
• Both reviews were completed in 2017 and valuable lessons were drawn from
the process, especially regarding the institutional setup for the phase-out and
current remaining challenges.
• Following on the paired effort of the US and China, and Mexico and Germany,
this year is the turn of Italy and Indonesia, supported by our analysis teams.
22. Subsidies to gasolines tend to be highly regressive,
even more so in countries like México
22
1.3% 1.6%
2.5%
3.7%
4.8%
6.4%
7.9%
12.5%
20.3%
39.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
I II III IV V VI VII VIII IX X
Expenditure in gasolines by income decile
23. Defining Economic inefficiency,
subsidies vs. tax expenditures
23
Three elements for the analysis:
• Inefficiency inducing subsidies refer to pricing below opportunity cost
(price-gap approach). The comparison would be with fuels’
international reference prices.
• Tax exemptions are not subsidies, in the economics sense. If they differ
from the Ramsey rule they might be sub-optimal taxes, but not
inefficiency-inducing subsidies. However they are still presented here
for comparison purposes
• We also look at tax provisions to producers of hydrocarbons, in
particular in light of the recent opening of the upstream sector in
Mexico. The competitive bidding process internalizes the revenue loss
effect.
25. Self-report and peer-review Conclusions
25
1. Through a prudent and gradual fiscal policy Mexico was able to completely
phase out general fossil fuel subsidies, fulfilling this G20 commitment.
2. The country gradually moved from an subsidy of 1.8% of GDP in 2008 to a
positive taxation amounting between 1.2% and 0.7% of its GDP.
3. Key in the success of this policy has been responsibly redistributing public
spending away from inefficient subsidies towards more productive and
socially progressive policies.
4. Mexico introduced resiliency into the general fossil fuel subsidies phase-out
through institutional changes part of its ambitious Energy Reform:
• reforming excise taxes,
• introducing a carbon tax,
• and redefining rules for its national petroleum company.
26. current challenges
26
• Tax accreditation remains an element to observe and analyse.
• Structural changes in Mexico reinforce the fossil fuel phase-out.
• From December 2017 onward, gasoline and diesel prices are now fully
determined by markets.
• LPG prices had the same liberalization in January 2017,
• the rest of fuels have had market prices for more than a decade.
• Price volatility is a challenge, especially in the transition to market prices.
• The response has been the implementation of an instrument of fiscal
smoothing through a transparent instrument of weekly stimulus given to
the Excise tax rate.
• Keeping net revenues within target, the instrument has been successful,
and supportive of the transition, for both new entrant firms and
consumers.
27. From subsidies to positive taxes,
but still below G20, OEXCD, Asia and Latin-America’s average
27* Source: Price, GlobalPetrolPrices.com (consulted 15/Jun/2018). Banxico, exchange rate: $20.72 per dollar
(consulted 15/Jun/2018).
$43.9
$42.1
$39.8
$39.6
$38.9
$38.7
$38.5
$37.3
$35.6
$35.4
$34.0
$33.4
$33.4
$31.9
$30.9
$30.2
$28.0
$27.6
$27.1
$26.7
$25.5
$25.5
$24.9
$24.4
$24.2
$24.0
$23.0
$23.0
$22.4
$22.2
$20.7
$20.5
$19.80
$18.09
$17.0
$15.93
$14.93
$14.9
$13.1
$11.2
$8.1
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
HongKong
Noruega
Italia
Grecia
Dinamarca
Israel
Portugal
Francia
ReinoUnido
Alemania
Suiza
N.Zelanda
Uruguay
España
Belice
CoreadelSur
Japón
Turquía
Chile
Rep.Dom.
Cuba
Brasil
CostaRica
China
India
Canadá
Honduras
Perú
Paraguay
Nicaragua
Guatemala
Argentina
California
México,jun-18
Colombia
EE.UU.
Texas
Rusia
Iraq
Bolivia
Ecuador
Price for Regular Gasoline (MX$/Litre)
Average:
$26.98
28. Most recent developments, and policies moving forward
28
Objective: Avoid volatility in fuel prices for final consumers
Effect on revenues
(US$ million dollars)
2013 2014 2015 2016
8,245 2,833 0 0
Legal basis
Ley de Hidrocarburos, Ley del Impuesto Especial a los Productos y
Servicios, Ley de Ingresos de la Federación para el Ejercicio 2017
Recent developments
The subsidy was eliminated starting in mid-2014, and 2015 was the
first complete year for which positive revenues were generated.
Outlook
Since 2016, the fuel tax is a quota per liter. Starting in 2017, prices
will be gradually allowed to be set by market conditions. All of these
provisions preclude observing subsidies in the future.
Table 1: Subsidies for Gasolines and Diesel
Source: Fiscal Expenditure Budget, SHCP. Figure for 2016 is an estimate
Objective Avoid volatility in LPG prices for consumers
Effect on revenues
(US$ million dollars)
2013 2014 2015 2016
373 493 0 0
Legal basis
Ley de Hidrocarburos, Ley de Ingresos de la Federación para el
Ejercicio 2017
Recent developments The subsidy was eliminated in 2015
Outlook
Consistent with was what established in the Energy Reform, prices
will be freely set by the market starting in 2017. There is no
possibility of incurring in subsidies in the future.
Table 2: Implicit Subsidies for LPG
Source: Fiscal Expenditure Budget, SHCP. Figure for 2016 is an estimate
29. Sectoral benefits: tax exemptions and accreditations
29
Objective: Reducing production costs for the primary sector
Effect on revenues
(million dollars)
2013 2014 2015 2016*
245 63 171 274
Legal basis Ley de Energía para el Campo
Type of subsidy Productivity/growth assistance
Recent developments
Switching from direct budgetary support towards limited exemption from excise taxes. The
benefit could at most eliminate the excise tax but the effective price would still reflect VAT
and other taxes, hence guaranteeing that the effective price is always above costs.
Outlook
The Rural Energy Law requirements are still in place and the benefit is not considered an
inefficient subsidy.
Table 3:
Fossil fuel subsidies and tax exemptions for prices for agriculture and fishing
Source: Ministry of Finance estimation with data from the National Fisheries Council and Ministry of Agriculture.
Data for 2013 includes budget-based subsidies. Data for 2016 is an estimate.
Objective Reducing production costs
Economic activity
Tax Accreditation (US$ million dollars)
2013 2014 2015 2016
Public transport 0 0 810 1,062
Industrial machinery, other than
transportation
0 0 376 493
Fisheries machinery, including vessels 0 0 65 85
Farming machinery 0 0 174 222
Legal basis Ley de Ingresos de la Federación
Recent developments No provision has been made for degression
Outlook No change in policy expected.
Table 4: Diesel excise tax accreditation,
specific economic activities
* Source: Fiscal Expenditure Budget, SHCP. Figure
30. México’s carbon tax (and its exemptions)
30
Objective:
Establish natural gas as carbon tax baseline, comply with
international aviation treaties and lighten impact on coal.
Effect on revenues
(million dollars)
2013 2014 2015 2016
N.A. 272.9 167.7 100.8
Legal basis
Ley del Impuesto Especial a la Producción y Servicios,
Presidential decree, January 2014
Recent developments None
Outlook
Reforms to ICAO Chicago Convention are required to
elimination the tax exemption for jet fuel.
Table 5: Carbon-tax exemptions and
reductions
* Source: Fiscal Expenditure Budget, SHCP. Figure for 2016
is estimated up to October only.
Fuel
CO2 excise tax
Cents per volume or weight unit Equivalent US$ per ton of CO2
Gasolines 10.4 /litre 10.8 por litro
Diesel 12.6 l/itre 13.1 por litro
Natural Gas 0.000 por m3 0.000 por m3
LPG
5.9 - 7.7
por litro
6.1 - 8.0
por litro
Turbosine 12.4 por litro 12.9 por litro
Fuel Oil 13.5 por litro 14.0 por litro
Coke 15.6 por Kg 16.2 por kg
Coal 23.9 por Kg 28.7 por kg
Average annual revenue
collected:
US$ 1.0 thousand
million
31. Regional tax benefits
31
Objective
Avoid economic arbitrage in gasoline consumption in the
Mexico-US border
Legal Basis Presidential decree published each year.
Effect on revenues
(million dollars)
2013 2014 2015 2016
81 289 705 512
Recent
developments
From 2016 onwards only the general excise tax can be reduced
to close the price gap across borders. VAT, carbon-tax and
other taxes must always be applied.
Outlook
There are no plans at present for fundamental changes to this
arrangement.
Table 6: Tax benefit for gasoline consumption in the northern border
* Source: Fiscal Expenditure Budget, SHCP. Figure for 2016 is an estimation given future reference prices at time of reporting.
The policy rationale is to reduce price difference gap (if any) with border cities, to
avoid arbitrage and any related economic disruption.
32. tax benefits for Upstream Fossil fuel industry
32
Objective: Foster investment in the Mexican E&P sector.
Legal Basis Ley de Ingresos sobre Hidrocarburos
Effect on revenues
(estimated, million dollars)
2013 2014 2015 2016
0 0 0 0
Recent developments
No provision has been made to eliminate the treatment, as any
benefit accrued to contractors would be reflected in the bids
offered in the licensing rounds and hence on the fiscal terms..
Outlook No change in policy expected.
Table 7: Specific provisions for hydrocarbons
producers
* Source: Fiscal Expenditure Budget, SHCP
Special tax treatment in the Hydrocarbons Revenue Law:
• An exploration and production company can consolidate results across different contracts for
corporate income tax (CIT) purposes.
• For CIT purposes, an accelerated depreciation is provided : 100% depreciation rate for exploration
investments and 25% for wells.
• For deep-water projects, contractors are allowed to carry forward losses for up to 15 years (the
general treatment is ten years).
34. LPG: Eliminating subsidies, only if targeted support
34
• In 2016 liberalizing LPG imports. Until 2015 Pemex was sole producer, importer.
• In 2017, liberalization of prices. Could be done beforehand in 2016, “conditional on
targeted support for consumers”.
2016 2017 20182015
Liberalize private
sector imports
Liberalize consumer
prices
Liberalize price to
consumers only if
targeted support is in
place
• At any point in time, federal government retains the right to establish maximum
prices if Federal Competition Commission detrmines that there is not enough
competition in the national or regional markets.
35. A decade of fossil fuel subsidies for LPG
35
• LPG consumers in Mexico had enjoyed significant subsidies for almost a decade.
PEMEX as sole producer and importer allowed total control over pricing policy.
Social relevance and high weight in consumer index, made stable prices a policy
priority, and choice, for 3 administrations.
• Small but steady price increases sought to close a growing gap. It only stopped
whenever intnt prices dropped. In this context Mexico’s Energy Reform proposed
liberalization, gradual liberalization.
6
8
10
12
14
16
18
an-05
ay-05
ep-05
an-06
ay-06
ep-06
an-07
ay-07
ep-07
an-08
ay-08
ep-08
an-09
ay-09
ep-09
an-10
ay-10
ep-10
an-11
ay-11
ep-11
an-12
ay-12
ep-12
an-13
ay-13
ep-13
an-14
ay-14
ep-14
an-15
ay-15
ep-15
an-16
ay-16
ep-16
MX$/liter
LPG, domestic price
Estimado
LPG Intnl price
Total Subsidy
2003 - 2014 =
US$ 9.1 billion
36. How to liberalize and protect poorer households?
36
• Keeping prices stable and below international prices transferred significant amount
of subsidies to all consumers. Liberalization of prices in 2017 would either
eliminate or require subsidies to be explicit.
• As in most cases in energy consumption, higher income households consume more
energy –directly and indirectly- so they receive the greatest transfers.
610 641 666 673 715 751 815 875
981
1,306
826
689 724 752 759 807 847 920 987
1,107
1,473
932
0
500
1000
1500
2000
I II III IV V VI VII VIII IX X Prom
($)pesosmexicanos
Decil
Gasto antes ($) Gasto después ($)
• Having small steady price increases were a politically acceptable way to
reduce the ammount of subsidies.
• Providing targetted subsidies to the lowest quintile of the population would
avoid a negative shock to those living in poverty, while allowing the new
market to operate with a stronger fiscal situation.
37. Falling international fossil fuel prices made it unnecesary
37
• Currently domestic price is 34% above international reference prices (PEMEX opportunity
costs). Moreover, Federal Revenue Law would allow a price increase of 3% in 2016. Given
LPG future prices this would mean a surplus of more than 1.6 billion dollars in 2016.
• Opening imports would allow the market to work pushing down prices to their efficiency
levels. Given the oligopolistic structure of LPG markets, competition policy must activel and
ready for intervention.
6
8
10
12
14
16
18
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
MX$/liter
LPG, domestic price
LPG Intnl price
38. Conclusion
38
• In México, both the Executive and Legislative actively proposed liberalization of LPG prices
but only conditional on having a targetted support system in place.
• The evolution of international markets made it unnecessary, but the mandate was in place if
needed. The potential scheme provided certainty in the transition, including focusing
subsidies on those that most needed.
• Lesson for other economies: politically feasible, best way to ensure action is taken. Fiscally
responsible.