국가전략정보포털

Title page

Contents

Foreword 6

Acknowledgements 8

Abbreviations 9

Executive Summary 10

Thematic Focus: Green Fiscal Reforms 16

Chapter 1. Context and Challenges 18

EU Context - 2050 target of Climate Neutrality 19

Challenges in becoming Climate Neutral 22

Chapter 2. Carbon Taxes: Lessons and Implications for the four countries in focus: Bulgaria, Croatia, Poland and Romania 26

Key lessons from experience with carbon taxes 27

Implications for countries of focus - Bulgaria, Croatia, Poland and Romania 32

Chapter 3. Impact assessment for carbon tax reforms in the four countries of focus - an illustrative example 36

Assumptions 38

Results 39

Chapter 4. Fossil Fuel Subsidies 51

Experience with the reduction of fossil fuel subsidies 52

Quantification of and options for the elimination of fossil fuel subsidies in the four EU countries in focus 53

Chapter 5. Green Public Investment 61

Importance of and trends in green public investment in the EU 62

Assessment of green public investment: illustration from Poland 64

Chapter 6. Conclusions 67

Annex 1. EU ETS 70

Annex 2. Effort Sharing Decision (ESD) 72

Annex 3. Illustrative carbon tax rates for non-ETS sectors 76

Annex 4. Carbon Pricing Assessment Tool 79

Annex 5. Methodological note on household impact of carbon taxes in Poland 81

References 83

Table 2.1. Illustrative carbon tax rates for non-ETS sectors for Romania 34

Table 4.1. Total government support to fossil fuels in Bulgaria 56

Table 4.2. Fiscal support to production and consumption of fossil fuels in Bulgaria 56

Table 4.3. Total government support to fossil fuels in Croatia 57

Table 4.4. Fiscal support to production and consumption of fossil fuels in Croatia 57

Table 4.5. Total government support to fossil fuels in Poland 58

Table 4.6. Fiscal support to production and consumption of fossil fuels in Poland 58

Table 4.7. Total government support to fossil fuels in Romania 59

Figure ES.1. Change in GDP due to revenue-neutral carbon tax compared to business-as-usual 11

Figure ES.2. France - Impact of carbon tax on emissions and jobs in the manufacturing sector 11

Figure ES.3. Emissions reductions induced by the carbon tax in the four countries 12

Figure ES.4. Emissions trajectory with and without carbon tax - example of Romania 12

Figure ES.5. Fossil fuel subsidies (stock) in EU27 by sector 14

Figure ES.6. New estimates of fossil fuel subsidies for selected EU countries 14

Figure 1.1. EU Climate Target Plan 2030 - key contributors and policy tools 19

Figure 1.2. Production vs consumption-based CO2 emissions 20

Figure 1.3. GHG emissions under ETS and under non-ETS sectors (ESD, Effort Sharing Decision), EU27, Bulgaria, Croatia, Poland and Romania 21

Figure 1.4. GHG emission reduction, actual (1990 - 2018) and required (until 2030 and 2050) to meet the European Green Deal commitments 21

Figure 1.5. Environmental tax revenues 22

Figure 1.6. Fossil fuel subsidies in four EU countries 22

Figure 1.7. Change in GHG emissions by source sector, 1990 - 2018 23

Figure 1.8. GHG emissions in transport (including international aviation), 1990 - 2018 24

Figure 1.9. Primary energy production, selected years, 1995 - 2019, based on tons of oil equivalent 24

Figure 2.1. Estimates of GDP impact in the US from a carbon tax (of $50/ton CO2 in 2020 increasing by 2%) with different recycling options 28

Figure 2.2. Estimated change in GDP due to revenue-neutral carbon tax compared to business-as-usual 28

Figure 2.3. France - Estimated impact of carbon tax on emissions and jobs in the manufacturing sector 29

Figure 3.1. Emissions reductions induced by the carbon tax in the four countries 39

Figure 3.2. Emissions trajectory with and without carbon tax - example of Romania 39

Figure 3.3. Tax revenues from the carbon tax in non-ETS sectors and subsidy phase-out 40

Figure 3.4. Time trajectory of the additional revenues - example of Bulgaria 40

Figure 3.5. GDP impact of carbon tax imposition and recycling of revenues to reduce PIT - Bulgaria 41

Figure 3.6. GDP impact of carbon tax imposition and recycling of revenues to reduce PIT - Croatia 41

Figure 3.7. Change in labor demand by economic sector (Paris-Aligned scenario, Croatia) 43

Figure 3.8. Change in labor demand by profession (Paris-Aligned scenario, Croatia) 44

Figure 3.9. Change in labor demand by wage group in the Low-Ambition scenario - examples of Bulgaria and Poland 44

Figure 3.10. Change in ambient air pollution - Poland 45

Figure 3.11. Raw-data relation between road fatalities and traffic congestion to motor fuel pricesacross space and time - example of EU27 in 2018... 46

Figure 3.12. Change in road fatalities and traffic congestion due to carbon taxes - Poland 46

Figure 3.13. Distribution of consumption incidence from taxing carbon in the Low-Ambitionand Paris-Aligned scenario and using revenues to... 47

Figure 4.1. Stages of support to fossil fuels 54

Figure 4.2. New estimates of fossil fuel subsidies for four EU countries 55

Figure 4.3. New estimates of fossil fuel subsidies for the four countries, structure of fiscal support to FFS 55

Figure 5.1. Government environmental protection expenditure 63

Boxes

Box 2.1. Carbon Border Adjustment Mechanism 30

Box 3.1. Estimation of output and employment multipliers for EU27 and a subset of 11 EU countries 41

Box 3.2. Impact of carbon taxes on Polish households 47

Box 4.1. Methodology for estimation of fossil fuel subsidies in the four countries in focus 54

Box 5.1. Green Financing 63

Box 5.2. Methodology to estimate green public investment in Poland 65

Box Tables

Table B3.2.1. Share of the Population At Risk of Poverty 49

Box Figures

Figure B3.1.1. Output effect from raising environmental and labor taxes by 1 percent of GDP in EU27 countries 42

Figure B3.1.2. Employment effect from raising environmental and labor taxes by 1 percent of GDP in a subset of 11 EU countries 42

Figure B3.2.1. Upper-case scenario 48

Annex Tables

Table A2.1. Structure of environmental tax revenues, percent of total, 2019 74

Annex Figures

Figure A1.1. Allowance prices in various ETSs 70

Figure A1.2. Annual average price 70

Figure A1.3. Revenues from the auctioning of emission allowances 2016 - 2018 71

Figure A2.1. GHG emissions in ESD sectors, 2010 - 2019, and 2030 projections 72

Figure A2.2. GHG emissions, 2011=100 72

Figure A2.3. Environmental tax revenues, 2019 73

Figure A2.4. Environmental tax revenues 73

Figure A2.5. Taxes on pollution and resources 73

Figure A4.1. CPAT model structure 80