Work Package 1: Foundations


In Work Package 1, the database for the models will be developed and information on the policy frameworks that are relevant for the simulations will be compiled.

Development / update of model database

For the combined model ADAGIO-DYNK used for the simulations of CO2 taxes and recycling mechanisms (see Work Package 3) a harmonised database will be developed in this task. The multiregional databases from the ADAGIO model (see Work Package 2) will be updated to 2014 with data from the WIOD-database (World Input-Output Database). Also, for the feature from the DYNK model (see Work Package 2) relevant data (income, consumption, emissions, energy ...) that are mainly taken from Eurostat will be updated to 2014.

Analysis of energy and carbon taxation in the EU Member States

In this task, a cross-country comparison of energy taxes will be performed. Energy tax rates by fuel and application area will reviewed based on the European Commission's taxation reports. In addition, for the countries that have introduced carbon taxes the carbon component of the taxes will be assessed, and implicit carbon tax rates will be calculated for all Member States. Thereby, the WIFO database on energy tax rates in the EU that is currently available for the years 1995 and 2000-2017 will be extended until the year 2021.

Analysis of the policy framework in the case study countries

In this task we will review and summarise climate policy and related policy areas (e.g. energy policy, transport policy) in the case study countries Austria and Poland. Another aspect to be included is the discussion of the social acceptability of carbon pricing in general and the specific findings regarding the public opinion on climate change and climate policy (e.g. from Eurobarometer surveys) in the two countries. Moreover, we will assess the existing tax systems, with a focus on the distribution between taxes on labour and the environment on the one hand and the financing of the social security system on the other. Finally, we will describe the status quo regarding the industry structures and distribution of employment as well as disaggregated greenhouse gas emissions. This will provide indications of the sectors that are emission intensive and/or labour intensive and are likely to gain or lose from the chosen revenue recycling mechanisms.

The findings from this task provide the background information for the interpretation of modelling results in Work Package 4.

Development of taxation and recycling scenarios

The policy scenarios to be simulated in WP3 will be specified in this task. Different options for the implementation of a CO2 tax will be discussed, e.g. the introduction of an EU-wide 'pure' carbon tax (abolishing other forms of energy taxation), the introduction of an EU-wide carbon tax in addition to national energy taxation or the introduction of a harmonised EU energy and CO2 taxation.

In addition, an extensive review of the theoretical and empirical literature on recycling options for energy and carbon taxes in the context of a socio-ecological tax reform will be conducted. These options will i.a. include the reduction of labour taxes, recycling to households via lump-sum payments ('carbon dividend') or recycling via a reduction of other taxes.

A workshop with researchers and stakeholders from policy, interest groups and NGOs will be organised to discuss the options and define the final set of policy scenarios that will be used for the model simulations in SoMBI.

Last update: November 2020

This research was funded by the Jubiläumsfonds of the Oesterreichische Nationalbank (OeNB).