The Effects of the Climate Change Levy and Climate Change Agreements on Businesses in the United Kingdom: Evidence from Microdata

Completed

Other Cross-Cutting Technologies or Research(Environmental, social and economic impacts)

Basic and strategic applied research

SOCIAL SCIENCES (Economics and Econometrics)

Sociological economical and environmental impact of energy (Environmental dimensions)
Sociological economical and environmental impact of energy (Other sociological economical and environmental impact of energy)

Dr R Martin
Centre for Economic Performance
London School of Economics and Political Science (LSE)

Standard

ESRC

17 December 2007

16 December 2008

12 months

£56,997

Manufacturing

London

Dr R Martin, Centre for Economic Performance, London School of Economics and Political Science (LSE)

Dr U Wagner, Psychology, Philipps University of Marburg, Germany

The project will provide the first quantitative assessment of the effects of the Climate Change Levy (CCL) and Climate Change Levy Agreements (CCA) at the level of the individual business enterprise. The objectives of this project are (i) to assess the effectiveness of these policies, with particular regard to the reduced rate granted to energy-intensive industries, and (ii) to estimate the economic and environmental cost associated with the implicit lower taxation of carbon-intensive fuels such as coal. The authors will match longitudinal data from the Annual Respondents Database and the Quarterly Fuels Inquiry to estimate the differential effect of the CCL and CCA on energy use, interfuel substitution, and on other economic outcomes. They will employ fixed-effects and instrumental variable techniques to control for selection of businesses into CCA. Furthermore, they will estimate a statistical model of fuel input choices at the plant level in order to simulate the effects of a counterfactual uniform carbon tax and to compute the efficiency cost of non-uniform carbon taxation under the CCL. This cost can be expressed both in terms of foregone carbon savings at given economic cost and in terms of excess cost for given carbon savings.

Abstract not supplied

23/07/12