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Taxing Fossil Fuels under Speculative Storage, Semih Tumen, Deren Unalmis, Ibrahim Unalmis, Filiz Unsal

This paper investigates the mechanisms through which environmental taxes on fossil fuel usage can affect the main macroeconomic variables in the short-run. We concentrate on a particular mechanism: speculative storage. The existence of forward-looking speculators in the model improves the effectiveness of tax policies in reducing fossil fuel usage. Improved policy effectiveness, however, is costly: it drives inflation and interest rates up, while impeding output. Based on this tradeoff, we seek an answer to the question how monetary policy should interact with environmental tax policies in our DSGE model of fossil fuel storage
Table Of Contents
Cover; Contents; 1. Introduction; 2. Model; 2.1 Households; 2.2 Firms Producing Core Goods; 2.3 Firms Producing Renewable Energy and Fossil Fuel; 2.4 Monetary Policy; 2.5 Fiscal Policy; 2.6 Goods Market Equilibrium; 2.7 Storage and Energy Market Equilibrium; 2.7.1 Fossil Fuel Storage; 2.7.2 Equilibrium in the Energy Market; 3 Results and Discussion; 3.1 Calibration; 3.2 Impulse Responses; 3.2.1 Impulse Responses with Subsidy Policy; 3.2.2 Policy Analysis; 4 Concluding Remarks; REFERENCES; FIGURES; 1. Impulse responses to tax shocks on consumption
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (37 p.)
Specific Material Designation
Form Of Item

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