Monthly Archives: March 2013

Odd-even license plate ban in Beijing

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In the following words, I briefly discuss the odd-even license plate ban policy in Beijing. Most of the reference I use are in the original language-Chinese, apologies if there are misunderstanding of the language.

Coverage of the policy:

Odd-even license plate rule, a traffic ban based on license plate number, requires that private owned vehicle with last digit number(1,3,5,7,9) on license plate odd can travel on public road only on odd days of each month( 1st,3rd,5th,7th,etc.),and vehicle with last digit on license plate(2,4,6,8,0)even can travel on public rad only on even days of each month( 2nd,4th,6th, 8th,etc.)Beijing Transport Administration Commission toke out this rule in Good Luck Beijing Pre-Olympic Games, aiming to reduce traffic congestion. At that time,  this rule applies on private vehicles, not on taxis, buses, or any public vehicles; until in October 2012,Beijing Transport Administration Commission decided to extended Odd-Even License Plate Rule to all motor-vehicles, excluding the following kinds :

1.post office vehicles,policy vehicles,ambulance,fire trucks,and engineering rescue vehicles;

2.buses, commercial shuttles, taxis, school buses, company commuter shuttles, and sightseeing buses;

3.Law enforcement and administrative vehicles with signs and are on duty;

4.Gardening and sanitation vehicles, road maintenance vehicles, and hearse

And all vehicles disobey this rule will be no longer able to get auto insurance in the following year as punishment.

Equality of the Policy:

Equality has always been the most heated discussed aspect of the Odd-Even License Plate Ban policy. The majority of Beijing residents consider this policy unequal due to the following views:

1. Rich and Poor: With the implementation of odd-even license plate ban policy, Beijing residents with private car find their going out less easier as a result for sure. And wealthier people intend to make their life easier by purchasing another car with an opposite parity in license plate. Some even sell their plate number for large amount of money, and quite a few affordable rich people will buy. While common people have to drive one and the other day, rich people manage to have access to private vehicles just by driving different vehicles one and other day.

2. Folks and Officers: There are some kinds of vehicle that don’t have to follow odd-even license plate ban, as discussed in the first part of this blog. Many residents in Beijing find the exemptions unequal. For instance, this policy rules out law enforcement and administrative vehicles, but actually it is hard to tell whether those car are really on duty or not. What if some officers just misuse of their authority, what can us common people do? In addition, the sign and sirens of emergency vehicles can be purchase in black market, it is not rare that private car decorate itself as an emergency car and just go out every day, ignoring the odd-even license plate ban.

Effectiveness:

There is one paper that has tremendous views online on the effectiveness of odd-even license plate number ban policy, in which indicate the policy has not quite reached the level of “effectiveness” in the following aspects:

1.Lack of Public Transit Priority: The author indicate that a successful reducing congestion policy would provide public transit with enough right of way. However, public transit in Beijing was not treated with priority but with equality with all other vehicles on road, which is not effective. Large numbers of private vehicles would use bus lane in rush hours, making public transit a mess, an effective policy in reducing traffic congestion would enforce the management of private vehicle misusing bus lanes and bus stops.

2. Improper design of road and lanes:

The paper also pulls out that the odd-even license plate ban policy just gave “temporary relief of the symptom”,and it “cures the symptoms,not the disease”. The paper indicate the main cause of the horrible traffic congestion is not too many vehicles on the road, but improperly designed road and traffic lane.

 

 

 

 

 

 

 

References:

1. BaiduPedia. <http://baike.baidu.com/view/2251702.htm>

2. The estimation and comparison on traffic policies in Beijing.<http://m.club.sohu.com/zz0580/thread/!137e6dedd24b7489>

 

 

 

Sulfur Tax in Denmark

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We have a guest lecturer, Joel Wood, who talked a lot about pollution this Tuesday. And in this lecture, I got to know many different kinds of pollution aside from carbon pollution(greenhouse gas emission) we’ve been so focus on so far this term. And by doing some research, I decided to dig into sulfur tax in Denmark.

BACKGROUND/HISTORY ON DANISH GREEN TAX REFORM

In the 1970s and 1980s increasing environmental awareness led to the introduction of the first real environmental taxes on waste, retail packaging, disposable tableware, pesticides and CFC’s. Also the first differentiations of the petrol tax according to the lead content were implemented. At the same time the energy crises led to the use of energy taxes as one of several ways reduce Danish dependence on imported fossil fuels. Taxes on electricity,mineral oils, gas and coal was introduced in the late 1970s and early 1980s.

In the 1990s, there were major changes in Danish tax policies and regime. In 1993 the Danish parliament adopted a green tax reform that should gradually shift taxation from labor to environment and energy during 1994-1998. The reform involved new green taxes on water, waste water and packaging as well as increased taxes on petrol, diesel, electricity, coal, waste and motor vehicles.

In total around 1% of GDP was shifted from labor taxes to green taxes with the majority of green taxes immediately burdening households. The aim was to increase the incentives to supply labor and at the same time reduce environmentally harmful behavior – that is a so-called double dividend.

In 1995 the Danish parliament adopted a major change and increase in the taxation of business CO2 emissions and energy consumption. The reform included a gradual increase in the CO2 tax (which was introduced in 1992) and energy taxation, the introduction of a new tax on sulphur emissions as well as the broadening of the base of the energy taxes.
DESIGN OF SULFUR TAX
Danish SO2 tax applies similarly to household and industry. These goals help to promote:
  1. The tax will incur on the price of energy where the production is based on the use of fuels that contain sulphur, and as a result, energy consumption would decline
  2. The tax will change the energy price structure, thereby providing and incentive to substitute high sulphur content fuels with fuels with a lower sulphur content, as they became relatively cheaper
  3. The tax will provide an economic incentive for the development of new low sulfur content fuels
  4. The tax will promote improvement of the existing end-of-pipe cleaning equipment

Currently the charge is based on electricity output, but plans in future to charge based on the sulphur inputs thus increasing the incentive of power plants to use low-sulphur fuels. Institutional Arrangements

TAXING WAYS AND TAX RATE

The tax can be levied in two different ways:

1. A product tax. This tax is levied on the sulphur content of the applied fuels; and

2. An emission tax. This is a tax that is charges according to the actual emissions of sulphur dioxide. The tax is not imposed on sulphur that is either cleaned, detained in the ash, or detained in other products.

Tax Rates:

The tax is a uniform rate of DKK 20 per kilo of SO2. The tax rate has gradually increased between 1996 and 1999, and was due to reach full effect in 2000 (DEPA 1999, pp95).

Product tax: DKK 20/kg sulphur

Emission tax: DKK 10/kg sulphur

Latest figures from Sterner (2003) note a tax of US$1,300 per ton of sulphur emissions.

 

USE OF SULFUR TAX REVENUE
The tax is recycled to industry until the year 2000. During that period, taxes are only imposed on sulphur contents above specific lower limit values. For very energy intensive coal-based enterprises, there is a scheme for further deductions in general terms. This implies that the enterprises are entitled to deductions for all sulphur contents below 0.2 (the 1996 limit value). Hence, these enterprises are liable to a tax which continues to apply for sulphur content above 0.2, whereas other enterprises are liable to taxes that apply to steadily lower sulphur content. Enterprises are only entitled to deductions providing they comply with certain conditions.

REVENUE-NEUTRAL OR NOT?PERSONAL OPINION

 
There is no references talking directly about Danish Sulphur Tax’s revenue-nuetralness. But I personally think Danish Sulphur tax can count as revenue-neutral because the revenue was cost neutral for the industrial sector as a whole, since the additional tax revenues were returned to the industry.
HOW IS DANISH SULPHUR TAX’S PERFORMANCE-CONCLUSION
It has been considered very successful in the both environmental and economic aspects:

  1.  Sulphur Content in Fuels. The sulphur content of both fuel gas oil and heavy fuel oil has fallen from 0.2% to 0.05%, and the sulphur content of coal has been reduced by a third
  2. Technology in Industry Plants. The tax has had a positive impact on the development of sulphur purification plants and technology,’There has been a 33% reduction of SO2 emissions in 1996 in the other “sectors” by a changeover to low sulphur content fuels reports a 76% reduction in sulphur emissions in Denmark between 1980 and 1997
  3. Economic View. Danish sulphur tax has an increasing revenue every year and the  tax revenues were returned to the industry as a whole.

 

 

References:
1. Greening the Danish Tax System. http://docufin.fgov.be/intersalgnl/thema/publicaties/documenta/2011/BdocB_2011_Q2e_Larsen.pdf

2.Economic Instruments – Charges and taxes. Sulpher Tax (Denmark)http://www.economicinstruments.com/index.php/air-quality/article/63-
3.Energy Efficiency Policies and Measures in Denmark. http://www.ens.dk/da-DK/Info/TalOgKort/Statistik_og_noegletal/Indikatorer_for_energieffektivitet/Documents/Structure%20National%20Report%20ODYSSEE%202012.pdf